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Unica wp ebm_financial

  1. 1. White PaPer Expanding the Power of Data: Event-Based Marketing in Financial ServicesOPPOrtUNitY aND iMPaCt Detect provides a revolutionary new approach to Event-BasedAs financial services rapidly embrace mobile computing, one-to-one Marketing that empowers financial services providers to takecustomer service, broadband information access, and always-on immediate action based on financial transaction records and othercommunications, increasingly large amounts of information are being customer behavior data. This new solution allows the detectiongenerated and transmitted. Nonetheless, computing costs continue of a wide range of behavior-significant patterns of interaction—to drop as computing power increases, allowing financial services patterns that can be simple or complex in structure; triggered byproviders to capture and retain an unprecedented amount of infor- single events, or extended over (widely variable) periods of time.mation about their customers—most notably regarding their specific These trigger structures allow you the room to grow your under-transactional activity as well as interactions with branch offices, call standing and effectiveness as increasingly subtle or complexcenter personnel, and electronic delivery channels. behavior patterns are detected, measured, and acted upon. OurThis large-scale increase in data assembly, as witnessed by the pattern-detection and comparison capabilities can take you beyondrapid growth of data warehouses and data-marts in back-end simple “pattern matching” triggers, and into behavior-based analysiscorporate systems, provides the foundation for a giant leap forward and response to execute these kinds of focused tactics:in managing customer relationships. There is great potential for • Reducing churn by distributing attrition triggers to your sales/advances which benefit both the firm and the customer. Yet crucial service force when a customer shows “signs of dissatisfaction”customer and business data often go ignored, and service and • Creating cross-selling and needs-analysis opportunities fromproduct offerings are generally not optimally targeted—in part due relevant dialogue you initiate with customers, triggered by trans-to the informational riches we have described here—which often actional behavior and product-use changesconstitute an overload on mission-critical business and communica-tions systems. • Modeling and executing a failsafe “on-boarding” experience for new customers by closely monitoring product adoptionAn acute need has developed for solutions that can empower finan- and usagecial services firms to make more immediate and accurate use of thedata assets they are rapidly accruing. • Detecting complex or subtle patterns in on-line banking use that may signal high risk or unauthorized activityCompetition (and for most financial services firms, regulation) hascreated imperatives for increasing scrutiny and rapid response to • Monitoring account usage to proactively fit customers into thechanges in customer behavior. For most companies, these demands most appropriate product and service bundlereach across the enterprise, creating a need for robust, intelligently • Triggering execution of one-to-one or “right-time” campaignsdesigned, and cost-effective solutions which can be implemented • Reporting upon the deeper, more meaningful information thatquickly and used without significant IT “overhead” cost. lies hidden in your enterprise’s transaction streamsUnica’s event-Based Marketing Capability enablesBehavior-Based action eVeNt-BaSeD MarKetiNG: iSSUeS aND ChaLLeNGeSUnica Detect for Event-Based Marketing empowers your firm to The goal of responsive—or even better, anticipatory—action isturn the vast amounts of information it has captured in the form of shared by many financial services firms today. However, evendaily financial transactions—ie. disbursements, deposits, trades cutting-edge providers are finding significant technical challenges asand purchases—into customer behavior insights. “Awareness” of they attempt to make this objective into a reality.these behaviors can then be used to generate responsive actions Making Sense of Data Originating from a Myriad of Sourcesthat are specific and highly relevant to your customers—and to your Your customers interact with your firm through a multitude oforganization’s business goals. Unica Detect is fast, open, easy to systems, and these systems were typically not designed to interactuse, and has vital applications in many domains, including attrite risk with each other. (This heterogeneity of systems can develop overidentification, cross-sell, customer text and email alerts, fraud detec- time, through acquisitions, or through organic growth, but fewtion, and web and call center interaction monitoring.Unica Corporation | www.unica.com 1
  2. 2. companies are spared from the problem of “technology-diversity.”) a multitude of non-business rules to control basic functions andIt’s very likely both you and your competitors are faced with making to prevent malfunctions. And since an expert system is really justthese diverse systems and data work together so that you can a software library, it will require extensive IT expenditure to openformulate a whole picture of your customer and respond in a coher- your code and integrate the library into your environment. Thisent way. Two common approaches for addressing this problem are: may require rethinking your entire architectural framework. • Neural Network. In order to build a system that quickly detects • enterprise application integration: In this approach, you tie patterns within your volumes of transactional data, you might your applications together using something like Web Services consider a neural network. This technology has the drawback of or Enterprise Java Beans. This involves intricate planning and being the ultimate black box—it either gives an answer (without complex programming with the possibility of skewing the end result towards the desired outcome. Future