What are Data Consortiums?
In order to benefit everyone involved, a small group of businesses occasionally decides to pool their information. However, no specific personal information is shared among the businesses in the group. These organisations are sometimes referred to as “data consortiums.”
Data consortiums are organised to assist groups of organisations in exchanging general consumer insights and trends in order to improve customer service.
How do Data Consortiums work?
You could consent to being contacted by a company that belongs to this group if you sign up for one of their services or products. They may have also told you that they might give us access to your information so we can assist them in getting in touch with you more efficiently and provide a better overall customer experience.
Clients (who are the consortium’s members) exchange pertinent consumer transactional data among themselves, such as the amount spent, the date of the most recent purchase, and the products brought. Anonymized and aggregated insight reports regarding the purchasing and web usage patterns of the pool’s customers are produced using this data.
In order to prevent mailing customers who are less likely to utilise home shopping, to target just those people who are most likely to reply, and to make offers through the customer’s preferred channel, this information is communicated back to members.
We never disclose the private information given to us by consortium members with any other members, and the reports we offer to members never contain information that may be used to specifically identify clients. We also do not utilise this information outside of the member group.
Where proper marketing permissions are in place, members may additionally utilise the insight for marketing to help find relevant new prospects (names and addresses) from a marketing database for a mailing.
What is Consortium Data for fraud prevention?
Fraudulent transactions and other behaviour inevitably rise as online transactions do as well. Organizations within fraud-prone industries frequently use consortium data as a line of protection against cutting-edge fraud tactics.
A technology called consortium data for fraud protection allows a collection of comparable retailers or enterprises to exchange data transactions and information. These consortium data systems make it easier to combat fraud because they provide all participating businesses access to additional data analytics and information about people who are trying the scam.
The greater the amount of transaction data that artificial intelligence-powered systems can examine, the better they will be able to do detection and prevention by looking for trends and problems.
How does Consortium Data help companies working together to Prevent Fraud
According to the Association of Certified Fraud Examiners (ACFE), fraud costs a business around 5% of its yearly revenue. When you convert that into dollars and compare it to the gross global output of $84.84 trillion in 2018, you find that $4.24 trillion was somehow stolen.
Therefore, how do consortium data systems function? Especially in business and insurance, creating third-party corporations is a typical strategy for cooperation between rival retailers seeking to exchange internal data. Companies will be able to exchange data openly and transparently while still safeguarding the data of their clients if they have the right processes and agreements in place.
Joining forces makes sense and also saves money and resources for everyone as all merchants and their fraud detection service providers have the same objective of minimising fraud. Software that detects fraud trends inside a consortium often notifies all group members about the pattern. This facilitates the development of a simplified, effective fraud prevention strategy.
Know more about IDcentral’s solutions
Request a Demo