Payroll Data for Fintechs: A Gold Mine in the Making?
Payroll data can help fintechs and financial institutions uncover new consumer trends and buying behaviors for their services and products
Consumers today and now largely comfortable with digital and mobile banking and payments services. The evolution of how financial consumers are slowly transitioning from traditional payment and banking models puts the onus on fintechs and financial providers to understand more on how they can use better data to become more familiar with consumer interests in specific finance technologies or services, their future banking and finance needs, their potential investments and credit management; all with the aim of enhancing understanding of financial behavior to power more suitable products and services their way.
Payroll data can provide that opportunity in new ways, so is it now crucial for fintechs and banks to find better ways of tracking and understanding their customer payroll information, to benefit both, end users and providers?
Payroll Data: Unlocking a Gold Mine of Critical Data?
Fintechs, digital banking apps and especially payroll providers store information on their user base including income details, employment details, governing identities (social security, etc), investments and more. As consumers become more familiar with fintech to enable easier, all-time access to financial service they need, the number of fintech platforms and mobile payment apps that hold information such as this increases for each user. The number of payroll providers who offer data-driven services to help employees and users make better use of their finances based on this information are creating a steady ecosystem that connects personalized services to customers based on their actual financial health and habits. Financial wellness, benefits providers, third-party marketplaces can also learn to track and use this information on key prospects to deliver the most relevant products and services based on need.
Payroll data is More Reliable and Gives a True View of Actual Financial Health
Why is the information that payroll data can derive becoming more important for banks and financial institutions today? Simply put, payroll data and aggregates of it based on past income can help financial lenders (for instance) qualify for loans faster, optimize earnings from investments, even find the best rates for other services. With the wave of fintech integrations and connected APIs it is easier to upgrade systems and use this data to streamline further customer upselling and scale efforts.
Open Finance is the Future
With more and more fintechs and payroll companies realizing the key role that payroll data can play in the future fintech landscape, it is now critical to revisit internal data storage and data access processes. Leading fintechs such as Plaid already engage with payroll providers to not only provide reliable payroll data APIs but to also improve consumer permission based payroll data access.
Over the last several years, open banking capabilities was a key reason that drove a innovations in fintech. In the future, payroll data will unlock more promise by paving the way for consumer based innovations and products.