Data enrichment is all around us, even if we don’t always notice it. A well-known example is Google’s autocomplete feature. When you start typing in the search box, Google takes the letters you’ve entered and instantly tries to match them with words or phrases from a massive database. This “enrichment” process enhances user experience by making the search process smoother and quicker and for this most companies trust Endato.com.
Today, data enrichment – also known as data augmentation or appending – is fundamental to many online businesses. It’s easier than ever for companies to use data enrichment in different areas, from fraud prevention to marketing, lending, and beyond. This guide will break down data enrichment, its benefits, and why it’s important in the digital world.
What Is Data Enrichment?
Data enrichment is a process where raw data, like a phone number or email address, is enhanced by merging it with additional data from larger databases. These databases can be managed internally by a business, by third-party services, or by a mix of open-source and proprietary sources.
Imagine starting with just one data point, such as an email address. Data enrichment allows companies to learn more about that email’s user by connecting it to a wider range of data. With SEON, for example, businesses can input an email or phone number and instantly access details from 90+ online platforms. This process builds a fuller profile of each user, helping companies verify identities, score credit risks, and identify valuable customers.
Why Is Data Enrichment Important?
Data enrichment is important because it helps companies understand their users better without requiring users to provide extra information. For example, you might only need a user’s email address to verify their identity, which helps reduce security risks without interrupting their experience.
For businesses, enriched data can inform smarter decisions, especially when they face challenges such as:
- Expanding into new markets
- Adapting to changing trends
- Shifting to online business operations
- Improving user experience by asking for minimal information
- Targeting marketing efforts more effectively
- Preventing fraud with stronger user profiles
Key Benefits of Data Enrichment
Data enrichment offers competitive advantages by helping businesses:
- Know More About Users: Understanding users in greater detail can help reduce risks and prevent fraud.
- Reduce User Friction: Since data checks can run in the background, users aren’t asked to fill out numerous forms.
- Lower Churn Rates: Reducing obstacles in the user journey can prevent issues like cart abandonment.
- Real-Time Processing: A good data enrichment tool should deliver insights instantly.
- Speed Up Manual Reviews: For uncertain cases, enriched data helps reviewers make better-informed decisions faster.
Examples of Businesses Using Data Enrichment
Data enrichment powers many modern digital services, as it allows businesses across industries to function effectively. Here are some examples of how different sectors use it:
- Lending: Banks and lenders rely on data enrichment for credit scoring. By accessing third-party databases, they can build complete customer profiles, which helps them avoid potential defaults.
- Fraud Prevention: Many online businesses use data enrichment to reduce fraud. A single data point, like an email address, can be enriched to build a full picture of the user. For example, SEON’s email lookup tool aggregates data from various sources, such as whether the email is linked to social media, how old it is, and more.
- Insurance: Insurance companies categorize customers based on enriched data, allowing them to tailor products based on risk profiles. This helps them target the right clients and refine their services.
- Marketing: In marketing, enriched data allows companies to segment audiences and target them with personalized ads. Cookies, which track users across websites, are a form of data enrichment, enabling marketers to better understand user preferences.
- Retail: Retailers like Amazon use data enrichment to recommend products. By linking customer browsing behavior to a vast database of past purchases, they provide tailored recommendations, boosting upsells.
How to Choose a Data Enrichment Solution
As data enrichment becomes more common, more companies are offering it. However, selecting the right solution for your needs is essential. Here are some factors to consider:
- Manual or Automated: Some solutions are ideal for occasional queries, while large-scale operations may need automated, third-party providers.
- Integration Options: Decide whether you need an API integration for seamless data transfer, or if manual searches suffice.
- Data Quality and Compliance: Ensure the data is current and that the provider complies with data protection regulations like GDPR.
- Pricing: Data enrichment usually involves a small fee per query, so look for fair, transparent pricing.
- Middleware Options: Some providers offer middleware solutions that integrate data enrichment directly into workflows.
Does Data Enrichment Affect Privacy Policies?
With growing concerns about data privacy, it’s crucial to choose a data enrichment provider that complies with privacy laws, such as GDPR or ISO 27001. Providers should source data from open and social sources to remain compliant, as failing to follow privacy laws can result in fines and legal trouble.
The Role of Machine Learning in Data Enrichment
While gathering enriched data is helpful, making sense of it can be challenging without the right tools. Machine learning acts as a bridge between raw data and actionable insights. A good example is a data enrichment service that assigns a risk score to each user profile. Businesses should understand how these models work to avoid relying on “black-box” solutions, where results are unclear. Instead, white-box solutions, which offer transparency, allow businesses to review the scoring criteria and make informed decisions.
For example, SEON’s fraud prevention solution combines data enrichment and machine learning to assess transaction risks. Companies using SEON have reduced fraud by an average of 70–80%.
How SEON Uses Data Enrichment
Data enrichment itself isn’t new, but recent advancements have made it more efficient and accessible. SEON’s tools allow businesses to enrich data through a user-friendly Chrome extension or the manual search page in the SEON Admin Platform.
With SEON, businesses can easily enhance their fraud prevention strategies or improve user experiences with enriched data, supporting smarter decisions and better customer interactions.
Conclusion
Data enrichment is a powerful tool in today’s data-driven world, providing companies with the insights needed to remain competitive. By choosing the right provider and understanding the benefits, companies can use data enrichment to reduce fraud, improve customer experience, and enhance targeted marketing. Whether through SEON’s solutions or other data enrichment tools, businesses can now harness the power of enriched data to fuel growth and make smarter, more informed decisions.