changes can also be explanation) or it does not—which can be frustrating to market- time consuming and expensive. ing users who want to be reassured that the customer indica- tions are accurate, reliable, and reproducible. A neural network • Data Warehouse: In this approach you build a single repository for all your corporate data with the goal of creating a consistent can also be intolerant of the addition of new input feeds, thus data environment for all your enterprise applications. The ware- failing to meet your requirement that the system be able to adapt house is invaluable for storing data, but there may be, because to a constantly evolving data environment. of its size and structure, limits to the speed with which your • Data Mining. In order to take advantage of your data ware- various applications can mine and make timely use of this data. house, you might consider data mining. Data mining is usefulWith either approach, there is the constant demand to keep your for the discovery of new behaviors, but it has limitations whenframework current with new sources of data and new destinations used for the real-time detection of the patterns underlying thosefor its output. The ongoing challenge of these integration efforts is to behaviors. Data mining often works upon data that has beenkeep pace with the rapid evolution of your customer-facing business removed from its transactional business structure, and it typicallystrategies. What is required is a flexible mechanism for intuitively requires experts to translate marketing requirements into results.manipulating and acting on your integrated information. Operationally, data mining is almost always an off-line activity, so it is not able to deliver a quick turn-around of results.Choosing the right technology“Action-enabling software”—which detects customer events as they Unica Detect extends the rules-based, expert system approachhappen and triggers actions that are on-target for your business— with a unique “state-engine” paradigm which facilitates exceed-creates some unique requirements. If the system is to be adopted ingly efficient provisioning of transactional data, indexed to a singleand used by your marketing group, it must be intuitive and relatively subject (generally, an individual household, customer or account)easy to navigate and control. Since the system will have to manipu- and allows the rules to be developed and executed to use time andlate the vast amount of transactional (e.g., DDA, loan, card and time-bounded aggregates, as variables. Our solution can also treattrading; on-line activity and call center) data that arrives each day— patterns as “ranges,” which reflect typical behavior (or, outside ofand do so in very small processing windows, it must also be power- the ranges, atypical behavior) in regards to the individual subjectful. Since you already have made a huge investment in technology and the specific variables being analyzed. Maintaining the custom-that executes all of its specific assignments, the new component ers’ “state” eliminates significant data bottlenecks, and significantlymust also be non-intrusive and non-replicative. And most important- expands the logical flexibility of the solution, without surrenderingly, because you will rely on this solution to “feel the pulse” of your simplicity of control for users. The result is a flexible, fast capabilitycustomers, and provide or execute recommended response-actions, that allows you to optimally leverage your transactional data assets.it must be fast and accurate with transparent business rules.In evaluating the current state of the art, you might consider any of the UNiCa eVeNt-BaSeD MarKetiNG PLatFOrM:the following technical alternatives: UNiCa DeteCt Unica Detect is a powerful Event-Based Marketing (EBM) Platform. • rules-Based “expert” System. In order to build a system This power is easily harnessed through its rules-based user inter- that is flexible and meets the needs of the marketing users, face, which allows the user to define sophisticated patterns of you might evaluate a commercial expert system as a technical foundation. But while promising a methodology for building pre- activity in an incoming stream of transactions. Each pattern can be determined (declarative) business rules, expert systems require configured to fire appropriate triggers to systems external to DetectUnica Corporation | www.unica.com 2
  3. 3. to achieve the desired event-driven functionality. The rules are the CritiCaL DiMeNSiONS OF eVeNt-BaSeD MarKetiNGcapable of capturing and responding to rich and complex behavior The three key aspects of an Event-Based Marketing platform arepatterns, yet they are easily created by aggregating simple subcom- speed, openness, and ease of use.ponents into the desired detection patterns. SpeedThis event and pattern detection process can be applied in a wide Unica Detect is fast because:variety of situations ranging from the triggering of cross-sell op-portunities and attrite risks to fraud detection and customer alerts. • It is highly efficient in how it analyzes the incoming transactionUnica Detect’s unique strengths lie in: data: it never analyzes the same transaction twice. • It only retains information about the customer that is relevant to the existing rule set; hence, the product is efficient in maintaining state across sessions. (An explanation of the significant benefits realized from this capability appears below.) Unica Detect is engineered to solve two performance related problems: • restoration of rule state: Detect saves state within the rules, and it saves that state in such a way that it can be quickly restored when a customer returns to interact with the enterprise. This creates huge performance benefits when compared to a system that must continually reprocess old information when new information arrives. One may consider it in this way: a system that continually reprocesses its knowledge store gets slower as it accumulates more information, whereas Detect shows no such decline. The Engine holds various pieces of information such as history, profile information, and product information within a database and retrieves that information as efficiently as possible. Its real innovations, however, are within the dimensions of data handling, not database retrieval. • Manageability: Because Detect saves transactional information in a way that is relevant to the rules using this information, it does not need to generate additional information about already• Its ability to rapidly detect complex patterns in customer consumed data. In traditional rules-based systems or any transaction streams system that holds all relevant information within a database,• Its ability to rapidly detect complex trend and pattern restraint mechanisms need to be put in place to prevent the aberrations in customer transactional data over time system from continually reproducing the same conclusions.