How Alternative Data Improves UX and Helps Marketing Teams

Alternative data, used in modern credit scoring, is a great discovery used not only by fintech and financial institutions but also UX and marketing teams. It is a set of information that comes through different sources such as social media, mouse movements, app payments, invoices and ecommerce purchases that are analyzed by artificial intelligence algorithms capable of building consumer behavioral patterns.

Alternative data technology was initially designed to reduce credit risk and improve the scoring processes, but it also helps businesses discover insights about their prospects. These insights from smartphone metadata are known as fragments. The main difference between fragments and alternative data is that the latter is raw data, while fragments are concepts and ideas obtained after that data has been collected and analyzed.

Fragments allow companies to obtain information in real time. This provides UX managers with the tools to make fast, accurate decisions compared to traditional market research. For example, you can detect actions that indicate consumer doubt, dropout or even data manipulation in a subscription process. Also, with device information such as brand, operating system and model, designers can glean how consumers feel about technology and adapt design to their digital skills to improve their browsing experience. Also, by knowing how tech savvy they are, you can do technographic segmentation, offering a wide variety of products or services for different types of customers.

In addition, fragments allow fraud detection during subscription. For example, they are able to discover if a phone is locked or open to a global network or, in the case of loan applications, if there are repeated registrations coming from the same IP, browser or device. Also, they can identify how active the owner of a smartphone is, depending on the volume of files or contacts saved. All these insights are essential in order to develop mechanisms that guarantee security, especially in products or services that involve risk, such as loans, insurance or online investments.

Fragments derived from alternative data are essential for uncovering more granular consumer behaviors and lifestyles. This helps to build better segmentation models and more appropriate customer journeys that offer delight experiences. Knowing consumer behavior and lifestyle is possible because alternative data technologies are capable of analyzing installed apps inside customers’ smartphones. Therefore, marketing teams are able to understand which kind of products, services or games the prospect consumes and know if the person is interested in certain fields such as sports, health, gaming, finance, etc.  As well, detection of calendar events is a fragment that could indicate how organized a person is.

Fragments become essential in order to move a step further from competitors by finding new customers’ needs in shorter periods of time. With data obtained in real time, marketing teams have the tools to make more accurate and faster decisions compared to any traditional market research. For example, they could improve marketing campaigns message or segmentation by offering better promotions, more tailored offers, and product recommendations based on a better understanding of customer behaviors. 

Data Fragments and Consumer Privacy

It is logical to think that alternative data technology is intrusive for consumers. However, providers use smartphone metadata that contains non-personal information. This means that while businesses can understand prospect behavior more accurately, they can’t access their private data. For instance, through alternative data a marketing team can learn which kind of finance apps customers use, but can’t see what goes on inside the platforms.

Fragments stay in compliance with regulations. For instance, according to the EU’s GDPR, when personal data becomes anonymous it cannot be considered personal anymore. In addition, the data used has been previously consented information by the customer.

Moreover, one of the main benefits for consumers, besides receiving tailored offers and having a better browsing experience, is that their data is protected from cyberattacks such as phishing. Metadata anonymity prevents hackers for accessing sensitive information, thwarting identity crimes. Thus, data fragments are help ensure a healthy onboarding process, securing an effective user verification while detecting possible fraudulent behaviors.

Thanks to access to data from smartphones and AI, you can get to know customers better and make tailored offers adapted to their interests. With a better understanding of their behaviors, UX and marketing teams can also resolve questions related to dropouts or app removals. You can also infer how comfortable users feel with the browsing experience, thus enhancing the decision-making process.

Michele is the MD and Chief Strategy Officer of credolab Americas