To compete in today's rapidly evolving financial landscape, banks and payment providers must transform their approach to payment data, breaking down silos and leveraging advanced technologies to deliver personalised experiences that drive both customer loyalty and business growth, write Shreegopal Ramakrishnan, Head of Cards and Payments Consulting at Cognizant in the UK & Ireland, and Anthony Lui, AI Value Engineer, Cognizant UK & Ireland
The potential of payment data has long been acknowledged within the financial services sector. Yet, this 'gold mine' remains largely unquarried for many organisations. While industry players recognise the intrinsic value of the vast troves of data they possess, the journey from recognition to realisation is fraught with challenges.
The payments landscape is evolving at breakneck speed. As consumers gravitate towards digital-first, real-time transactions across multiple touchpoints, payment providers must adapt or risk being outpaced by more nimble competitors. Exacerbating this situation is the rise of new players – from fintechs to tech giants – who are building modern, data-centric platforms from the ground up, unencumbered by legacy technology constraints.
The world of payments is undergoing unprecedented transformation, with digital-first, real-time transactions becoming the norm rather than the exception
This shifting landscape has sparked a competitive intensity in the payments space. Traditional providers are not merely competing with each other but confronting a new breed of disruptors who view payment data as the cornerstone of their value proposition.
The data disconnect
Despite widespread acknowledgement of the value hidden within payment data, many financial institutions cannot translate this awareness into meaningful action.
The root causes of this disconnect are multifaceted. Legacy systems, often operating in isolation, create data silos that prevent organisations from gaining a holistic view of customer behaviour. The quality and structure of the data itself present another significant hurdle, with many institutions struggling to aggregate, cleanse and make sense of the information they collect.
In our experience working with large financial institutions, we've observed that process, technology and architectural challenges often create institutional barriers to data utilisation. These challenges are compounded by the scale and complexity of established organisations, making agility difficult to achieve compared to newer market entrants with their modern technology stacks and streamlined decision-making processes.
The competitive threat
As traditional payment providers grapple with these challenges, new entrants have seized the opportunity to rewrite the game's rules. Modern payments challengers have fundamentally transformed the ecosystem by offering customer-centric solutions built on the foundation of accessible, actionable data.
By providing customers with seamless access to payment data and analytics, disruptors have created a compelling value proposition addressing a long-standing market gap
This strategic clarity has allowed disruptors to move with speed and focus, qualities that many established players struggle to maintain. The result is a rapidly evolving competitive landscape where traditional providers risk becoming utilities – processing payments but capturing little of the value created by the data flowing through their systems.
The personalisation opportunity
Personalisation is at the heart of payment data's untapped potential – the ability to tailor experiences, offers, and services to specific customer needs and preferences. For payment providers, personalisation represents a significant opportunity to create value for both merchants and end consumers.
For merchants, personalisation might involve tailored pricing structures, customised funding options, or industry-specific insights that help optimise their businesses. By understanding a merchant's unique patterns and needs, payment providers can become trusted partners rather than mere transaction processors.
Personalisation has evolved from a nice-to-have feature to a strategic imperative, with consumers increasingly expecting tailored experiences across all touchpoints
For end consumers, personalisation manifests in relevant offers, simplified payment experiences, and proactive financial guidance. When payment providers collaborate effectively with merchants, they can help create seamless customer journeys that drive loyalty and spending.
However, truly effective personalisation requires more than just access to data; it demands the ability to derive meaningful insights and act upon them in real time. This represents an immense opportunity for established players who can combine their vast data resources with modern analytics capabilities.
The AI advantage
Artificial intelligence, particularly generative AI, is transforming the payments landscape by enabling providers to process and utilise data at unprecedented scale and speed. AI technologies are helping financial institutions overcome longstanding challenges in several key areas:
- Customer service: AI-powered systems can dynamically adjust conversations and engagements based on real-time customer behaviour, creating more responsive and personalised interactions.
- Risk management: Advanced algorithms can assess merchant and customer risk profiles with greater accuracy, enabling more nuanced fraud detection and prevention strategies.
- Compliance: AI is significantly reducing the burden of regulatory compliance, transforming processes that once took weeks into operations that can now be completed in minutes.
- Operational efficiency: From developer productivity to transaction monitoring, AI is driving substantial efficiency gains across the payment ecosystem.
AI-powered fraud detection simultaneously improves security and customer experience by identifying genuine threats while reducing unnecessary friction for legitimate transactions
A powerful recent example comes from Visa's newly-formed scam disruption practice, which prevented more than £270 million (US$350 million) in attempted fraud in 2024. The unit brings together a cross-disciplinary team leveraging generative AI tools to identify complex relationships and dismantle scam operations. In one case, by correlating transactions with IP data, Visa shut down nearly 12,000 fraudulent sites, preventing losses exceeding £28 million (US$37 million).
