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Customer Relationship Mnagement in Banking.ppt

The document presents an overview of the CRM architecture and best practices at a financial institution, highlighting the importance of consolidating customer information for enhanced marketing, sales, and service processes. It discusses the implementation of a global data warehouse and the use of predictive analytics to improve customer engagement and campaign effectiveness. Furthermore, it emphasizes the need for multi-channel strategies to provide a seamless customer experience, ensuring that financial services are accessible anytime and anywhere.

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Global Architecture Customer Relationship Management Christopher Williams - General Manager, Global Marketing Services - June 2000
2 The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 28th June 2000. It is information given in a summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. Disclaimer
3 Extract from an in-house presentation to a major Financial Services Group “ There are only two banks in the world who are truly pushing the frontiers of customer understanding - one is yourselves and the other is National Australia Group” The Business Banking Board (US)
4 CRM Best Practices CRM “best practices” are comprised of three groups of interrelated processes
5 How CRM is being delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
6 CRM Best Practice - Customer Insight  Dataware House Development/CIF  Customer Insights Segmentation  Customer profitability  Behaviour, needs, and attitudes
7 Global Data Warehouse Australia New Zealand Tailoring Financial Solutions - Our journey from Data to Customer Knowledge and Excellence in Customer Relationship Management Late 80’s, early 90’s 1994 - 1998 1998 - 1999 1999-2000 Customer Information File MASDA Market Vision National Leads Underway Global Data Warehouse (Europe) Banker Desktop Globalisation of Leads Customer Management Project
8 Data Warehouse - The Big Picture DATA WAREHOUSE (Storage) B A S E Customer Initiated Transactions, Genesis Sources & GRIPPS Productivity data FIC GIN General Insurance Cards CHANNEL CRMS Portfolio Risk Costing CARD Wholesale Other Trans Data Fees Full Costing & Profitability of Relationship External Industry Data Sales & Service Non-Customer Bank Losses External Competitor and Environmental Data Statutory & Financial Reporting PRODUCT External Market Research Data MARKET RESEARCH RISK Funds Management Complete Customer Portfolio Balance Sheet FAST Source Systems AWSO Bills Trading CAMS CA/SB Cards Fees GA Leasing L.C. Market Entity Other Non-Genesis Sources (e.g. Other Products) Includes FAST & External Industry Data Relationship
9 Global Data Warehouse These capabilities underpin our CRM platform Data Warehouse Data Warehouse Relationship Datamart Channel Datamart Credit Risk Datamart Product Datamart Global HR Cards Direct Marketing Marketing Information Extermal & Internal Databases • Research Methodologies • Market Intelligence Market Opportunities Segment Identification Campaign Requirements Individual Prospects Brand Management & Communication Effectiveness Tools Database Marketing - Intelligent/Predictive Marketing Algorithms Statistical & Optimisation Models Sales Program Management Distribution and micro market analysis Pricing Methodologies Segmentation methodology & standards Life event identification Predictive Marketing Information Management Leads, cross sell opportunities, behaviour enhancement campaigns, value proposition refinement and new business opportunities Direct Marketing
10 Profiler Banker Portfolio Relationship Group Kendall Furniture Group Customer List Profit Contribution $ Products/Services £ ¥ Customer Relationship Group Summary Profit Contribution $ John Kendall (CEO) Needs Met = 1 Asset Quality and Early Warning Transactional Behaviour Products/Services ¥ Peer Group Comparison £ Risk Reward % X X Gap Customer Summary * * * yet to be implemented refer examples attached Business / Personal Banker $ ROE Profiler is available on the Banker’s Desk top
11 How CRM is being delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
12 Campaign/Contact Management Campaign/Contact Management  Targeting high-potential/value customers  Customer event detection  Delivering the opportunity to the sales force  Fulfillment  Capturing feedback  Tracking result, holding best outcome results  Updating models
13 • …delivering high quality sales & service leads across all channels, every day to all sales staff. • …having “campaigns” for all segments and all financial needs • …where each campaign is multi channel, multi offer, multi target - continuous learning loop • …alignment of sales activities with retailing and marketing objectives (“customer management and contact”) Best Practice Customer Relationship Management Is
14 Where is the National? Where are we going? Knowledge Competency Management of complexity: multi segment, multi channel, multi offer The National Bank of Americ a CIBC AME X Wells Farg o Schwab The National is ahead of major Australian competitors and has global best practice in Australia for integrated event driven campaign management but we still have lots to achieve Our Target Australia