• The ease with which it can be configured for any type of trans- Open architecture approach actional input, and also for any type of existing product package The current emphasis on systems that are built upon a multi-tiered and customer profile data architecture has shifted the focus away from data-centric applica-• Its intuitive browser-based interfaces that allow the business tions and toward applications that exhibit a flexible and adaptable user to easily create and modify the rules which control the business purpose, thus allowing organizations to preserve their Engine’s detection and response behavior investments (time, money, and knowledge) resident in existing tech- nologies. The emergence of XML as a standards-based vehicle forThe following sections provide a more in-depth introduction to these sharing data within the enterprise and beyond is a significant indica-and other distinctive features of the product. tion that current architectures require a broad and open approach to data usage.Unica Corporation | www.unica.com 3
  4. 4. Consistent with this open approach, Detect makes minimal assump- reasons-to-call for your bankers, brokers, sales and service staff,tions about the nature of the data that it uses. Through the use of you’ll drive a greater volume of high quality leads, and establish aintuitive graphical interfaces which allow the user to map raw post- proactive dialogue with your customers. The improvement you gaining data to a business-centric vocabulary, Detect can be configured in the quality, responsiveness, and relevancy of dialogue with yourto simultaneously accept inputs from various databases, flat files, customers is a significant benefit in itself. Upgrading the accuracyopen input streams, and other information sources. and quality of opportunities delivered to your frontlines providesDetect readily accepts external data sources in their native formats: both intrinsic benefits (better quality opportunities), and comple-relational databases, XML feeds, text files, etc. This flexibility mentary improvements: heightened engagement and buy-in at theeliminates the IT overhead required for conformance to a rigid data front-line with your marketing programs. Together these improve-model. The “meanings” of the fields in the external data sources are ments will usually drive better follow-up activity—and success ratesdefined within Detect at installation time. From that point forward, on both retention and selling opportunities will improve as a matterthe content of external data sources appear to users as relevant of course.business objects (“account,” “customer,” etc.) CUStOMer BehaViOr aND triGGer CreatiONease of Use Unica Detect discovers significant behaviors in transaction data asUnica Detect’s unique data-flow architecture naturally partitions the it happens and uses historical information to generate triggers forwork of configuring the system into different stages designed for high-value interactions.different users—users with varying degrees of domain expertise and The activity of building and managing these trigger rules is carrieddecision-making responsibility. out within the graphical rule development environment describedUnica’s ability to refine this relatively broad problem-space into below. The process is simplified by being broken down into a seriesmanageable components has produced a system that can be of discrete steps that involve first characterizing customer behaviorconfigured, modified, and monitored with minimal intervention of and then transforming it into business-significant actions.IT personnel. To a significant degree, the solution can be used and The customer behavior identified by Detect consists of business-controlled by a marketing analyst who wishes to implement revenue- relevant activity that can be inferred from the current and historicalgenerating processes and programs. calling habits and known characteristics. Customer behaviorAll Detect user interfaces are browser-based and provide remote- consists of events, patterns, and attributes.update capability to all users. The user interfaces are easily custom-ized to reflect the structure of a specific business domain, e.g.,deposits, loan, credit card or web channel. End-users can graphi-cally select from intuitive transaction types, data attributes andvalues to construct rules using a vocabulary of expressions naturallyfamiliar to them.Contrary to the traditional rule-based system that becomes clut-tered with too many rules, Unica’s system is focused expressly onthe business problem being modeled. In other words, rules builtwith Detect are keyed to business content and not on “rule-control”thus preventing misfiring, defining suppressions, and the like. This • Events are occurrences within a transaction stream, such as agreatly reduces the number of rules required and makes the installed card purchase, a paid check, a log-on, or an equity trade. Ansystem more manageable. event meets a set of predetermined conditions relevant to youraccuracy and effectiveness customer’s behavior.The combined effect of Detect’s unique approach to pattern detec- • Patterns are business-relevant groupings of current and histori-tion, its flexibility and speed, along with its ease-of-use, is much cal events that contribute to a characterization of customergreater accuracy for detection of circumstances relevant to your behavior. They include not only what a customer has done,business and to your customers. Whether you’re using the solution but what he or she may not have done. Complex patterns mayto generate text messages directly to your customers, or to provide include in their input simpler patterns that are already defined.Unica Corporation | www.unica.com 4
