Businesses in the era of Big Data accumulate all the information they can from interactions with their own customers, but governments usually have wider concerns which require information beyond what one business can gather, and they need data that reveals patterns about the population in general.
Bancomer and BBVA Data & Analytics Have the Experience
Tourism is of vital importance to the Mexican economy. It is 8.7% of the GDP, generates 4 million jobs and grew by 19% in 2015 over the previous year. Secretaría de Turismo in Mexico (Sectur) needs to understand the spending patterns of tourists in order to plan infrastructure and marketing for that industry, but since tourist transactions are not with the state itself, the government has no means to gather the necessary data. That’s why it makes sense that Sectur would turn to financial institutions for help and to BBVA Bancomer and BBVA Data & Analytics specifically.
BBVA Bancomer and BBVA Data & Analytics (D&A) are both companies in the BBVA group. BBVA D&A was created from the BBVA Innovation Center in February of 2014 so that BBVA D&A could provide services outside of the financial sector, such as helping the public sector promote tourism and consequently the type of services Sectur needed.
BBVA D&A had been involved in the Smarter Cities initiative, and collaborated on studies with the Madrid City Council and with Segittur (part of Spain’s Ministry of Tourism). Using information culled from BBVA credit and debit cards and cards of other institutions used at BBVA POS devices, we were able to create a data set that is large enough and then normalize the data to prevent bias so that statically significant conclusions can be ascertained about the economy at large. In Spain, BBVA D&A created a data set aggregating 524 million transactions worth 24 billion euros for 48 million distinct clients (assuming 1 card per client), which allowed us to describe detailed spending patterns and produce visualizations of tourist activity in Spain, which is even a larger part of the Spanish economy than it is in Mexico, at 10.8% of Spanish GDP. Products leveraged by BBVA Data & Analytics in Spain included statistical reports, interactive visualization tools and APIs to access the anonymous and aggregated data to produce ad-hoc insights.
BBVA Bancomer’s Data Produces the Results
BBVA D&A’s ability to leverage that experience for Sectur was exactly what they were looking for. Bancomer welcomed an opportunity to strengthen the relationship. Sectur decided to start with a more limited scope and just examine the area of the Riviera Maya as a Proof Of Concept (POC), divided into 4 sub-geographies: Cancún, Isla Mujeres, Playa del Carmen and Cozumel. We used our experience to create a data set with Bancomer from 450 million transactions, 18 million individual cards and 115 thousands businesses. Of course it was not as simple as taking the raw data and immediately being able to interpret it. First the data has to be anonymized to guarantee client confidentiality (customer privacy comes before all else) and then aggregated to a meaningful granularity. Fortunately, BBVA D&A could efficiently adapt the processes used in Spain to meet Sectur’s needs.
The study provided a wide variety of descriptive statistics to Sectur. They could see how the tourists spent their money in numerous categories and subcategories of business types, the amounts of the transactions, geographic patterns of where transactions occurred and time series analysis for patterns by time of day, day of the week or time of year. They also learned a lot about the clients themselves. They could see where they lived and what age and gender cohorts they belonged to. Sectur validated the results by cross-referencing information with the data they traditionally collect and found the results were consistent with their data and added valuable information. They concluded the data would be useful for better demand segmentation analysis, would improve promotional campaigns, would reveal new opportunities close to main tourist sites, and would define areas where government could optimize business services.
Future Work Digs Deeper
There is plenty of room for Bancomer to add more value for Sectur. The POC did not define the country of origin for foreign visitors but only client origin-information for domestic clients, which was not a limitation for BBVA D&A’s work for Spain and will not be a limitation in future studies for Sectur, as this and more information will be included in 12 more reports Sectur has requested from Bancomer for 2016. Sectur already estimates that while US tourists are important, interest from Latin America is growing and that 30% of their foreign tourists come from Argentina and Colombia. They are anxious to have in-depth information in order to plan more efficient publicity campaigns abroad. The first two reports will be for Acapulco and Veracruz, and Sectur will prioritize the remaining ten studies. These reports are on the city level but could have been done on the national, regional or state level, whatever fits the client’s requirements. After those, of course, Sectur can look at the other value-add tools that BBVA D&A has provided to clients, such as dashboard visualizations and APIs.
Bancomer’s interest in the success of the project is not limited just to delivering more value to their public sector clients. With an eye on their own enlightened self-interest, Bancomer notes that they have extended credit to private sector tourism businesses to the tune of 15.5 billion pesos. This business has grown by 20% since last year and is expected to grow 15% to 20% in the coming years. Bancomer realizes when Sectur is successful, few others will be in a position to benefit from that success more than Bancomer.
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