Guest Post | Nov 24, 2022

Image: Unsplash/NASA

In the world of finance and technology or fintech, innovation can be a powerful tool in improving customer experience and driving business growth. One aspect of this innovation is the use of location-based data to maximize financial performance.

This data can be used in various ways to track competitors, optimize logistics and improve customer relationships, among other things. Let’s dive into how location-based data can help you get ahead in the ever-evolving fintech world.

Location Data 101: Definition Benefits

Location data is information derived from a device or system, for example, a smartphone, GPS tracker, Phone Number Location Tracker, or other interconnected gadgets.

This data can furnish profoundly precise details about an individual’s movement and the time they were in any given area.

Fintechs utilize this agglomerated location data drawn from several sources and then synthesized into one single platform to make smarter and more informed decisions.

Location data can enable fintech companies to:

• Identify new customers and build a better understanding of their behavior
• Monitor competitors’ activities, customer visits, marketing campaigns, and more
• Make strategic decisions about pricing, product offerings, and promotions
• Foster loyalty and drive repeat purchases
• Improve customer experience by delivering personalized messages and targeted offers

As such, location data can be a powerful tool for fintech companies. By leveraging this intelligence, the financial industry has been able to advance in previously unimaginable ways.

However, using location data also entails risks – from a privacy standpoint and a regulatory point of view. Financial institutions must comply with all applicable laws and regulations when collecting and using customer location data.

Applications of Location Data in FinTech

Location data can refine the consumer experience, augment promotional campaigns and offer better services. Here are some of the key ways fintech companies use location data.

Risk Management

When it comes to financial security, location data can provide crucial information for institutions looking to protect their customers from potential fraud.

To begin with, looking at the physical whereabouts of bank account or credit card holders is a powerful tool for identifying unauthorized transactions.

For example, if a customer’s account is suddenly accessed from two distinctly different geographical locations in a short amount of time, this could be a red flag that credit card fraud might be taking place.

In such cases, banks and related institutions can take steps to investigate and block fraudulent activity based on these data points.

Location data can also benefit more innocuous situations, such as when customers travel or relocate to new areas.

By tracking an individual’s current and past locations through geolocation technology, businesses can ensure that their customers have access to the correct accounts and services without risking lapses in security.

This makes location data an essential ally for financial institutions committed to providing excellent customer service while maintaining strict anti-fraud procedures. 

Personalized Services

Financial institutions have long recognized the importance of providing personalized customer service. As technology such as location data becomes available, they are gaining new ways to tailor their offerings to customers’ particular needs and preferences.

With location-based services, banks and other financial institutions can now offer customers timely information on currency exchange rates when traveling abroad or inform them about relevant promotions based on their current whereabouts. The given strategy allows for a more convenient and efficient experience when customers take advantage of financial services.

Furthermore, access to location data helps financial institutions better understand consumer behaviors and trends so that they can adjust their services accordingly.

Competitive Analysis

Understanding the competition is essential for banks and other financial institutions to serve their clients better. By leveraging location data, banks can identify and analyze competing institutions in a market and make informed decisions about how to best compete in that space.

Location-based data gives banks insight into the services their competitors offer, their geographical footprint, or even what prices they charge for certain products or services. This level of understanding allows them to fine-tune their strategies, services, and offerings.

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Furthermore, location data lets them measure customer engagement across geographic regions and better understand loyalty patterns to ensure they provide an optimal experience.

With these insights in hand, financial institutions can strategize more effectively to outpace their competitors while continuing to provide superior service to customers.

Conclusion

Data analytics is a powerful tool in the financial sector. It can give banks, credit unions, and other institutions invaluable insight into their customers, operations, competitors, and growth opportunities.

By leveraging data points such as customer profiles, location data, and competitor activities, financial institutions can gain an advantage over the competition while providing superior service to customers.

Ultimately, data analytics helps financial institutions to make informed, data-driven decisions that can lead to higher profits and more satisfied customers.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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• Source: https://ncfacanada.org/how-location-based-data-can-benefit-fintech/