15 Integrated Relationship Management Capability Customer Contact/ Interview Relationship Management Opportunity Analysis National Leads Sales & Fulfilment Needs Analysis & Capture Customer Satisfaction Retention & Profitability Plan Preparation Customer wealth care plan
16 Customer Needs Record (FINAP) Bankers consult with customers to gather financial profile information, using standard mini-FiNAP/ FiNAP process Other Bankers, eg.Call Centre/ MFP/MMM can access Customer Needs Record for background information and can update data Bankers update Needs Record as new data is gathered. Data is available to Sales Coaches by BUId Bankers key collected data into Customer Needs Record in Customer Notes Customer Notes Database Analytical Marketing utilise data to generate marketing activities that arise from customer needs Sales Customer Needs Record 6
17 The National Leads System Campaign Management Software (NCR/Teradata Relationship Optimiser) Personal Bankers Branches Package Business Bankers Customers Call Mail or Combination Leads Feedback: Responses captured and measured Scoring & Event Detection NCR/Teradata Relationship Optimiser Mail Call Centres DWH SUN/ Oracle E-mail ATM Relationship Optimiser, National’s Integrated Campaign Management Software was developed jointly by the National and NCR (97-99)
18 • Daily Activities (eg. deposits, home loans repayment enquiries) are recorded in source (transaction) systems • A continuous (historical) transaction pattern/profile for each customer is kept in a database • Queries “trawl” this database every night to search for any unusual changes (which is of interest to us) • Any significant changes in a customers transaction pattern is detected (eg. a very large deposit today relative to the average over the previous six months). This is an “event”. • Best events (prioritised) are sent daily (every morning) to bankers for action managed by Relationship Optimiser) Event Detection
19 National Leads Event Based Campaigns Examples of Customer Initiated Events Event Type Event Event Description Significant Balance Change Investment Needs  Customers account holdings increased by large or significant amount (20K-to$50K, $50K+).  Lead delivered to banker next day who contacts customer with offer eg. Financial Planning appointment Large Transactions Withdrawals Deposits  A transaction out of the ordinary for that customer eg. greater than average for last 3 months.  Lead delivered to banker next day who contacts customer to identify and fulfil changed needs Home Loans Redraw request Payout request  Call Centre receives request for redraw or payout.  Lead delivered to banker next day who contacts customer to identify and fulfil changed needs
20 National Leads Event Based Campaigns Examples of Account Initiated Events Event Type Event Event Description Term Deposits Renewal Upgrades  Maturing lead delivered to banker.  Banker contacts customer to renew Deposit, increase deposit amount, offer Financial Planning referral. Home Loans Fixed rate Rollovers Maturity  Maturing lead delivered to banker.  Banker contacts customers to renew loan, fulfil future needs eg. Financial Planning referrals.
21 • Summarised data (up to 1600 variables) on customers is stored in Predictive Modelling Datamarts and updated monthly • Statistical models (or rules) to profile customer behaviour/needs for various financial services and products are developed from these files. • Best leads (ie. highest propensity, highest strike rates) are selected and sent to bankers by Relationship Optimiser for action. Propensity Scoring
22 • Relationship Optimiser manages: • how often we communicate with a customer • what channel we use and what we offer • when we communicate with customers • what is the best opportunity to be offered to the customer (ie. prioritisation of leads) Relationship/Campaign Managment
23 The “cube”, a concept developed at the National, is now used in every Database CRM campaign. The performance of each cell is the basis of selection for the “next round”. Over time the best combination of channel, offer and target market is identified and future campaigns will use only these cells. With this process the “cube” effectively acts as a continuous improvement process. World class database marketing is: • leads across all channels • campaigns for all needs and segments • multi channel, multi offer, multi target • alignment of sales activities with marketing and marketing objectives Target segments Reticents Rule 1 Rule 2 Mail – no follow up call Telephone with mail confirmation (NFM call centre) PB call (PFS customers only) Mail first – PB follow up (PFS customers only) Mail first – CSA follow up (RFS customers only) MFP appointment More information (Booklet) Seminar Propensity model Directives Control groups Channel Mail with follow up of non respondents by NFM call centre               Offer
24 For the six month period ending April 2000, both AFS and NFM drawdowns continue to increase reaching a combined total of almost $3 billion. NFM drawdowns have doubled since August 1999. $2,413 $2,548 $2,684 $2,783 $2,786 $2,736 $2,915 $2,989 $2,999 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 Aug-1999 Sep-1999 Oct-1999 Nov-1999 Dec-1999 Jan-2000 Feb-2000 Mar-2000 Apr-2000 Six Month Period Ending Aug - 999 Sep - 1999 Oct - 1999 Nov - 1999 Dec - 1999 Jan - 2000 Feb - 2000 Mar - 2000 Apr - 2000 NFM Drawdowns ($ million) $26.2 $32.5 $38.5 $42.7 $44.0 $46.5 $49.2 $51.0 $52.3 Bank Drawdowns ($ million) $2,386.4 $2,515.3 $2,645.4 $2,741.8 $2,741.4 $2,689.0 $2,866.0 $2,938.3 $2,946.6 Six month period ending Total Drawdowns from National Leads Campaigns (inclusive of NFM drawdowns) Six monthly rolling reporting period ($ million)
