Every transaction a customer makes tells a story. Most banks only read the first line.
In its latest industry report, Turning raw transaction data into insights through data enrichment, Salt Edge, a leading open banking solutions provider, dives into how to turn raw transaction records into structured data that can be used reliably across financial applications.
The report argues that, while widely available, inconsistent transaction data formats across institutions and the lack of standardisation make it difficult to interpret, limiting its usability across key applications such as personal finance management, lending, and risk assessment. A single purchase at a local bakery can appear in dozens of different formats depending on the bank’s legacy systems.
Salt Edge’s report outlines how data enrichment bridges this gap, transforming fragmented line items into structured data points, including clean merchant names, logos, geographic coordinates, and precise categories.
Key highlights from the report
- 95% categorisation accuracy: The report details how Salt Edge achieves industry-leading accuracy (notably in the UK) through a hybrid approach of rule-based logic and machine learning models.
- Granular taxonomy: Salt Edge provides a proprietary tree of around 150 categories designed for both personal (80) and business (70) use cases. Each transaction is assigned a category to support visibility into how income is received and how it changes over time.
- Subscription intelligence: New capabilities enable the identification of recurring transactions, helping users track “hidden” subscriptions and allowing lenders to better calculate committed monthly expenditures.
- Financial insights for credit scoring: The report introduces the financial insights layer, which aggregates transaction history and transforms it into a structured financial overview to enable confident assessment of customers’ affordability and repayment capacity.
- Global scalability: With connectivity to over 5,000 banks across 50 countries, Salt Edge processes transactions in real-time with an average handling time of 1.5 to 3 milliseconds, supporting volumes of up to 300 million transactions.
Empowering diverse sectors
Financial institutions rely on transaction data to offer smart and personalised services. Data enrichment addresses this need by offering standardised data that supports a range of use cases.
One of the most significant findings in the report is the evolution of credit decisioning. For consumer lenders, enriched information supports more accurate affordability assessments and risk evaluation, helping reduce default risk while supporting more consistent and scalable lending processes.
The report also highlights the operational benefits for banks. When customers can clearly recognise their spending through clean merchant names and logos, they’re less likely to dispute transactions. This reduces the burden on support teams and fosters trust between the bank and the user. At the same time, behavioural insights support more effective fraud detection by identifying unusual patterns or changes in activity.
Another sector, mentioned in the report, that can make use of enriched transactional data is personal finance management (PFM). They rely on categorisation, merchant identification, and additional data points to provide customers with greater clarity into spending habits and financial behaviour. As users gain greater visibility into their finances, they are more likely to take action, improve their financial health, and continue using the app.
Similarly, business finance platforms and SME lenders use enriched transaction data to strengthen the financial tools they offer to businesses. Improved visibility into cash flow and operational expenses supports automated accounting processes, simplifies tax preparation, and enables more accurate financial forecasting.
The full report is now available and provides detailed insights into the technical capabilities, real-world applications, and strategic value of transaction data enrichment for modern financial services.
About Salt Edge
Salt Edge is a financial API platform with PSD2 and open banking solutions for every business. The company has two main vectors of activity: enabling third parties to get access to bank channels via a unified gateway and developing the technology necessary for banks to become compliant with the directive’s requirements. ISO 27001 certified and AISP licensed under PSD2, the company employs the highest international security measures to ensure stable and reliable connections between financial institutions and their customers. The company is integrated with 5,000+ financial institutions in 50+ countries. Salt Edge has been named a Strong Performer in The Forrester Wave™: Open Banking Intermediaries, 2023 Report.
More information: www.saltedge.com
Follow Salt Edge on LinkedIn and X
Email: press@saltedge.com