Phasing Out Third-Party Cookies in 2024

Cookies are a method of tracking user behavior online that have been used for decades for data analytics in banking. Websites often ask for permission to attach first-party cookies to your browser, which are used to monitor your activity and preferences on the site for future visits. Third-party cookies are those that are attached by websites other than the one a user is visiting, and they track browsing information and personal data for the purpose of delivering targeted ads. 

As concerns about digital privacy have grown in recent years, third-party cookies are now being phased out in favor of new, privacy-centric systems. Google has said it plans to phase out cookies for 100% of Chrome users by Q3 2024. This means financial institutions must act now to source first-party data.

Enhanced Personalization and Customer Experience

Armed with insights from first-party data, financial institutions can tailor their offerings to meet the unique needs of their account holders. Personalization, based on actual user behavior and preferences, leads to a more engaging experience. For instance, if the data shows a significant portion of your account holders frequently use mobile banking for certain transactions, you could enhance these features or provide targeted advice on making the most of your mobile app. This not only improves satisfaction but also fosters loyalty and trust.

Strategic Decision Making and Innovation

First-party data is a treasure trove for strategic decision-making. It allows financial institutions to use data analytics in banking to identify trends, preferences, and pain points in their account holder base. This insight is crucial for innovation, as it helps banks and credit unions develop new products, services, or features that directly respond to their account holders’ needs. Whether it’s introducing a new savings tool or refining payment options, decisions backed by first-party data are more likely to succeed and resonate with your account holders.

Ideas to Drive Revenue with Transaction Data

First-party data is gathered directly from your account holders, such as information from digital account opening, app interactions, website visits, and transaction history. You can really get to know your account holders through their transaction data.

Overall spend and patterns. Is there a consistent pattern to your account holders’ purchases? If transaction data shows account holders spend more on home improvement and furniture purchases in the spring, consider a targeted marketing campaign to these account holders for home loan products.

Merchant preference. Which merchants do your account holders choose to transact with? It’s likely most of your account holders prefer a specific coffee shop chain. Recognizing this trend, you could collaborate with the coffee shop chain to offer cashback rewards on purchases, encouraging continued use of your institution’s cards for transactions.

Life stage insights. How do you know the life stage of your account holders? For example, an uptick in purchases for baby products and pediatric services, with other indicators such as frequency and recency, could indicate the transition to parenthood. Make sure these account holders know about your college savings plans.

Product utilization. Are account holders adopting your products and services? By understanding which products account holders have, then you know which products to offer them to grow their relationship with your institution. Does an account holder only have a checking account with you? Consider promoting your best certificate of deposit rate to them to capture more deposits.

Held-away accounts. Who are your true competitors? With transaction data, you can know where your account holders have funds elsewhere. Then you can offer your best rates and fees to these account holders to bring those dollars back to your institution.

The Critical Role of Transaction Data Cleansing

Within the realm of first-party data, transaction data holds a place of particular importance. This data provides a detailed record of how account holders interact with their finances on a day-to-day basis. It offers a clear picture of spending habits, saving patterns, and financial priorities. This level of insight is invaluable for creating a banking experience that feels both personalized and secure.

But transactions are often cryptic and difficult to understand. To gain insights from transactions, you need to analyze every raw transaction and assign data tags. This can be a very manual, time-consuming task. Transaction data cleansing offers an easy way to derive insights from the transactions your account holders make every day.

Navigating Privacy and Trust

While first-party data offers numerous advantages, it also comes with the responsibility of managing privacy and trust. Account holders are increasingly aware of their data’s value and are concerned about how it’s used. Transparent communication about data collection practices and the benefits customers can derive from sharing their data can help mitigate these concerns. Ensuring data security measures are in place is also crucial for maintaining account holder trust.

Closing

First-party data will continue to be the best source for data analytics in banking. Make sure your institution is ready for the phase-out of third-party data with a comprehensive first-party data strategy.

Learn more about data analytics in banking.