25 $27.54 $44.33 $217.56 $168.80 $17.70 $19.21 $345.83 $263.87 $2.13 $59.37 $391.32 $109.81 $175.82 $242.09 $5.72 $3.14 $55.31 $15.72 $145.23 $13.17 $48.81 $22.83 $115.24 $16.98 $99.01 $4.57 $6.19 $73.46 $80.72 $1.89 $0.58 $0.04 $0.27 $135.11 $0 $50 $100 $150 $200 $250 $300 $350 $400 Drawdowns by Campaign for November 1999 to April 2000 All figures shown in Millions See next page The National Leads Sales/Events campaign schedule covered 34 different integrated (bank and NFM products) campaigns
26 The Investment Needs program produced an outstanding sales result. By providing bankers with details of significant increase in customers deposit holdings they were able to make proactive contact. That contact resulted in the following product drawdown profile. November 1999 - April 2000 $ By Campaign from previous page $391.32 $103.76 $32.84 $12.48 $4.62 $4.24 $1.50 $0.30 $0.05 $231.53 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 TERM DEPOSITS HOME LOANS PERSONAL DEPOSITS OTHER PERSONAL LENDING BUSINESS LENDING PERSONAL LOANS CARDS RURAL BUSINESS $ Million
27 0% 10% 20% 30% 40% November 1999 December 1999 January 2000 February 2000 March 2000 April 2000 17% 18% 19% 20% 21% Term Deposit Drawdowns (LHS) Market Share 2000 (RHS) Market Share 1999 (RHS) Market Share 2000 Market Share 1999 Selected National Leads campaigns generating Term Deposit Drawdowns : Campaign Start Date Leads Contacted TD increase to next tier 26-11-1999 12843 TD bonus rate 3-12-1999 12870 Retirement Retention 1-1-2000 1853 Deposits -Y2K 4-1-2000 1542 Results of Term Deposit Program
28 Drawdowns for 6 months to April 2000 430,872 294,762 $2,946.6 No. of Leads No. of Customers Total Drawdowns ($ Million)
29 External Customers • Accessing external data sources • Dev’t capacity to target offers to non-customers Non-Customer Target • USA • GB Global National Leads • BNZ • UK/Europe • MNB Expand National Leads Channels to: • E-mail • ATM • Voice • Internet 2000 National Leads: Next Steps in Journey
30 Email Format Response held in National Leads Campaign Management System. Next action triggered automatically National Leads sends offer to customer, via email National Leads sends confirmation of customer response, via email
31 Needs Features NATIONAL’S FLEXIPLUS FACILITY Funding - Home Loan other secured lending Payments/transaction - Deposits, withdrawals, transfers Savings - Savings tax effective, at lending rate Channel - Accessible via Web, ATM, Branch Information - One statement One National Product meets five needs, while still one single product. Product Design/Flexibility Embraces a Tailored Financial Solution
32 Products/Arrangements per Customer 0 2 4 6 8 Custom Package Retail Agri Private Premium Retail Total Total Product & Arrangement Per Customer
33 National Integrated Marketing Activities Are Centred Around Customer Needs Needs Home Loan Non Home Loan Other Bank Deposits Non Bank Deposits Non Bank Retirement Superannuation House and Contents Life General Other Internet Banker/ Online Banker Branch Various Channel Migration Other Total Private 5 1 1 7 Premium 3 1 12 5 2 2 1 1 1 1 1 1 1 1 1 34 Retail 5 2 1 11 3 2 1 1 1 1 1 1 1 1 1 3 36 Package 2 1 4 2 1 1 1 1 1 14 Custom 2 2 4 Rural 1 1 Total 8 6 4 32 11 5 4 2 3 2 5 2 3 2 3 4 96 Funding Investment Risk Management Payments Information Campaigns as of June 2000
34 CRM Best Practices Excellence in Service Delivery Excellence in Service Delivery  Easy enrollment through customer choice of touchpoints  Tiered service  Contact management provides knowledge of relationship, transaction history, and transaction status  Seamless cross channels
35 How CRM is being delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
36 CRM provides a true multi channel proposition Technology is now allowing customers to choose where, when and how their financial services are delivered… “anywhere, anytime, anyway”
37 CRM Customer Experience Vision 1. Anytime, anywhere access and navigation to 2. friendly, capable, proactive resources which have 3. organisational memory and can execute a 4. streamlined, personalised, secure process to create a 5. consistent and totally satisfactory customer experience while demonstrating a track record of 6. continuous improvement and 7. superior profitability. Customer focused marketing, sales and service, and the following seven themes
38 CRM Vision  “Clicks and Mortar” Customer Centricity  360 degree View of the Customer  Customer Process Excellence  Consistent Interaction Handling  Common Technical Architecture  Alternative Interaction Methods  24 hour Customer Relationship  Anytime / Anywhere Access
39 How CRM is being delivered at The National CRM Centre of Excellence Program Management Technology Enablement Operational Support Help Desk Global Consistent Customer Experience Organisation and Human Performance Partnership Global Best Practice Regional Needs The National have brought together Siebel as the technology platform provider and Andersen Consulting as the system integrator partner to enable the realisation of the CRM Vision. The CRM Centre of Excellence has been established to ensure integration of Regional needs with Global Best Practice.
