What the changes in data tracking mean for financial services

Data tracking is changing, and financial services firms should seize this opportunity to rethink their data strategy.
Written by
Sean Riordan
Published on
November 2, 2022
What the changes in data tracking mean for financial services

The way companies track and measure their websites and apps is in transition. The public battle around privacy between Facebook and Apple has impacted how companies can track users across apps and websites, as consumers and regulators become more conscious of how a person’s data is used.

In this article, we’re providing insight into what has prompted this change, why data is critical for financial services organisations, and what businesses can do to protect their customers’ data.

Why are these changes happening?

Apple’s privacy background

Apple’s first web privacy changes date back to 2017 when the company launched Intelligent Tracking Prevention, or ITP, which limited third party cookies in the mobile and Mac Safari browsers.

Apple’s iOS changes

It was Apple’s more recent updates in iOS 14.5 when the world (and primarily Facebook) really started taking notice. This update, which allowed users to simply opt out of cross app tracking, has been a driving factor in these industry changes.

According to Flurry research, around 96% of iPhone users have opted out of cross app tracking since iOS14.5 launched in 2020, indicating clear evidence of a change in consumer mindset.

Apple has around a 51.62% smartphone market share in the UK and, with the majority of people now using a smartphone as their primary computing device, this is a seismic change for the industry.

It also looks as if Apple is not yet done with the privacy changes, with their CEO, Tim Cook, vocal on the subject of more regulation around privacy, believing more change is needed in how companies use customer data.

Google’s changes

Google has also been rethinking its strategy on how its platforms operate regarding data and privacy. Google originally forecasted the phasing out of third-party cookies in its Chrome browser in 2022, alongside investigating its own anti-tracking features on its Android platform.

They’ve since delayed the phase-out to 2024, citing the reason it’ll give marketers more time to adjust their advertising approach and test out new, less intrusive targeted advertising technologies.

Google has now developed Google Analytics 4 which will replace Universal Analytics in July 2023. We’ll talk about that a little later in more detail.

How financial services firms are using data

Monzo’s data focus

In the financial services sector, leading organisations successfully seek how to optimise data to be more efficient and effective.

For example, Monzo’s success and incredible growth, from £100million to a company valued at £2billion in just four years, was through data-focused business decisions. In three years the data team at Monzo grew from just one person to a total of 30.

Whilst the need for rapid growth was a key motivator for challenger banks like Monzo, its data approach was reliant on having the expertise to adapt and succeed with it.

Currently Monzo makes most of its revenue from interfacing, in which it takes 0.2% for every debit card transaction. Despite recent valuations estimating the company to be worth £3.7billion, driving more revenue is vital to the long-term success of the business.

Data will continue to be a key part of Monzo being able to monetise their growth long term.

Insurance firms and predictive analytics

PWC describes data as “the lifeblood of the insurance industry” with data and predictive analytics making many elements of the sector simpler and more cost-effective, like:

  • pricing products
  • detecting fraud
  • gaining customer insight
  • improving risk assessment and underwriting efficiency

Willis Towers Watson found that over two thirds of companies reported that predictive analytics have helped increase sales and profitability.

Implementing predictive analytics is not a straightforward process. Here are key things to consider for an effective implementation:

  • clearly define your data goals
  • build the infrastructure – the more information you can integrate the better
  • launch early predictions – predictive analytics gets more accurate over time. Making predictions based on past data will help ensure you’re on the right path
  • constantly and consistently maintain and update your data

How financial services firms can prepare

We’ve just covered how data can help drive incredible business growth by understanding customers and their behaviour, but what can financial services firms do to prepare now?

You should start by making sure your business is using data effectively by:

  • understanding as a collective what the company privacy measures are and how they are implemented
  • ensuring industry/regulatory guidelines are followed
  • agreeing on and communicating the business KPIs
  • setting up a system for data decision-making
  • defining which data teams need access to make those decisions

This can be a time-consuming task and the total amount spent depends on the complexity of the business goals, product, and user journey.

But it’s time well spent. Any predictive model requires the right data to be effective, so to make sure accurate predictions are made, relevant and exact data must be collected.

It’s advised that a dedicated internal team is set up for this process, or you seek external expert support to guide the decision-making process. The accuracy required may mean you need to take on additional employees or engage a third party specialist so you should prepare for investment in this area.

Key leaders in the company should be involved from the start and they must always have in mind that a complete restructuring of processes may be required and, if this is the case, it shouldn’t be seen as a bad thing.

Four updates financial services firms can make today

Whilst the details above are key to formulating your long term first-party data strategy, there are four changes below that can be implemented immediately to get you heading in the right direction today.

1. Cookie and data privacy policies

Are your organisation’s current cookie and privacy policies accurate and transparent?

The use of first-party customer data will be a key component in digital campaigns that can no longer rely on cookies to operate. Is your company being clear to users about how their data may be used?

You can test whether your website is GDPR compliant by using Cookiebot’s free compliance checker.

2. Set up Google Analytics 4

As mentioned earlier, Google is developing its approach for cookieless tracking and Google Analytics 4 (GA4) is what this future looks like.

Unlike Universal Analytics (which will no longer receive updates from July 2023), GA4 has been designed to work without cookies, as it relies on Google’s machine learning algorithm. This algorithm can fill data holes that may be missed due to a lack of cookie data.

GA4 also has the added built-in benefit of being able to link to BigQuery. This means you can access the raw GA4 data and run SQL queries on it to help provide deeper analysis. This was a paid for feature exclusive to Analytics 360 but is now available to all users for no additional cost.

It’s vital you set up a GA4 account as soon as possible if you’ve not already done so. Being able to compare the data between UA and GA4 will ensure your tracking is not interrupted in July 2023 and that you have no gaps in reporting data.

For more information on setting up GA4, watch our 12-minute webinar – Preparing for the future of website tracking.

3. Set up Facebook’s conversion API

Facebook has developed their own solutions including verifying your domain and updating pixel events with priority events, so campaigns can better optimise and measure conversions.

These recommendations have been heavily prompted in Facebook ad accounts since the iOS14 changes were announced and should hopefully be implemented already.

Another change that can help future proof your ad accounts is the installation of the Facebook Conversions API. This can link your Facebook ad accounts to your server, web platform, or CRM for more accurate measurement in the absence of cookies.

4. Google ads

Making sure that your global site tag (gTag.js) and/or your Google Tag Manager is properly implemented on your site will ensure the best possible measurement and optimisation for your campaigns.

Setting up Google’s enhanced conversion can also improve the reporting and optimisation of ads. This works by sending hashed user data to Google when a lead is generated, allowing more accurate optimisation for those who have opted out of cookie tracking.

If you’re making any changes to your Google ad tracking, make sure your privacy policies are updated at the same time, so your website visitors know how their data is being used.

Seize this opportunity to rethink your data approach

Whilst many of the changes discussed are mandatory, this is a rare opportunity to rethink and future proof your organisation’s data tracking strategy.

Following the above steps now means you have a unique chance to review how your company is approaching and using data, and identify ways it can be improved for the better.

The financial services organisations that are the swiftest in taking on this responsibility will be the ones who’ll see the long-term benefits.

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