Every day, data is generated from the millions of transactions that occur between businesses and consumers around the world. Using spending data analytics, investors and businesses can improve their investment and management decisions by extracting valuable data insights hidden within typically ambiguous company transaction data.
What Is Transactional Data?
If the information is so valuable to companies and investors, what is transaction data?
Transaction data is data on individual transactions including purchases, payments, hotel reservations, interest payments, and more. To protect consumer privacy, transaction data is de-identified and used by retailers, investors, and financial institutions to uncover patterns in consumer spending trends.
The patterns can help reveal market activity so organizations are better informed when considering expansions into new markets, investment opportunities, or other high level business decisions where understanding economic behaviors is vital.
Why Aggregated Transaction Data Is Key
Having access to aggregated transaction data is key to unlocking its full potential for investors, businesses, and financial institutions. With so much data generated so frequently, it would be impossible for individual organizations to gather and decipher data into one full picture by themselves. That’s where data analytics providers like Envestnet | Yodlee comes into play.
What Does It Mean When Data Is Aggregated?
Aggregated data is data gathered from multiple sources to provide a complete picture. When transaction data is generated, it is coming from multiple sources varying in formats and complexities that make it hard for humans to decipher. During Envestnet | Yodlee’s aggregation and enrichment process, data is pulled from over 17,000 global sources and covers 33 million+ de-identified individuals to provide comprehensive data for the most accurate insights.
Using AI and machine learning technologies, Envestnet | Yodlee ensures the consistent delivery of transaction data analytics so it’s normalized and standardized for humans to easily understand. Ambiguous transaction data riddled with random letters and numbers are made into actionable insights immediately.
With access to the most comprehensive data coverage in the industry that follows the most stringent of security guidelines to protect consumer privacy, businesses, investors, and financial institutions alike are enabled with the information they need to make better informed decisions.
Why Does Aggregated Data Provide Better Insights?
Aggregated data provides better insights because the more comprehensive data is, the more a complete picture a company or investor has on a particular market. Analytics and insights that are supported by aggregated data allows investors and corporations to identify business drivers, growth opportunities, and mitigate risk with full confidence the data they’re working with is timely, unique, and accurate.
Without aggregated data, investors and corporations are left to data sources like public company filings that are only filed quarterly or annually, and are far less detailed than the data sources aggregated by Envestnet | Yodlee. Instead of having to work with out-dated data and make assumptions while evaluating strategic decisions, those decisions can be backed by near real-time data for more accurate insights.
Using Company Transaction Data
Retailers and investors can use company transaction data for a variety of use cases.
Merchants and retailers can use aggregated transaction data to analyze competitor performance by looking at insights on customer loyalty and churn rates. Being able to measure brand affinity can give retailers a better idea of how to maintain or adjust their current strategies to remain or get ahead of the competition.
Transaction data can also help retailers better understand spending behaviors and trends so they can properly allocate seasonal staff, or help anticipate changes in their projection and forecasting models.
The timeliness of data is essential for investors to use it. Working with out of date and irrelevant information risks making ineffective decisions that can hurt investment firms or client portfolios. Envestnet | Yodlee’s data is delivered in near real-time, so when it is used by investors, they’re only working with the most up to date and accurate data for the best insights available.
The access to near real-time data also enables Envestnet | Yodlee’s data science team to provide a view of predictive revenue solutions for investors. Taking into account both current and historical company transaction data, machine learning algorithms can generate a predictive revenue model aiding investors in making portfolio allocation decisions to drive alpha or manage risk.