What does the future of data tracking look like for fintechs?

Tracking, measuring, and reporting on digital data is in transition and it’s critical for fintechs to be prepared for the changes afoot.

You only need look at the public battle around privacy between Facebook and Apple to see the impact on how businesses track users across their apps and websites, as consumers and regulators become more conscious of how their personal data is used.

Knowing their data is protected is a key factor for customers in building trust in the fintech product they’re using. So, what do fintechs need to do to prepare for the future of data tracking?

Why is data tracking changing?

It was Apple’s first web privacy changes five years ago which made users begin to question how their data was being used. In 2017, Apple launched Intelligent Tracking Prevention, or ITP, which limited third party cookies in the mobile and Mac Safari browsers.

When Apple does something, the world takes note

But it was their more recent updates in iOS 14.5 when the world (and primarily Facebook) really started taking notice. The update allowed users to simply opt out of cross app tracking which kickstarted the industry changes we’re now seeing.

According to Flurry research, around 96% of iPhone users have opted out of cross app tracking since iOS14.5 launched in 2020, marking a clear change in consumer mindset.

Apple holds c51.62% of smartphone market share in the UK and, with most customers using a smartphone to access fintech products and platforms, it’s a seismic change for the sector.

And don’t forget Google

Not to be left behind, Google originally forecasted the phasing out of third party cookies in its Chrome browser in 2022, whilst at the same time investigating its own anti-tracking features on its Android platform.

As we near the end of 2022, Google has since delayed the phase-out till 2024, citing the reason that it’ll give marketers more time to adjust their advertising approach. And test out new, ‘less intrusive’ targeted advertising technologies.

And of course, there’s the new and improved Google Analytics – GA4 – due to land in July 2023. I’ll get to that a little later…

Fintech data usage in focus: Monzo

Successful fintechs know that optimising data is key to efficiency and efficacy. In three years, the data team at Monzo grew from just one person to a total of 30. It’s clear how data-evidenced business decisions enabled Monzo to grow from £100million to a company valued at £2billion in just four years.

Whilst the need for rapid growth was a key motivator for challenger banks like Monzo, its data approach was reliant on having the expertise to adapt and succeed with it.

Currently, Monzo makes most of its revenue from interfacing, in which it takes 0.2% for every debit card transaction. Despite recent valuations estimating the company to be worth £3.7billion, driving more revenue is vital to the long-term success of the business.

So, data will continue to play a key part in Monzo being able to monetise their growth in the future.

Predictive analytics: the insurance sector

PWC describes data as “the lifeblood of the insurance industry” with data and predictive analytics making many elements of the sector simpler and more cost-effective, like:

• pricing products
• detecting fraud
• gaining customer insight
• improving risk assessment and underwriting efficiency

Willis Towers Watson found that over two-thirds of companies reported that predictive analytics have helped increase sales and profitability.

Implementing predictive analytics is not a straightforward process. Here are key things to consider for an effective implementation:

• clearly define your data goals
• build the infrastructure – the more information you can integrate the better
• launch early predictions – predictive analytics gets more accurate over time – making predictions based on past data will help ensure you’re on the right path
• constantly and consistently maintain and update your data

How fintechs can prepare for the future of data tracking

Having shown how fintechs can exploit data to drive incredible business growth by understanding customers and their behaviours, where do they go from here?

Start by undertaking a data audit to assess your business is using data effectively by following this checklist as a guide:

• understand as a collective what the company privacy measures are and how they are implemented
• ensure industry/regulatory guidelines are adhered to and compliance processes followed
• agree on and communicate the business KPIs
• set up a system for data decision-making
• define which data teams need access to make those decisions
• create your predictive data models

It sounds like a lot of work, and it can be, depending on the complexity of the business goals, product, and user journeys. But I can’t stress enough how it’s time well spent. Any predictive model needs the right data to be effective, so to make sure accurate predictions are made, relevant and exact data must be collected.

I’d advise a dedicated internal team (including key decision makers) is set up to manage this and investment is ringfenced in your budget for any additional internal resource you need to bring on board or external specialist partner engagement.

Reassessing how your business uses data can bring about changes to other processes but with change comes opportunity to disrupt the market which fintechs thrive on!

Four things fintechs can do in the immediate term

Whilst the above is key to formulating your long term first-party data strategy, there are four changes you can implement straight away to get your heading in the right direction today.

1/ Cookie and data privacy policies

Check your existing cookie and privacy policies – are they accurate and transparent?

The use of first-party customer data will be a key component in digital campaigns that can no longer rely on cookies to operate. Is your organisation being clear to users about how their data may be used?

You can test whether your website is GDPR compliant by using Cookiebot’s free compliance checker.

2/ Set up Google Analytics 4

As I mentioned earlier, Google is developing its cookieless tracking approach by the sunsetting Universal Analytics in July 2023 when GA4 takes over.

Unlike UA, GA4 is designed to work without cookies as it relies on Google’s machine learning algorithm which can fill data holes that may be missed due to a lack of cookie data.

GA4 also has the added built-in benefit of being able to link to BigQuery. This means you can access the raw GA4 data and run SQL queries on it to help provide deeper analysis. This was a paid for feature exclusive to Analytics 360 but is now available to all users at no additional cost.

It’s so important to set up a GA4 account as soon as possible. Being able to compare data between UA and GA4 will ensure your data tracking is not interrupted in July 2023 and that you have no gaps in reporting data.

3/ Set up Facebook’s conversion API

Facebook has made its own changes too, including verifying your domain and updating pixel events with priority events, so campaigns can better optimise and measure conversions.

If you use Facebook ads, you’ll have seen these recommendations heavily prompted in your ad account since the iOS14 changes were announced.

Another change that can help future proof your ad accounts is the installation of the Facebook Conversions API. This can link your Facebook ad accounts to your server, web platform, or CRM for more accurate measurement in the absence of cookies.

4/ Optimise Google Ads

Properly implementing your global site tag (gTag.js) and/or your Google Tag Manager on your site will ensure your campaigns are fully optimised and measured.

You can also improve ad reporting and optimisation by setting up Google’s enhanced conversion. This works by sending hashed user data to Google when a lead is generated, allowing more accurate optimisation for those who’ve opted out of cooking tracking.

Whilst you’re making changes to your Google ad tracking, make sure your privacy policy is updated at the same time, so your website visitors know how their data is being used.

A rare opportunity to rethink your data approach and stay ahead of the competition

Whilst many of the changes in data tracking outlined here are compulsory, they present a rare opportunity to rethink and future-proof your organisation’s strategy.

Following the steps above now means you have a unique change to review how your business is approaching and using data – and identify ways it can be improved for the better.

Fintechs that are swiftest in acting on the changes will be the ones delivering standout customer experiences and staying ahead of the competition.