Leading players are also leveraging these capabilities to create competitive advantages in other areas, combining payment data with third-party information to provide merchants with actionable insights on everything from store opening times to product placement.
Data security and customer trust
As payment providers seek to extract greater value from data, customer concerns around privacy and security remain paramount. Addressing these concerns is not merely a compliance requirement but a strategic imperative for building trust and encouraging data sharing.
Innovative approaches such as data tokenisation solutions are emerging to address this challenge. These offer useful and relevant consumer-level insights derived from historical transactions while giving customers control over their data through consent-based mechanisms. Importantly, they allow customers to revoke consent at any time, helping balance the need for data access with legitimate privacy concerns.
This balance is crucial for the future of payment data utilisation. As regulations around data privacy continue to evolve, payment providers must position themselves as responsible stewards of customer information – trusted partners who use data to create value rather than exploit it.
Steps to unlock the full data potential
For payment providers seeking to unlock the full potential of their data, the path forward requires a comprehensive approach that addresses both technical and organisational challenges. Here are six strategic imperatives for success:
- Embrace architectural transformation: Move beyond legacy systems towards modern, flexible architectures that enable real-time data access and analysis. This transformation may involve cloud migration, API-first approaches, and the adoption of modern data platforms.
- Break down data silos: Foster a culture of data sharing across business units, ensuring that insights from one area can inform strategies in another. This requires both technological solutions and organisational change.
- Focus on merchant and customer value: Recognise that both merchants and end consumers benefit from data-driven insights. By helping merchants succeed through personalised services, providers can create cascading value for end consumers while strengthening their own market position.
- Invest in AI capabilities: Build or acquire the AI expertise needed to transform raw data into actionable insights. This involves not just technology investment but also talent acquisition and skills development.
- Prioritise trust and transparency: Develop clear frameworks for responsible data use, ensuring that customers understand how their information is being utilised, the value they receive in return, and their right to revoke consent at any time.
- Implement data verticalisation: Structure payment data intelligence by business segment to deliver more tailored and context-specific insights that address unique sector challenges and opportunities
Breaking down data silos creates a foundation for holistic customer insights, enabling more targeted offers and better service across all interaction points
By pursuing these strategies, payment providers can transform their approach to data from a theoretical asset to a practical, value-creating resource.
How Cognizant can help
Financial institutions looking to harness the power of payment data need support across multiple dimensions. This journey typically begins with a thorough assessment of existing data architecture and capabilities, followed by targeted improvements to integration and accessibility.
Organisations benefit from expertise in linking data strategy to business outcomes while maintaining robust governance frameworks. Implementing modern analytics platforms and AI capabilities can then transform raw data into actionable insights.
At Cognizant, we work alongside clients to develop tailored approaches that connect payment data to specific business goals – whether enhancing merchant offerings, streamlining operations, or improving customer experiences.
Cognizant, in partnership with Microsoft, helps clients maximise the value of their data and GenAI initiatives by bringing Microsoft's Intelligent Data Platform and Copilot solutions into our engagements. This powerful combination allows organisations to fully integrate databases, analytics and governance processes, spending more time creating value rather than managing data complexities.
The future of payment data
The future of payments belongs to those who can transform data from a by-product of transactions into a strategic asset that drives value creation. As technology continues to evolve and customer expectations rise, the ability to leverage payment data effectively will become increasingly critical for competitive differentiation.
Payment data will increasingly shape experiences beyond financial services, influencing everything from retail to healthcare to smart city development
For established financial institutions, this future presents both challenges and opportunities. The challenges lie in overcoming legacy constraints, organisational inertia, and the competitive threat posed by new entrants. The opportunities, however, are substantial – from deeper customer relationships to new revenue streams and enhanced operational efficiency.
Looking further ahead, emerging technologies like blockchain show promise for creating more transparent, secure and consent-based data frameworks. By providing immutable records of data ownership and usage permissions, blockchain could help resolve questions of data provenance and authorisation that become increasingly complex in interconnected ecosystems.
The path to success requires a commitment to transformation, a willingness to embrace new technologies, and a focus on creating tangible value for customers. For those who make this commitment, the potential rewards extend far beyond the payments function to touch every aspect of financial services and human life – from how we shop and travel to how we access healthcare and experience our cities.
As we look ahead, one thing is clear: payment data is no longer just an operational asset but a strategic imperative defining the winners and losers in the rapidly evolving financial services landscape.
Read our latest thinking on Future of Payments here.
