June 19, 2024

Elevate Transaction Data: Why Accurate Match Rates Matter

4 minutes

For financial institutions, banks, payment providers, and fintech innovators, extracting valuable insights from transaction data is critical. Moreover, consumers are increasingly looking to interface with those institutions and review their own financial information about their daily transactions.  However,  raw data alone doesn’t make sense to the consumer or guide better business decisions. It needs context and clarity. That is why many financial institutions are turning to advanced transaction data enrichment as a means to enhance the quality of their data and provide clearer information for their consumers. The most often cited measurement of transaction data enrichment is Match Rates.

Match rates are certainly one of the critical metrics used to assess the efficiency and effectiveness of transaction data enrichment – a process that transforms raw transaction data into actionable, consumer – comprehensible insights. By enriching users’ transaction data, consumers can see the merchant name, category, and even logos of their financial transactions. Match rates, in the context of transaction data enrichment, involve identifying and linking transaction data elements, such as merchant names and logos, transaction amounts, categories and dates, to their respective merchant profiles. 

Nothing is as frustrating for a consumer as not being able to identify exactly what their purchases were for or with whom they transacted. As well, nothing is as expensive for a banking institution as handling the support burden caused by dissatisfied customers. Match rates are therefore a key indicator as to how many of those transactions will actually be matched to a merchant. Very simply put, Match rates are figured out by dividing the number of successful matches (where transaction details meet merchant info) by the total processed transactions.

How transaction match rates are determined
Process for Determining Match Rates

Benefits of High Match Rates:

  • Enhanced Accuracy: The original messy transaction data has been enhanced with cleaned data and enriched with additional information, such as logos or graphics, to help easier recognition of the transactions. We accomplish this through our constantly improving database.
  • Reduced Chargebacks: Precise merchant identification helps address unauthorised transactions effectively, minimising costly chargebacks and improving customer trust.
  • Improved Customer Experience: Clear and categorised transactions, reduce anxiety,  empower customers with better spending insights and ease fraud identification, fostering trust and satisfaction.
  • Data-Driven Decision Making: Enriched transaction data also provides valuable insights into customer behaviour and preferences. This information can be used to develop targeted marketing campaigns, optimise product offerings, and enhance customer loyalty.

Main methods that can be used to improve match rates:

  • Data Quality: Ensuring that the raw transaction data is accurate and complete can significantly improve the matching process.
  • Machine Learning Approaches: Machine learning algorithms can be trained to identify patterns and relationships between transaction data and merchant information, enabling more sophisticated and accurate matching.
  • Using LLM’s (Large Language Models) such as ChatGPT or Gemini: Large Language Models can be efficiently mapped onto a banking information system to quickly and efficiently map the merchant information already collected by the financial institution.
Methods to improve transaction match rates
Methods used by the Snowdrop Solutions team to improve match rates

To put simply, through the power of transaction enrichment, you can transform raw financial data into a powerful asset; for both your consumers as well as your merchant clients. So it is about enrichment more than about the match rate. By harnessing the capabilities of our advanced transaction data API, known as the MRS API ™,  banks can seamlessly deliver comprehensive insights into financial transactions, fostering transparency and bolstering confidence among customers. 

Our solution doesn’t just enhance user experience; it streamlines operational efficiency, slashes costs, and catalyses expansion. 

When you are ready to unlock the full potential of your financial transactions, we are standing by to help unlock the full potential of your transaction data.