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Segmint's use of big data adds up to large growth

Northeast Ohio
Segmint's use of big data adds up to large growth

Big data is turning into a big business in downtown Akron, where the data-mining firm Segmint just moved into new offices in the city-owned Hamlin Building.

The 9-year-old company, which moved Jan. 20-21 from One Cascade Plaza, provides data analytics, primarily to banks, savings and loans, and credit unions. CEO Rob Heiser says business is brisk as more banks realize both the value of customer data and his firm's expertise when it comes to using it.

"We tripled our revenue last year," Heiser said.

It was a slow year, he joked.

"Revenues quadrupled the year before," he said.

But as a young company, Segmint can't keep increasing its revenue fourfold, and Heiser said he's more than pleased with how it has begun to grow after gaining traction in the past few years.

He didn't say what those revenues total, or comment on the privately held company's profitability. But Heiser said banks increasingly turn to his company to help them understand what their customers need and when they need it.

More than 50 banks use Segmint's services, Heiser said, and customers range in size from $250 million community banks to national and super-regional banks with more than $300 billion in assets.

Banks, to no one's surprise, have a lot of information about their customers.

Segmint's expertise is in taking that data and turning it into usable information, including important marketing triggers.

When Segmint gets data from banks, it doesn't receive names, Social Security numbers or other identifiable information, only a coded ID along with transaction data. And the data does not include specific purchases. Segmint might know that someone shopped at Staples but not what they purchased.

From the data it mines, Segmint can tell a bank something along the lines of, "Customer FR3449YRT02 has likely just opened a business."

Or maybe they had a baby, got married, purchased a home, got sick, shopped for credit, wrecked a car, need a vacation, had a death in the family, got a divorce. You get the picture.

Then the bank can use the code to get the customer's name from its own database.

It's not that we necessarily tell our banks all this stuff outright, but we leave clues, lots of them. And with a little expertise and perhaps the right algorithm, those clues can tell a bank a lot about us and when to offer us, say, a car or student loan.

Someone who suddenly started using their debit card at office supply stores might be a good candidate for a business loan, for example. If they also just paid a filing fee with the secretary of state, they might be an even better candidate.

This is not news to the banking industry. Banks, including Cleveland's former National City Corp., now part of PNC Bank, began working with data mining at least as far back as the 1990s.

Since then, banks have only increased their zeal to capitalize on more information as their customers increasingly do their transactions in a digital world. There are multiple national conferences each year where bankers gather to discuss the latest strategies to exploit their data.

Some banks are also making big investments to handle the task in-house. Fifth Third, for example, told American Banker that it's decreasing its investment in branches in favor of data analytics and said last year it was hiring 200 additional developers and engineers to help advance those efforts.

Like other banks, Fifth Third is seeing more customers at its digital platforms and fewer in its branches.

Those are the trends Heiser is counting on to continue to build Segmint.

It was, admittedly, a slow start, said company investor and co-founder Tom Tyrrell, who is not complaining.

"It's taken a long time to jell, but most startups take longer than you ever think. I'm very pleased," Tyrrell said.

Heiser said he shares that sentiment, but also knew it would take time to gain traction in the banking sector. Banks build new relationships slowly, and the approval process for any new vendor working with the bank's data should be, and certainly is, a long one, he said.

But growth has come. Segmint is smaller in terms of people than it was a year ago. It's down from about 50 employees to 40, but that's because it narrowed its service offerings while still growing its customer base, Heiser said.

Now it's out looking for new technical employees and hiring again, he said.

Toward that end, the company hopes its new digs will help it to attract talent.

Its old offices at One Cascade Plaza were nice but not necessarily in keeping with the culture of a young, fast-growing tech company.

Its new offices are right on the Ohio & Erie Canal Towpath Trail and next to Akron's Canal Park ballpark and other downtown attractions, Heiser said.

That extra allure might come in handy, too, since Segmint will begin expanding its business this year to work not only with banks, but also with insurers and retailers.

That said, Heiser thinks banks will long be, and may always be, Segmint's primary customers. Their business, circumstances and opportunities are ideal for Segmint's skill set, he said. And, he added, there is still plenty of growth to do yet among the banks.

"We'll double our revenues again this year," Heiser said.

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