Swipe your card, scan a QR code, or make an instant EFT, and you’ve done more than complete a transaction – you’ve created a digital footprint that reveals your financial habits, preferences, and lifestyle. In South Africa, where limited consumer data or poor credit records have historically restricted access to credit, transactional data has been a game-changer.
With 28.1% of South Africans holding a credit card and having 18.5 million credit active consumers, and steady growth predicted for 2025, this data opens new opportunities for financial inclusion. Whether unlocking access for first-time borrowers or optimising business offerings, banking data provides valuable insights into consumer behaviour. Let’s dive into how transactional data shapes decisions, drives business intelligence, and predicts future consumer actions.
What You Earn and Your Disposable Income
Banks, lenders, and retailers all seek to understand one thing – your financial reality: What do you earn? How do you earn it? And what’s left after expenses and debt? Transactional data offers a real-time, detailed view of income, spending, and debt, far beyond a pay slip or credit report.
In South Africa, where households spend more than 80% of their income on essentials, and the debt-to-income ratio reached 67.4% in 2023, understanding disposable income is crucial. As Kirsten Hancock, Head of Operations at Finch Technologies, puts it, “Analysing transactional data helps financial institutions make informed lending decisions, while businesses can tailor offerings to meet consumers’ specific needs.”
A Deeper Dive into Transactional Data
Platforms like Gathr enhance transactional analysis by analysing data into meaningful categories. For example, are you spending more on entertainment and gambling, or focusing on saving and investing? Beyond categorisation, transactional data tracks behaviours like payday cycles and spending frequency. In 2023, gambling accounted for 8% of discretionary spending among lower-income households, and when combined with timing, amounts, and frequency, this data offers a deeper understanding of consumer habits.
Telco spending analysis reveals the dominant mobile networks and how often consumers top up airtime or data. Similarly, education-related payments can indicate investment in personal growth and preferred institutions, our Gathr platform recently processed 1.4 million transactions for a large retailer, and found that 4% of transactions were geared towards education spend. Cash movement patterns, such as monthly ATM withdrawals and deposits, offer valuable insights for lenders, telecom companies, and retailers into the flow of money into and out of a consumer’s account. For retailers, understanding where consumers frequently buy groceries can help optimise inventory and promotional strategies.
Why Is This Data Important?
- Lending decisions
For credit providers, transactional data is a game-changer. Unlike traditional credit scoring, which may penalise those with no borrowing history, this holistic view provides a nuanced understanding of financial behaviour. A potential borrower spending wisely and saving consistently, despite lacking a formal credit history, now has better chances of accessing finance. - Identifying market gaps
For companies outside finance, transactional insights unveil market opportunities. If data shows that a significant percentage of customers already invest in funeral insurance, a retailer could expand into offering related services. Similarly, understanding peak transaction times at stores can optimise staffing levels, improving customer experience. - Evolving customer segments
In South Africa, the rise of prepaid over contract telco customers is a notable trend. Companies armed with this knowledge can allocate resources to innovate products for prepaid users. This approach doesn’t just serve the customer better- it secures market relevance in a competitive landscape.
How Is This Data Extracted?
Gathr enables companies to extract essential customer data directly from bank statements. Whether through emailed statements, USSD, online logins, or manual uploads, these APIs process large amounts of data and allow the company to convert the responses into a format for their staff to use.
For example, a lender can instantly access categorised spending patterns or payment timelines, enabling staff to make informed decisions quickly. This technology transforms raw data into actionable insights, enhancing both agility and precision in decision-making.
What Does the Future of Customer Banking Data Look Like?
The future of banking data lies in real-time feeds, replacing outdated reported data that often lags by weeks or months. Leveraging this real-time data will allow for faster and more accurate predictions. Technological advancements are propelling algorithms that can forecast behaviour, with widespread adoption expected in the next year. Imagine a retailer knowing when a customer will run out of essentials, offering timely discounts, or a lender proactively addressing over-indebtedness. These insights shift businesses from reactive to proactive strategies, redefining customer experiences. Transactional data’s integration with datasets like geolocation or social media will create richer consumer profiles.
In a world where every swipe reveals consumer habits, the question isn’t just what banking data says about you – it’s how businesses will use this knowledge to create more value for you.
By Ashleigh Cole, Product Marketing Manager at Finch Technologies
