IBM Banking videocast - 3/20/2013

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Analytics in Banking:
Using Customer Profitability Analytics to Enhance Financial Performance.

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IBM Banking videocast - 3/20/2013

  1. 1. Analytics in Banking:Using Customer Profitability Analytics toEnhance Financial Performance © 2013 IBM Corporation
  2. 2. Q&A Resources Help © 2013 IBM Corporation
  3. 3. Live Demonstration: IBM CustomerProfitability AnalyticsWednesday 10th April 2013 at 12:00 PM ETHosted by: Owen KimberGlobal Financial Services Solution LeaderIBM Business Analytics Learn more and register © 2013 IBM Corporation
  4. 4. Using Customer Profitability Analytics toEnhance Financial Performance Frank McKeon, Banking and Financial Markets Industry Executive, IBM Business Analytics David McNab, Senior Managing Consultant, IBM Global Services Farhana Alarakhiya, Director, Industry Solutions, IBM Business Analytics © 2013 IBM Corporation
  5. 5. The new normal… Higher costs and complexity Regulation and governance Increased risk Scarce capital Demanding customers: more empowered and less loyal © 2013 IBM Corporation
  6. 6. According to a joint study by MIT Sloan and IBM… Organizations that put analytics into action are more likely to substantially outperform their competitors Organizations that lead in analytics 3x outperform those that are just beginning to adopt analytics Top performers are more likely to 5.4x use an analytic approach over intuition © 2013 IBM Corporation
  7. 7. Mary Checking: $5,000 Money Market: $30,000 Retirement $250,000 Average Credit Card Balance: $5,000 Mortgage: $250,000 © 2013 IBM Corporation
  8. 8. Jeremy Checking: $4,000 Money Market: $28,000 Retirement $175,000 Average Credit Card Balance: $10,000 Mortgage: $245,000 © 2013 IBM Corporation
  9. 9. Are they really the same? © 2013 IBM Corporation
  10. 10. Mary Age: 38 Income: $80,000 Lives in Chicago Married with one child Assistant Controller Channel preferences: web & mobile © 2013 IBM Corporation
  11. 11. Jeremy Age: 36 Income: $80,000 Lives in Boston Single Systems Analyst Channel preferences: branch, phone © 2013 IBM Corporation
  12. 12. 690 580 © 2013 IBM Corporation
  13. 13. How do we measure profitability?Fund Transfer ABC Costing & Risk Based Economic Expense Capital Pricing allocations Allocation value © 2013 IBM Corporation
  14. 14. Customer Views Hierarchal Views Business Unit Product Other / GeographyHouseholdCustomerAccount Non-Hierarchal Views 1/6/2009 Industry Currency Account Collateral Date Credit Status Officer © 2013 IBM Corporation
  15. 15. Implementing Customer ProfitabilityAnalytics © 2013 IBM Corporation
  16. 16. Implementing customer profitabilityanalytics With good foundation, implementation less than one year Leading banks adopt a process of continuous improvement © 2013 IBM Corporation
  17. 17. Critical success factors Executive sponsorship Vision for using customer profitability information Quality infrastructure © 2013 IBM Corporation
  18. 18. Remain current Most banks adopt a monthly cycle Customer profitability analytics must keep up with constantly changing business Repeatable, efficient maintenance process is mandatory © 2013 IBM Corporation
  19. 19. Turning insight into action Produce and manage centrally Deliver to the point of impact Make sure the information can be trusted Package to meet differing needs across the business © 2013 IBM Corporation
  20. 20. #1 factor for building the business case Create value for business users © 2013 IBM Corporation
  21. 21. Success at Banco Itaú Argentina © 2013 IBM Corporation
  22. 22. Banco Itaú Argentina  One of the world’s largest financial institutions  45 million clients  104,000 employees  4900 branches  30,000 ATMs  $360 billion in assets © 2013 IBM Corporation
  23. 23. Banco Itaú Argentina  Increase customer satisfaction  Maximize profitability  Optimize cross-selling and acquisition strategies The right offer…for the right client… at the right time…through the right channel… and at the correct price © 2013 IBM Corporation
  24. 24. Four phase implementation approach 1. Predictive models to identify customers most likely to respond 2. Automated cross-selling system to anticipate next best offer 3. Sales optimization system that measures expected revenues and cost of making the sale 4. Enterprise feedback management system with, which allows customized dialog and personalized product offers © 2013 IBM Corporation
  25. 25. Banco Itaú Argentina: Results 40% 60% revenue increase margin increase from existing customers from retail customers © 2013 IBM Corporation
  26. 26. Q&A © 2013 IBM Corporation
  27. 27. Live Demonstration: IBM CustomerProfitability AnalyticsWednesday 10th April 2013 at 12:00 PM ETHosted by: Owen KimberGlobal Financial Services Solution LeaderIBM Business Analytics Learn more and register © 2013 IBM Corporation

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