Data experts from UK fintechs Receipt Bank and GoCardless discuss their approaches to managing the vast amounts of information flowing into their businesses, touching on the opportunities and challenges it presents
Fintech is causing major disruption in financial services
Data is an increasingly precious commodity for fintech businesses, with the vast and increasing amounts of information collected from daily customer interactions and internal processes able to generate valuable insights if used correctly.
As new technologies emerge to help collect, manage and analyse this information, the role of data teams within these fintechs is quickly evolving as they search for innovative ways to create benefits for both customer and company.
But the task of efficiently managing vast and complex information stockpiles is not without its challenges, with companies needing to ensure security, value creation, and the wider understanding of data across the whole business.
Steve Lucas, head of customer experience at London fintech Receipt Bank, says: “To have this honeypot of information you really want to be demonstrating – especially from the perspective of GDPR governance – the value of why you are collecting it, and what you are transforming it into.
“The challenge is how to make time to do this to the scale that data is being collected, and finding what’s most powerful in this information for the user.”
Data helps fintechs like Receipt Bank improve customer experience
Receipt Bank has developed an automated bookkeeping platform that captures the day-to-day expense information from documents associated with running a small company, and processes it digitally to give accountants and business owners a real-time view of the state of a firm’s finances.
Mr Lucas’ job is to harness the data collected by Receipt Bank to measure customer experience, something he concedes is “such an intangible thing”.
This involves delving into the pools of information gathered daily by the platform to assess whether clients’ needs are being satisfied – no mean feat, considering Receipt Bank is currently partnered with 200,000 businesses and 35,000 accountants worldwide, and processes five million documents each month.
“Are we creating new value for customers or destroying it when we release new product functionality, or enter new markets? That is the eternal question we face,” he explains.
In an effort to tackle this question, Receipt Bank has teamed up with data management firm Looker, implementing its technology to speed up and streamline the process of organising and interrogating the business information it collects.
“Being able to monitor usage of new functionality among our clients is something we could only dream of a couple of years ago, but is now very much a day-to-day occurrence.”
GoCardless is looking to create an ‘enterprise grade’ data ecosystem
Another UK fintech attempting to maximise the potential of the data it collects is GoCardless, a B2B direct debit specialist looking to tap into the growing trend of recurring payments.
Through its digital payments platform, GoCardless helps more than 40,000 global merchants manage recurring invoices, processing $10bn (£7.7bn) in transactions annually.
It has grown quickly in recent years – with the number of merchants using its platform increasing 100% year-on-year – but with this rapid expansion comes the challenge of efficiently managing the increased amounts of data streaming into the business.
Tasked with meeting this challenge is the GoCardless business intelligence team, whose job it is to improve the way the company handles data as it looks to scale up and grow internationally.
Jon Palmer, head of business intelligence at GoCardless, explains: “It’s the job of people like me to build our data ecosystem and our data habits to be enterprise grade, and take the business out of that start-up mentality and into one of scale up and enterprise.
“It’s one thing to say the company is data-driven, but it is also data hungry. By using tools like Looker, we are able to build a self-serve data culture.
“Before I joined, an awful lot of our work was based on email requests – ‘please send me data about X and Y’ – and that’s incredibly hard to do at scale.
“In fact, I’d say there’s no good reason to do it at scale.”
Working with data poses challenges
While making good use of data management can help businesses like Receipt Bank and GoCardless improve both their internal processes and customer experiences – and develop a “competitive differentiation through data” – the task is not without challenges.
For Mr Palmer, one of the key hurdles to overcome in an expanding, data-driven business involves changing attitudes towards data engagement across the whole company.
“The biggest blocker for any company going through this kind of change is the extent to which it is paying for the sins of the past – the data quality has to be there, and that’s not necessarily the focus of a business in the start-up phase,” he says.
“When the question is ‘is this a viable business in the long-term?’ you don’t focus on data governance.
“But now that we’re moving into a more enterprise grade mindset, you still have to be able to tell the stories relative to the data of the past – and if it’s not of sufficient quality, it’s very hard to turn that into something meaningful.
“That’s partly about changing the habits of people who are used to doing things in a way that generates that kind of data.
“But also one of the reasons you invest in data teams is so you can measure how bad a problem is – and it’s a valuable thing to be able to articulate and measure how much of an impediment it is, as opposed to saying ‘It feels bad’.”
The conflict between innovation and data security
For Mr Lucas at Receipt Bank, one of the most significant challenges lies in being responsible for large amounts of customer information, and wanting to demonstrate that it is being used positively.
He adds: “Every day in the news you hear about data breaches and data security, and there’s always a balance of trying to use this information in a way to create powerful insights, but also doing everything possible not to be the next headline.
“It’s like two forces working between trying to be innovative and get access to information and being prudent about how fast you should really be going – especially with Receipt Bank holding sensitive business information, we take that very seriously.
“But at the same time we know there’s so much scope for innovation in that space, because small businesses and accountants have not typically had a champion building these tools in the same way upmarket enterprises or consumers have had.”