Data has always been one of the most important tools in a marketing team’s arsenal. It helps us make predictions, and allows us to look more clearly at the results of our efforts. However, not all data is created equal. The source of data, and especially the methods used to obtain it, can drastically change its value and its use cases.
Data is defined by its point of origin in one of three categories: third party, first party, and zero party. We thought it would be interesting to take a look at the uses and potential downsides of each type, from the perspective of marketers and financial institutions.
This is information that the user intentionally shares about themselves. Commonly gained through interactions like surveys and questionnaires, zero-party data is extremely valuable for a couple of key reasons:
1. You Know it’s Reliable
If a user is making a conscious choice to share this information with you, it is actionable and accurate.
2. No Invasion of Privacy
This type of data collection isn’t affected by changes in privacy laws, and doesn’t necessitate the tracking of internet data or cookies.
Financial institutions can leverage zero-party data to create more accurate profiles of their members, learn about their needs, and proactively guide them towards the correct solutions. These are incredibly important points for modern FIs, many of whom are looking for ways to address their members’ needs before they arise. For example, a user who submits information about their desire to purchase a home in the near future could easily be retargeted with content regarding home loans over the coming months or year.
The process of zero-party data collection can also be made to mimic conversational patterns, making members feel more secure with sharing their information. If an FI is taking the time to ask about your personal financial goals, your retirement plan, or other big decisions, members will feel more comfortable while still providing important data.
One of zero-party data’s few limitations is that the audience must be prompted to provide it. Generally, users will not tell you what you do not ask for, so marketing teams must get creative when gathering their information.
This is the data gleaned from user action within a company’s own ecosystem. This includes purchase history, clicking on specific links, or any other point of interaction between a brand and its audience. You can bring these small interactions together to form a composite image of the user and create more effective marketing campaigns.
First-party data’s main strength is its ability to compile disparate sources of information. Many financial institutions are becoming increasingly reliant on their digital and mobile banking platforms to support their members. Capturing the data from these touchpoints, as well as interaction through channels like email, empowers FIs to create more comprehensive member profiles.
This can then be leveraged to map out a typical member’s “journey” and enhance marketing teams’ understanding of how to allocate their resources. The data may show a pattern of members interacting with key financial products in a particular sequence, or traveling through channels in a specific order. This allows FIs to preemptively market the correct products through the correct channels and meet members where they need them most.
This data comes from other sources, including other businesses or public information. Its primary benefit is its scale, as it tends to encompass larger audiences than a particular business could reach on its own.
However, the use of third-party data has several drawbacks which may disincentivize FIs from using it.
1. Privacy Issues
Third-party data can be bought and sold. With online privacy becoming a major concern, and with the sensitive nature of financial information, FIs may want to think carefully about how their members view these issues.
2. Lack of Accuracy
Third-party data only represents the actions taken outside your organization. While this may be useful for tracking macro trends, data that reflects member activity within your ecosystem can give you a clearer picture of your members’ specific needs.
Third-party data must be acquired, often at a cost. You must also keep in mind that if you can get it, then your competition can as well. FIs who want to distinguish themselves from their competitors may be better served by acting on their own data.
It’s a Data-Driven World
Whatever your institution’s goals are, you’ll need the right data and the right partner to achieve them. Prisma specializes in helping financial institutions create marketing campaigns with integrated data sources, customized models, and smart automation. If you want to see your data work harder for you, schedule a demo with us to see how Prisma’s technology can make a difference.
Image credit: Adobe Stock