40 How CRM is being delivered at The National - Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Internet Customer Contact Centre Sales Force National Leads/Relationship Optimiser Customers Siebel Back Office Outlets Data warehouse Middleware
41 How CRM is being delivered at The National • Achieve a consistent global customer experience • Deliver consistent best practice business solutions across each regional bank • Utilise common technology platform - Siebel • Maximise leverage of scare resources • Responsiveness to each regional bank • Support regional implementations Criteria Centralised Distributed Federal Assessment of Approach Legend Excellent Good Fair AFS MNC BNZ Europe Total Estimated Days 21,735 16,632 8,904 14,784 62,055 days AFS – GR1 – GR2 – GR3 MNC – GR1 – GR2 – GR3 BNZ – GR3 Europe – GR2 – GR3 COE Total Estimated Days 8,379 5,019 1,722 1,638 6,804 3,738 1,722 1,344 3,213 3,213 6,006 4,704 1,302 23,320 47,722 days Four Separate projects Global Centre of Excellence    Business Case † † † Draft Business Case pending approval, March 2000 The centralised approach reduces the overall labour costs compared to four separate regional projects due to reduced overlapping tasks. It also ensures CRM delivers one Global Solution which achieves a consistent global customer experience.
42 How CRM is being delivered at The National Sept Oct Nov Dec 1999 Jan June Dec Jan 2000 2001 Siebel Selected MNC Release Global Design AFS Deployment Global Release 1 Global Release 2 Release 1 Feb Release Q2 Confirmation of region/ timing for 2001 releases Live in MNC Call Centre 31May The approach is to develop a global solution based on the MNC Siebel implementation; deploy to AFS in Feb 2001 and deliver two global releases in 2001 which provide increased functionality
43 Customer Response Centre Mobile Planner Internet Banker A Single View of the Customer
44 Global Release One The scope of CRM is Sales and Service across each Retailer in three global releases. In Scope -18 Months Sales/Service Channels • Financial Services Centre/Suites • Full Service Branch (non teller) • Call Centre • Private Banking Suites • Business Banking Centre • Mobile Bankers (remote connectivity) • External Referral Partners • Products & Services • Internet Front End Sales/Service Channels • Sales - Order Taking • Sales - Needs Based • Service - Enquiry • Service - Aftercare • Marketing - Customer Insight at Point of Interaction • Marketing - Campaign Management • Cross Sell / Up Sell • Referral Management
45 Global Release One The scope of CRM is Sales and Service across each Retailer in three global releases. Products • Personal Loans • Credit Cards • Mortgages • Overdrafts • Business Lending • Cheque • Savings • Term Deposits • Financial Planning (initial & record only) • Leasing • Insurance • Investments In Scope -18 Months
46 CRM Benefits A fully implemented CRM solution will give the National the ability to maximise the life time value of its customers. It coordinates all customer access channels together to produce products and services that are worth far more than the sum of their parts. This is achieved by:  Being able to easily cross sell products and services to customers that those products are relevant to.  Providing a single, consistent view of the customer across the enterprise.  Enabling National staff to see all communications, contact and interaction history across all channels with the bank.  The integration of front end systems to a single/ fewer front ends for users.  Providing a consistent message, brand and experience to customers across all channels.  Enabling better understanding of customers hence better retention rates.  Reducing marketing costs by only targeting those customers with a propensity to buy.
47 CRM benefits have been quantified  Increase customer base 6% per year  Average balance per client increased 9% per year  ROA remain 40-50 basis points above industry  Net Interest margin outperforms industry by 150-140 BP  Productivity/employee growing 2 times industry  Grew rate of loans and deposits twice as fast as industry  10% increase in customer base (206,000 new customers)  ROI 100-200 basis points higher than industry average  Minimal headcount increase European  Created a virtual bank subsidiary (no branches)  Grew to 25,000 customers and assets of $780 M in first 9 months of operation  93% of customers satisfied with service quality  8% increase in retention  Increase probability of meeting service levels by 96% European European American Customer Insight Customer Interaction Manage Customer Value Value Lever Benefit Core Capabilities AC Banking Client © Andersen Consulting 2000 Andersen Consulting banking client experiences demonstrates outstanding results
48 CRM benefits have been quantified Results from Siebel’s independently conducted customer satisfaction surveys further support the benefits derived through its implementation
49 CRM benefits supporting the implementation Customer Retention +2.5% Sales +5% 5 Year Discounted Benefits $328m The National is focusing in on two core benefit streams resulting form the CRM implementation:
50 How CRM is being delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
51

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Customer Relationship Mnagement in Banking.ppt

  • 1.
    Global Architecture Customer RelationshipManagement Christopher Williams - General Manager, Global Marketing Services - June 2000
  • 2.
    2 The material thatfollows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 28th June 2000. It is information given in a summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. Disclaimer
  • 3.
