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PSD2 aggregation & behavioral CDP, the needed synergy.

From knowing the "what" to understanding the "why", predicting the "when" and improving the customer engagement.

December 10th, 2020

PSD2 is changing the financial services and creating the open banking revolution. The account aggregation previous to the PSD2 regulation was based on web scrapping with limited use of banking credential of a bank customer in other banks serving him/her. In Spain Bankinter was the pioneer launching the service in 2001 and jointly with CajaMadrid (now Bankia) launched in 2003 the first aggregation company Eurobits (recently acquired by Tink).

At that time how to standardize the data aggregation (less controversial and less costly that web-scrapping) and pursuing the creation a legal framework where the initial focus, API from tech side and PSD2 from legal side were the solutions we have today. A myriad of vendors (Unnax, Tink, Afterbanks, Truelayer, etc.) are providing this service providing fintechs and banks the service account aggregation “as a Service”. In the early 2000s the big data was starting, costly database licenses and expensive hardware, the cloud were just an idea then, make difficult to squeeze the most of value of the data. Before AI/ML and advanced analytics were familiar technologies the promising trend was “data mining”.

2021 is coming. Most of banks and fintechs are investing in both sides: investing in PSD2 information of its customers from AISP (account information) vendors and investing in the technology to make available the information of own customers to AISP vendors to become compliant with PSD2 framework.

The initial use cases developed with account aggregation data in the past years were:

  ● Providing customer a nice “account aggregation” app or website to make the bank offering it       the “preferred or main one” of each customer.

   ● Using the information in a very “hand-made” and professional services intensive to provide             competitive business intelligence.

With this to cases both, customer and banks are having a better view of the “what”, what the customers have and do with their money: the wealth position, distribution and flows).

In the other hand, CDPs (customer data platforms) are becoming a new piece in the core IT architecture of many B2C verticals with different goals/missions of CRM and Data Lakes. The ability to automatize the cross-analytics of customer interactions in digital channels, customer events known (payments, investments, divestments, money flows/transfers) will help to predict “when” the flows or wealth distribution changes between the different accounts of a given customer could occur (or customer segment trend) and “how” it occurs, the mechanisms to operate between accounts. Predicting when the customers could decrease its position in your bank to increase in others is a first step, understand how is the normal procedure as pattern is another step...but there is something missing yet.

PSD2 + CDP = Customer Understanding

The difference between the Analytical CDP and the Behavioral Analytics CDP as Whenwhyhow proposes is the extension from only customer-data platform to a tentative external contexts time series modeling to identify potential relationships between customer actions and “things that happen out there”, stock markets boosts or soars, own promotion or campaigns, competitor advertising campaigns or new product launches, general economy trends, changes in the UX of digital channels or the competitors ones. Trying to identify potential relationship of what customer does and what happens out there may help to understand the customer mindset, understanding his “whys”, and understanding better the customer mindset is the key step to build better and empathetic personalization. Better and more personalized digital service is a key ingredient to build long-term trust, loyalty and engagement. 

In the case of banking, understanding the customer mindset identifying with contexts our there are relevant for each one, and adapting not only the offering but the communication was the key of the client-facing staff success building long-term relationships. With the current trend of more almost-digital customers and native only-digital customers the digital transformation is not yet complete until the human ability to understand the clients and serve them empathetically and really context aware will be digitalized.

Being able to put together in a CDP what the customer has/does in a given bank, with the information about what has/does in other entities with PSD2, modeled external contexts potentially relevant to trigger customer actions will make the difference. 

With a good GDPR compliance model, this task could be not only done by the own bank or fintech using the PSD2 data but also provided "as a Service" from AISP vendors upselling "extra mile" value added service on top of aggregated data.

The digital understanding of the customer and the digital tailored “human-alike touch” personalization & empathy will be key to compete in the very competitive and easy to churn in each more post-pandemic digital world. PSD2 & CDP hand on hand might have a very key role.
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