When an economic downturn is looming, many organizations look for ways to gauge the potential impacts on consumer spending and gain a clear understanding of the risks they face.
While a broad macroeconomic view can help financial institutions understand the full scope of potential market activity, they need a more targeted view of consumer spending trends to help evaluate the risks of a downturn at the national, state, and city levels. Detailed insights that can be filtered by location and market segment can help inform strategic planning, as impacts on consumer spending may vary by region.
The Visa Spending Momentum Index (SMI) from Visa Business and Economic Insights provides a granular view of consumer spending trends by analyzing aggregated and deidentified spend behavior data from millions of consumers. SMI provides a number of reporting solutions, such as a Recession Probability Index, that can help financial institutions with a detailed recession analysis to identify the risks they might face across different regions down to the local level.
In this brief video, Visa senior global economist Dulguun Batbold explains the Visa Spending Momentum Index in more detail as a guide to navigate business through economic cycles. He explains how SMI can provide an advance warning of emerging economic weakness at both the national and local levels, helping businesses plan ahead, adjust acquisition plans, reallocate marketing budgets or refocus areas for more risk monitoring.
In addition, just as important as managing economic cycles on the way down, the timeliness of our recession probability measure can also help businesses catch the recovery as it happens, rather than reacting after the fact. Keep in mind that U.S. recessions typically end within a year. Businesses that are earlier to restart marketing and acquisition campaigns can gain a strategic first-mover advantage as the recovery unfolds.
For eligible U.S. Visa clients, access to more detailed views such as geography, merchant or credential segment is available through subscriptions delivered via the Visa Analytics Platform. More custom engagements can be arranged by contacting Visa Consulting and Analytics (VCA), Visa's global client-facing team of payments consultants, data scientists and economists across six continents. VCA can help to identify an actionable SMI solution that best meets your needs and desired business outcomes. Contact: vca@visa.com
Disclaimer
The views, opinions, and/or estimates, as the case may be (“views”), expressed herein are those of the Visa Business and Economic Insights team and do not necessarily reflect those of Visa executive management or other Visa employees and affiliates. This presentation and content, including estimated economic forecasts, statistics, and indexes are intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice and do not in any way reflect actual or forecasted Visa operational or financial performance. Visa neither makes any warranty or representation as to the completeness or accuracy of the views contained herein, nor assumes any liability or responsibility that may result from reliance on such views. These views are often based on current market conditions and are subject to change without notice.