    3 Extract from anin-house presentation to a major Financial Services Group “ There are only two banks in the world who are truly pushing the frontiers of customer understanding - one is yourselves and the other is National Australia Group” The Business Banking Board (US)
  • 4.
    4 CRM Best Practices CRM“best practices” are comprised of three groups of interrelated processes
  • 5.
    5 How CRM isbeing delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
  • 6.
    6 CRM Best Practice- Customer Insight  Dataware House Development/CIF  Customer Insights Segmentation  Customer profitability  Behaviour, needs, and attitudes
  • 7.
    7 Global Data Warehouse Australia NewZealand Tailoring Financial Solutions - Our journey from Data to Customer Knowledge and Excellence in Customer Relationship Management Late 80’s, early 90’s 1994 - 1998 1998 - 1999 1999-2000 Customer Information File MASDA Market Vision National Leads Underway Global Data Warehouse (Europe) Banker Desktop Globalisation of Leads Customer Management Project
  • 8.
    8 Data Warehouse -The Big Picture DATA WAREHOUSE (Storage) B A S E Customer Initiated Transactions, Genesis Sources & GRIPPS Productivity data FIC GIN General Insurance Cards CHANNEL CRMS Portfolio Risk Costing CARD Wholesale Other Trans Data Fees Full Costing & Profitability of Relationship External Industry Data Sales & Service Non-Customer Bank Losses External Competitor and Environmental Data Statutory & Financial Reporting PRODUCT External Market Research Data MARKET RESEARCH RISK Funds Management Complete Customer Portfolio Balance Sheet FAST Source Systems AWSO Bills Trading CAMS CA/SB Cards Fees GA Leasing L.C. Market Entity Other Non-Genesis Sources (e.g. Other Products) Includes FAST & External Industry Data Relationship
  • 9.
    9 Global Data Warehouse Thesecapabilities underpin our CRM platform Data Warehouse Data Warehouse Relationship Datamart Channel Datamart Credit Risk Datamart Product Datamart Global HR Cards Direct Marketing Marketing Information Extermal & Internal Databases • Research Methodologies • Market Intelligence Market Opportunities Segment Identification Campaign Requirements Individual Prospects Brand Management & Communication Effectiveness Tools Database Marketing - Intelligent/Predictive Marketing Algorithms Statistical & Optimisation Models Sales Program Management Distribution and micro market analysis Pricing Methodologies Segmentation methodology & standards Life event identification Predictive Marketing Information Management Leads, cross sell opportunities, behaviour enhancement campaigns, value proposition refinement and new business opportunities Direct Marketing
  • 10.
    10 Profiler Banker Portfolio Relationship Group KendallFurniture Group Customer List Profit Contribution $ Products/Services £ ¥ Customer Relationship Group Summary Profit Contribution $ John Kendall (CEO) Needs Met = 1 Asset Quality and Early Warning Transactional Behaviour Products/Services ¥ Peer Group Comparison £ Risk Reward % X X Gap Customer Summary * * * yet to be implemented refer examples attached Business / Personal Banker $ ROE Profiler is available on the Banker’s Desk top
  • 11.
    11 How CRM isbeing delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
  • 12.
    12 Campaign/Contact Management Campaign/Contact Management Targeting high-potential/value customers  Customer event detection  Delivering the opportunity to the sales force  Fulfillment  Capturing feedback  Tracking result, holding best outcome results  Updating models
  • 13.
    13 • …delivering highquality sales & service leads across all channels, every day to all sales staff. • …having “campaigns” for all segments and all financial needs • …where each campaign is multi channel, multi offer, multi target - continuous learning loop • …alignment of sales activities with retailing and marketing objectives (“customer management and contact”) Best Practice Customer Relationship Management Is
  • 14.
    14 Where is theNational? Where are we going? Knowledge Competency Management of complexity: multi segment, multi channel, multi offer The National Bank of Americ a CIBC AME X Wells Farg o Schwab The National is ahead of major Australian competitors and has global best practice in Australia for integrated event driven campaign management but we still have lots to achieve Our Target Australia
  • 15.
    15 Integrated Relationship ManagementCapability Customer Contact/ Interview Relationship Management Opportunity Analysis National Leads Sales & Fulfilment Needs Analysis & Capture Customer Satisfaction Retention & Profitability Plan Preparation Customer wealth care plan
  • 16.
    16 Customer Needs Record(FINAP) Bankers consult with customers to gather financial profile information, using standard mini-FiNAP/ FiNAP process Other Bankers, eg.Call Centre/ MFP/MMM can access Customer Needs Record for background information and can update data Bankers update Needs Record as new data is gathered. Data is available to Sales Coaches by BUId Bankers key collected data into Customer Needs Record in Customer Notes Customer Notes Database Analytical Marketing utilise data to generate marketing activities that arise from customer needs Sales Customer Needs Record 6
  • 17.
