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Data Monetisation

Data monetization is projected to experience significant growth in the coming years. By 2027, it is estimated that the market will reach a value of USD 2.9 billion, with a compound annual growth rate of 19.5%.

The digital transformation of the traditional customer journey has placed data monetisation at the forefront of this process, providing a plethora of opportunities for the industry. By leveraging both internal and external data, businesses can gain valuable insights to achieve strategic goals such as improved internal processes, enhanced risk management, targeted marketing campaigns, and the development of innovative products for specific customer segments.

Examples of data monetisation in practice include using alternative data to enhance internal claims analysis, segmenting customers based on their willingness to spend for pricing differentiation, and analysing trends in internal investment portfolios to identify cross-selling and up-selling opportunities.

Different jurisdictions have varying laws governing the financial services and insurance (BFSI) market. Successful examples of data monetisation in this industry include digital-only neo-banking products and services, regulation-driven distribution, cashless transaction wallets and payment banks, and the use of ISO 20022 standards for financial institutions to exchange electronic data. Additionally, consortium data sharing with regulatory authorities and key stakeholders, as well as aggregator platforms that produce substantial amounts of third-party data, have proven to be effective in the BFSI market.

Data monetization also forms the backbone of distinctive unserved lending programs, such as India's Prime Minister's Rozgar Yogna, which offers loans to women with disabilities and unemployed skilled adults between the ages of 18 and 35. Additionally, the partnership between NCBA Bank and Safaricom in East Africa has provided a novel solution in post-COVID socio-economic conditions, allowing the bank to gain access to customers' mobile spending and consumption patterns to facilitate lending.

Notable examples of financial market data providers that have generated massive amounts of data in a short period include London Stock Exchange's acquisition of Refinitive, Quandl's acquisition by NASDAQ, and Deutsche Borse Group's expansion of its portfolio to include Qontigo financial tech company. According to the Arab Federation, the impact of data monetization in trading platforms has led to the development of new products targeting younger customer segments, resulting in higher trading volume.

In addition to these industry-specific examples, data monetization is also used for customer-centric solutions such as customer segmentation to identify key performance indicators, predictive models for transactional data analysis, and scenario analysis with macro-economic indicators. Furthermore, data science research and development is used to identify anti-money laundering patterns and improve risk monitoring and governance. Overall, the data monetization market is expected to continue growing at a rate of 20% in the coming years, driven by the increasing adoption of these advanced techniques and services.

Co-Authored by Monali Rathod (left) & Shraddha Talekar (right)

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