Professional Documents
Culture Documents
Standard Chartered Bank was looking for a tool that would help it analyze the huge
volumes of data captured by its OLTP systems. The objective was to analyze new
business opportunities, provide better customer service, and boost profitability. by
Soutiman Das Gupta
"Our customer base has grown three-fold in the last three years. Such a fervent pace
needed to be supported by efficient management of the huge volumes of data
generated and captured at each touch-point. After all it is absolutely essential to
keep up the bank's unchallenged reputation of efficiency," said Sedjwick.
Defining benefits
The bank's vision was to champion fact-based strategic business decisions using
best-in-class analytics. The objective was to enhance the organization's competitive
advantage and boost profits. The bank was looking forward to the following broad
benefits:
Solution needs
It was clear that in order to achieve the desired benefits, the bank had to implement
a data warehouse and analytical solution. Sedjwick said, "We wanted a solution that
can perform analytics on the valuable customer data to answer queries across
divisions. The answers would then enable us to proactively service customers and
thereby ensure customer loyalty and retention. This exercise is a must for survival in
a fiercely competitive environment."
He continues, "Any bank today cannot ignore the risk:reward equation. Calculating it
is a complex and challenging task that all bankers have to accomplish. It's the
process of applying a variety of scoring techniques across product lines to arrive at
the probable risk associated with each product sale and the possible rewards.
Examples of products are credit cards, auto loans, and personal loans. We wanted
the solution to leverage information on customer profiles and segments and enable
us to spread our risks based on empirical data analysis."
"We also wanted the solution to be scalable. This was crucial as the solutions would
be very critical to our business, and the volumes of data kept increasing
exponentially."
Evaluation
The bank created a team of 25 people in Bangalore and called it a Business
Intelligence Unit. This unit was responsible for deriving and implementing strategies
to analyze and exploit customer data.
"The company evaluated a number of solutions from Brio, Cognos, Business Objects,
and SAS. SAS was chosen as the preferred solution partner and SCB today relies on
SAS solutions across Asia for its customer analytics," said Sedjwick.
The SAS solutions reside on an IBM RS/6000 server running the AIX operating
system. The SAS software accesses and integrates data from multiple sources and
disparate systems across the enterprise. This data is then used for a variety of
analyses by the Business Intelligence Unit and is disseminated to all information
consumers across the bank. The information consumers include sales managers,
finance resources, credit resources, product heads and managers, and the head of
consumer banking via the SCB Intranet. "As a result, analytics provide a key
competitive edge and are used seamlessly for empowering business manager in their
goals," said Sedjwick.
Analytics' benefit
The solution has helped the bank effectively manage and optimize profitability of all
the products that constitute its retail portfolio.
Sedjwick said, "SAS's solutions forms a central part of the bank's CRM strategy. It is
easier for us to run targeted campaigns and elicit substantially higher returns since
we perform profit modeling for each account. This also enables micro-segmentation.
Using analytics, and a test and learn culture we know the likelihood of customers to
take a new product. We now know which card member is more likely to take an auto
loan. This has resulted in more focused marketing campaigns and reduced costs with
improved customer satisfaction."
New products
With the help of the Business Intelligence (BI) solutions, SCB was able to successfully
launch DIVA. DIVA is a specially designed women's international credit card targeted
at the Indian woman and bundled with several features. It includes discounts and
zero interest rates on categories like jewellery, cosmetics, apparel, consumer
durables, leather products, and mobile phones.
"This was possible due to an in-depth analysis of our customer data provided by the
BI solutions. We realized that a significant proportion of our business came from the
upwardly mobile Indian woman and was likely to grow substantially from this section
in the coming months. This gave us an impetus to launch a product which catered to
the needs of this segment and consolidate our position in the mind of the customer,"
said Sedjwick.
The bank also launched the aXcess plus savings account. Customers who have this
account can access cash at over 1800 ATMs worldwide through the Visa network.
Besides, they can use this account to shop for goods and services at over 25,000
outlets in India and at 10 million outlets worldwide. "This strategy was validated and
facilitated by the information provided to us by the BI unit. We realized that by using
this technique we could provide more value to our savings account customers and
help increase customer loyalty," declared Sedjwick.
Other benefits
"We are successfully able to calculate our risk:reward equation," said Sedjwick. SCB
uses SAS for scoring virtually all its products in the asset portfolio ranging from its
1.3 million credit card holders to its loan portfolio in excess of $ 860 million.
"Information on customer profiles and segments forms the backbone of product
strategy for us. It allows us to tailor our products across a diversified consumer base,
enabling us to spread the risk across a much wider spectrum," explained Sedjwick.
SAS solutions are also used to carry out simulations that help the bank assess its
overall profitability and balance its exposures across portfolios. The bank can carry
out stress tests on its portfolios and learn about the best case and worst case
scenarios. The working of the SAS library of advanced statistical techniques helps in
achieving the results and arriving at an optimized risk-adjusted capital.
"The solution can scale to handle different sizes of data and takes much less time to
analyze SAS data sets than it takes to analyze a standard relational database," said
Sedjwick.
Future plans
In future SCB plans to embark on SAS' data mining technologies for various
predictive modeling and advanced scoring initiatives to strengthen its risk
management framework in the area of retail lending.
"Now that we know our customer well enough to provide effective customer service
and maximize shareholder value, we will keep using information strategically so that
it contributes in providing a cutting edge to our organization," said Sedjwick.
SAS feels that a company has to adopt a truly customer-centric approach to manage its
business. It means that fundamental decisions on strategy and resource allocation must
be based on a detailed and accurate understanding of customers and the overall market.
It feels that customized CRM solutions can provide access to the information you need to
come out on top.
The customizable CRM solution can:
Source: www.sas.com