    17 The National LeadsSystem Campaign Management Software (NCR/Teradata Relationship Optimiser) Personal Bankers Branches Package Business Bankers Customers Call Mail or Combination Leads Feedback: Responses captured and measured Scoring & Event Detection NCR/Teradata Relationship Optimiser Mail Call Centres DWH SUN/ Oracle E-mail ATM Relationship Optimiser, National’s Integrated Campaign Management Software was developed jointly by the National and NCR (97-99)
  • 18.
    18 • Daily Activities(eg. deposits, home loans repayment enquiries) are recorded in source (transaction) systems • A continuous (historical) transaction pattern/profile for each customer is kept in a database • Queries “trawl” this database every night to search for any unusual changes (which is of interest to us) • Any significant changes in a customers transaction pattern is detected (eg. a very large deposit today relative to the average over the previous six months). This is an “event”. • Best events (prioritised) are sent daily (every morning) to bankers for action managed by Relationship Optimiser) Event Detection
  • 19.
    19 National Leads EventBased Campaigns Examples of Customer Initiated Events Event Type Event Event Description Significant Balance Change Investment Needs  Customers account holdings increased by large or significant amount (20K-to$50K, $50K+).  Lead delivered to banker next day who contacts customer with offer eg. Financial Planning appointment Large Transactions Withdrawals Deposits  A transaction out of the ordinary for that customer eg. greater than average for last 3 months.  Lead delivered to banker next day who contacts customer to identify and fulfil changed needs Home Loans Redraw request Payout request  Call Centre receives request for redraw or payout.  Lead delivered to banker next day who contacts customer to identify and fulfil changed needs
  • 20.
    20 National Leads EventBased Campaigns Examples of Account Initiated Events Event Type Event Event Description Term Deposits Renewal Upgrades  Maturing lead delivered to banker.  Banker contacts customer to renew Deposit, increase deposit amount, offer Financial Planning referral. Home Loans Fixed rate Rollovers Maturity  Maturing lead delivered to banker.  Banker contacts customers to renew loan, fulfil future needs eg. Financial Planning referrals.
  • 21.
    21 • Summarised data(up to 1600 variables) on customers is stored in Predictive Modelling Datamarts and updated monthly • Statistical models (or rules) to profile customer behaviour/needs for various financial services and products are developed from these files. • Best leads (ie. highest propensity, highest strike rates) are selected and sent to bankers by Relationship Optimiser for action. Propensity Scoring
  • 22.
    22 • Relationship Optimisermanages: • how often we communicate with a customer • what channel we use and what we offer • when we communicate with customers • what is the best opportunity to be offered to the customer (ie. prioritisation of leads) Relationship/Campaign Managment
  • 23.
    23 The “cube”, aconcept developed at the National, is now used in every Database CRM campaign. The performance of each cell is the basis of selection for the “next round”. Over time the best combination of channel, offer and target market is identified and future campaigns will use only these cells. With this process the “cube” effectively acts as a continuous improvement process. World class database marketing is: • leads across all channels • campaigns for all needs and segments • multi channel, multi offer, multi target • alignment of sales activities with marketing and marketing objectives Target segments Reticents Rule 1 Rule 2 Mail – no follow up call Telephone with mail confirmation (NFM call centre) PB call (PFS customers only) Mail first – PB follow up (PFS customers only) Mail first – CSA follow up (RFS customers only) MFP appointment More information (Booklet) Seminar Propensity model Directives Control groups Channel Mail with follow up of non respondents by NFM call centre               Offer
  • 24.
    24 For the sixmonth period ending April 2000, both AFS and NFM drawdowns continue to increase reaching a combined total of almost $3 billion. NFM drawdowns have doubled since August 1999. $2,413 $2,548 $2,684 $2,783 $2,786 $2,736 $2,915 $2,989 $2,999 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 Aug-1999 Sep-1999 Oct-1999 Nov-1999 Dec-1999 Jan-2000 Feb-2000 Mar-2000 Apr-2000 Six Month Period Ending Aug - 999 Sep - 1999 Oct - 1999 Nov - 1999 Dec - 1999 Jan - 2000 Feb - 2000 Mar - 2000 Apr - 2000 NFM Drawdowns ($ million) $26.2 $32.5 $38.5 $42.7 $44.0 $46.5 $49.2 $51.0 $52.3 Bank Drawdowns ($ million) $2,386.4 $2,515.3 $2,645.4 $2,741.8 $2,741.4 $2,689.0 $2,866.0 $2,938.3 $2,946.6 Six month period ending Total Drawdowns from National Leads Campaigns (inclusive of NFM drawdowns) Six monthly rolling reporting period ($ million)
  • 25.
  • 26.
    26 The Investment Needsprogram produced an outstanding sales result. By providing bankers with details of significant increase in customers deposit holdings they were able to make proactive contact. That contact resulted in the following product drawdown profile. November 1999 - April 2000 $ By Campaign from previous page $391.32 $103.76 $32.84 $12.48 $4.62 $4.24 $1.50 $0.30 $0.05 $231.53 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 TERM DEPOSITS HOME LOANS PERSONAL DEPOSITS OTHER PERSONAL LENDING BUSINESS LENDING PERSONAL LOANS CARDS RURAL BUSINESS $ Million
  • 27.
