Banking behaviour: Insights from 100k statements

Finch Technologies co-founder Christopher Ball analyses over 100 000 bank statements to reveal key insights into consumer behaviour, supplementary incomes, micro-betting, grocery shopping patterns, and anomalies.

In the dynamic realm of fintech, data has emerged as the new currency, highly sought after by financial institutions and businesses alike for its potential to enhance decision-making and risk management.

It is within this rapidly evolving fintech landscape that Finch Technologies has taken a deeper dive into understanding South African consumer behaviour. Our technology meticulously analysed over 100,000 bank statements, here are a couple of the key findings:

Supplementary incomes

According to Nedbank, 1 in 3 employed South Africans have a side-hustle or supplementary income. At Finch Technologies, one core process involves identifying an individual’s primary source of income, whether it’s a salary, wage, or grant. The data reflected a massive prevalence of supplementary incomes for South African consumers.

Many individuals, it seems, are not solely reliant on a single source of income. A typical user profile emerged: someone who receives a primary salary or wage but also experiences additional payments on a weekly basis. These supplementary incomes were usually EFTs from external individuals. The pattern here is undeniable and hints at the intricate web of financial support that people often rely on to make ends meet.

Betting in the digital age

Current statistics show that around 10% of the country’s population partake in some form of regular gambling. Among the myriad of insights gleaned from processing thousands of bank statements, one trend stood out — gambling and micro-betting.

In 2022, the gambling industry in South Africa saw revenue worth R34 billion, a 48% increase from the previous year, perhaps this revelation shouldn’t be too surprising. However, the extent to which individuals engage in betting was truly eye-opening. Time and time again, bank accounts processed illustrated a significant portion of transactions were attributed to bets.

These individuals were actively placing bets, and this data is something financial institutions or businesses should be taking note of and asking themselves does it ultimately affect consumer financial health?

Grocery shopping patterns

No matter whose bank statement was analysed, one constant transaction emerged—grocery shopping. However, the way people went about this essential task varied dramatically. On one end of the spectrum, there were the conventional “big grocery shoppers” who stocked up their carts after payday, ensuring they had enough to last for an extended period. \

On the other hand, there were those who exhibited far more spontaneous behaviour, making multiple trips to the grocery store throughout the day.

These diverse grocery shopping patterns revealed a lot about individuals’ lifestyles and their approach to managing their household expenses.

Another interesting insight, which are data also reflects is who was doing all the shopping, according to National Debt Advisors 68% of grocery store consumers were woman. Inflation has also been a major influencer in the average grocery shop cart size, as well as what consumers are actually putting in their carts.

According to TrendER, South Africans are cutting back on non-essential items like snacks, biscuits and desserts (47%) as well as alcoholic beverages (42%), and are spending on average R4 542,93 a month on groceries.

Curious anomalies

Between 2018 to 2022, South Africa saw a 600% increase in fraud cases, and more specifically an 18% increase in digital banking fraud incidents. In response to the growing need for a proactive approach to fraud prevention, AI and fintech companies are developing products that can easily detect fraud.

Through examining 100k bank statements, anomalies were identified. One such example is a bank account that received a massive payment one day, only to see an almost equivalent amount, less R4 000 leave the account the very next day. The sudden and substantial movement of funds was perplexing; therefore, it triggered a fraud alert.

This sort of anomaly usually leads to financial institutions or fintechs further unpacking the data to understand the exact reasoning behind the behaviour.

Another noteworthy observation related to discrepancies between transaction amounts and account balances. Occasionally, the bank deducted more than the transaction amount when calculating an individual’s balance.

This seemingly innocuous detail raised questions about the accuracy of balance reporting and prompted the development of an internal detector to identify and address such cases as they arise.

As fintech continues to evolve, the insights gained from such large-scale data processing enable the refinement of services and better assistance to businesses in their risk assessment endeavours. The digital age has ushered in a new era of financial insights.

By meticulously examining the transactions that flow through countless bank accounts, valuable knowledge about consumer behaviours, financial habits, and societal trends is gained.

• The views expressed in this article by Finch Technologies co-founder Christopher Ball do not necessarily represent the perspective of Ventureburn.

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