    27 0% 10% 20% 30% 40% November 1999 December1999 January 2000 February 2000 March 2000 April 2000 17% 18% 19% 20% 21% Term Deposit Drawdowns (LHS) Market Share 2000 (RHS) Market Share 1999 (RHS) Market Share 2000 Market Share 1999 Selected National Leads campaigns generating Term Deposit Drawdowns : Campaign Start Date Leads Contacted TD increase to next tier 26-11-1999 12843 TD bonus rate 3-12-1999 12870 Retirement Retention 1-1-2000 1853 Deposits -Y2K 4-1-2000 1542 Results of Term Deposit Program
  • 28.
    28 Drawdowns for 6months to April 2000 430,872 294,762 $2,946.6 No. of Leads No. of Customers Total Drawdowns ($ Million)
  • 29.
    29 External Customers • Accessingexternal data sources • Dev’t capacity to target offers to non-customers Non-Customer Target • USA • GB Global National Leads • BNZ • UK/Europe • MNB Expand National Leads Channels to: • E-mail • ATM • Voice • Internet 2000 National Leads: Next Steps in Journey
  • 30.
    30 Email Format Response heldin National Leads Campaign Management System. Next action triggered automatically National Leads sends offer to customer, via email National Leads sends confirmation of customer response, via email
  • 31.
    31 Needs Features NATIONAL’S FLEXIPLUSFACILITY Funding - Home Loan other secured lending Payments/transaction - Deposits, withdrawals, transfers Savings - Savings tax effective, at lending rate Channel - Accessible via Web, ATM, Branch Information - One statement One National Product meets five needs, while still one single product. Product Design/Flexibility Embraces a Tailored Financial Solution
  • 32.
    32 Products/Arrangements per Customer 0 2 4 6 8Custom Package Retail Agri Private Premium Retail Total Total Product & Arrangement Per Customer
  • 33.
    33 National Integrated MarketingActivities Are Centred Around Customer Needs Needs Home Loan Non Home Loan Other Bank Deposits Non Bank Deposits Non Bank Retirement Superannuation House and Contents Life General Other Internet Banker/ Online Banker Branch Various Channel Migration Other Total Private 5 1 1 7 Premium 3 1 12 5 2 2 1 1 1 1 1 1 1 1 1 34 Retail 5 2 1 11 3 2 1 1 1 1 1 1 1 1 1 3 36 Package 2 1 4 2 1 1 1 1 1 14 Custom 2 2 4 Rural 1 1 Total 8 6 4 32 11 5 4 2 3 2 5 2 3 2 3 4 96 Funding Investment Risk Management Payments Information Campaigns as of June 2000
  • 34.
    34 CRM Best Practices Excellencein Service Delivery Excellence in Service Delivery  Easy enrollment through customer choice of touchpoints  Tiered service  Contact management provides knowledge of relationship, transaction history, and transaction status  Seamless cross channels
  • 35.
    35 How CRM isbeing delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
  • 36.
    36 CRM provides atrue multi channel proposition Technology is now allowing customers to choose where, when and how their financial services are delivered… “anywhere, anytime, anyway”
  • 37.
    37 CRM Customer ExperienceVision 1. Anytime, anywhere access and navigation to 2. friendly, capable, proactive resources which have 3. organisational memory and can execute a 4. streamlined, personalised, secure process to create a 5. consistent and totally satisfactory customer experience while demonstrating a track record of 6. continuous improvement and 7. superior profitability. Customer focused marketing, sales and service, and the following seven themes
  • 38.
    38 CRM Vision  “Clicksand Mortar” Customer Centricity  360 degree View of the Customer  Customer Process Excellence  Consistent Interaction Handling  Common Technical Architecture  Alternative Interaction Methods  24 hour Customer Relationship  Anytime / Anywhere Access
  • 39.
    39 How CRM isbeing delivered at The National CRM Centre of Excellence Program Management Technology Enablement Operational Support Help Desk Global Consistent Customer Experience Organisation and Human Performance Partnership Global Best Practice Regional Needs The National have brought together Siebel as the technology platform provider and Andersen Consulting as the system integrator partner to enable the realisation of the CRM Vision. The CRM Centre of Excellence has been established to ensure integration of Regional needs with Global Best Practice.
  • 40.
    40 How CRM isbeing delivered at The National - Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Internet Customer Contact Centre Sales Force National Leads/Relationship Optimiser Customers Siebel Back Office Outlets Data warehouse Middleware
  • 41.
    41 How CRM isbeing delivered at The National • Achieve a consistent global customer experience • Deliver consistent best practice business solutions across each regional bank • Utilise common technology platform - Siebel • Maximise leverage of scare resources • Responsiveness to each regional bank • Support regional implementations Criteria Centralised Distributed Federal Assessment of Approach Legend Excellent Good Fair AFS MNC BNZ Europe Total Estimated Days 21,735 16,632 8,904 14,784 62,055 days AFS – GR1 – GR2 – GR3 MNC – GR1 – GR2 – GR3 BNZ – GR3 Europe – GR2 – GR3 COE Total Estimated Days 8,379 5,019 1,722 1,638 6,804 3,738 1,722 1,344 3,213 3,213 6,006 4,704 1,302 23,320 47,722 days Four Separate projects Global Centre of Excellence    Business Case † † † Draft Business Case pending approval, March 2000 The centralised approach reduces the overall labour costs compared to four separate regional projects due to reduced overlapping tasks. It also ensures CRM delivers one Global Solution which achieves a consistent global customer experience.
  • 42.
    42 How CRM isbeing delivered at The National Sept Oct Nov Dec 1999 Jan June Dec Jan 2000 2001 Siebel Selected MNC Release Global Design AFS Deployment Global Release 1 Global Release 2 Release 1 Feb Release Q2 Confirmation of region/ timing for 2001 releases Live in MNC Call Centre 31May The approach is to develop a global solution based on the MNC Siebel implementation; deploy to AFS in Feb 2001 and deliver two global releases in 2001 which provide increased functionality
  • 43.
    43 Customer Response Centre MobilePlanner Internet Banker A Single View of the Customer
  • 44.
    44 Global Release One Thescope of CRM is Sales and Service across each Retailer in three global releases. In Scope -18 Months Sales/Service Channels • Financial Services Centre/Suites • Full Service Branch (non teller) • Call Centre • Private Banking Suites • Business Banking Centre • Mobile Bankers (remote connectivity) • External Referral Partners • Products & Services • Internet Front End Sales/Service Channels • Sales - Order Taking • Sales - Needs Based • Service - Enquiry • Service - Aftercare • Marketing - Customer Insight at Point of Interaction • Marketing - Campaign Management • Cross Sell / Up Sell • Referral Management
  • 45.
    45 Global Release One Thescope of CRM is Sales and Service across each Retailer in three global releases. Products • Personal Loans • Credit Cards • Mortgages • Overdrafts • Business Lending • Cheque • Savings • Term Deposits • Financial Planning (initial & record only) • Leasing • Insurance • Investments In Scope -18 Months
  • 46.
    46 CRM Benefits A fullyimplemented CRM solution will give the National the ability to maximise the life time value of its customers. It coordinates all customer access channels together to produce products and services that are worth far more than the sum of their parts. This is achieved by:  Being able to easily cross sell products and services to customers that those products are relevant to.  Providing a single, consistent view of the customer across the enterprise.  Enabling National staff to see all communications, contact and interaction history across all channels with the bank.  The integration of front end systems to a single/ fewer front ends for users.  Providing a consistent message, brand and experience to customers across all channels.  Enabling better understanding of customers hence better retention rates.  Reducing marketing costs by only targeting those customers with a propensity to buy.
  • 47.
    47 CRM benefits havebeen quantified  Increase customer base 6% per year  Average balance per client increased 9% per year  ROA remain 40-50 basis points above industry  Net Interest margin outperforms industry by 150-140 BP  Productivity/employee growing 2 times industry  Grew rate of loans and deposits twice as fast as industry  10% increase in customer base (206,000 new customers)  ROI 100-200 basis points higher than industry average  Minimal headcount increase European  Created a virtual bank subsidiary (no branches)  Grew to 25,000 customers and assets of $780 M in first 9 months of operation  93% of customers satisfied with service quality  8% increase in retention  Increase probability of meeting service levels by 96% European European American Customer Insight Customer Interaction Manage Customer Value Value Lever Benefit Core Capabilities AC Banking Client © Andersen Consulting 2000 Andersen Consulting banking client experiences demonstrates outstanding results
  • 48.
    48 CRM benefits havebeen quantified Results from Siebel’s independently conducted customer satisfaction surveys further support the benefits derived through its implementation
  • 49.
    49 CRM benefits supportingthe implementation Customer Retention +2.5% Sales +5% 5 Year Discounted Benefits $328m The National is focusing in on two core benefit streams resulting form the CRM implementation:
  • 50.
    50 How CRM isbeing delivered at The National Business Architecture The CRM architecture consolidates all customer information for consistent marketing, sales and service processes independent of channel … ensuring closed loop customer processes, which elevate the customer experience. Customer Touch Points Channel Services CRM/Siebel Cross Channel Architecture Interaction Management System Contact Management Physical Outlet Mobile Customer Response Centre Internet ATM Kiosks Mail Facsimile National Leads NCR/Relationship Optimiser* Leads Third Party eg. Mail House Campaign Performance Operational Master Customer Database Prod Admin Systems Transaction Systems Gateways Insight Engines CRM Front End Customer Interface Fulfilment Personal Banker Analytical Data Warehouse (SUN/Oracle) Data Mining * Campaign Management Channel Services Architecture
  • 51.