  5. 5. • Attributes are collections of ascribed customer characteristics • Ramp-up new rules to allow them to enter the system with gathered and derived from existing data sources, such as a pre-existing state information customer profile database. An attribute is an aspect of customer behavior which serves to qualify transactions. Within the prototyping environment, the user has full control over the set of triggers, test data, target environment (test/production), andDetect highlights significant changes in customer behavior and the actual results. The user can change any of these elements, rerunsends action triggers to external customer management systems, the system, and compare the varying outcomes. As a result, thewhich perform the relevant actions, e.g., the creation of a lead or an test environment can be used to test various “what if” scenarios onemail, appropriate to the trigger type. a predefined targeted population. The outcomes of these “what if”Every aspect of the creation of triggers is supported through the scenarios can be analyzed and compared using Detect’s built-in re-configuration environment, which presents an organized way for porting capabilities to determine which strategy to use in production.using lower-level rules as building blocks for higher-level activities. Downstream Manipulation of triggered actionsThe program’s organizational facilities allow a rule creator to restrict Actions that are triggered by Detect move to a dispatching compo-use of specific “building blocks” to rules that meet specific criteria nent where they can be targeted to a variety of downstream sys-(such as campaign-type, priority, rule author, rule start date, etc.) tems. The current destinations supported include databases, files,Detect offers a variety of other features that make the activities of email, or messages to a downstream process.rule creation, maintenance, and reuse much easier. Specific to the Targeting of actions is done in the action editor, which supports ei-activity of rule identification and reuse, a multitude of structured ther static or dynamic routing. Dynamic routing entails using triggermethods are provided to tag rules and then selectively access them attributes in conjunction with real-time parameters and a history ofusing flexible criteria. For example, a rule creator is able to indicate a past firings to dispatch actions to multiple channels with great flex-rule’s intention (detect cross-sell opportunities, asset retention risk, ibility. Some of the capabilities enabled by dynamic action routingetc.) and then utilize that information both to access that rule when include:using it as a building block and its performance when doing reporting. • Suppression of action triggering based upon the history of pasttrigger Libraries triggeringTo assist you in developing your trigger processes quickly, Unica • Prioritization of action triggering based upon the entire set ofalso provides a variety of prepackaged trigger libraries for specific actions that have triggeredindustry verticals and processes. Our libraries for financial ser- • Delay of triggering based upon geographic areavices, like our libraries for telecommunications, reflect the commonterminology and use-cases for the industry. Of course the library is Taken together, these capabilities provide the means of managingflexible and can be modified and augmented as you implement the all interactions with the customer to avoid needlessly replicatedsolution to reflect your firm’s specific processes and procedures. notifications across different channels, or excessive contacts result- ing from different pattern activities that are detected closely in time.eFFeCtiVe USe OF eVeNt-BaSeD MarKetiNG envisioning Your resultsMaximizing the effectiveness of Your trigger rules Unica Detect includes a comprehensive package of reports providingOnce the triggers have been created, Unica provides a prototyping value to all areas of your organization. Using a browser-basedenvironment that enables the user to cycle through the process of reports interface, users can customize queries with any one or all ofbuilding, testing, and modifying trigger rules. The prototyping a number of available filters, delivering a high degree of flexibility forenvironment offers the ability to: report results in any one of the following areas: • Create and modify trigger rule sets • Measures of Effectiveness provide a means for management to • Run sample data through the trigger rule set determine effectiveness of specific triggers and their potential • Verify the results of running sample data using the reporting impact upon target populations. Used in conjunction with the mechanisms and the output of Detect test environment, these reports can also be used to analyze the • Restore Detect to a certain past state with the intention of feasibility of new test strategies. Equally important is the ability rerunning sample data of these reports to identify which customers or target populationsUnica Corporation | www.unica.com 5
  6. 6. have not yet generated triggers, sometimes signaling faulty rule definition, an overly ambitious campaign, or sluggish target population.• Transactional Verification provides a means for operations personnel to verify that engine processing has occurred. Because these reports include transaction volume, processing start and stop times, along with overall processing performance, this information is also useful in developing peak and off-peak metrics and may be used in performance planning and optimization.• System Verification provides a means to monitor rule manage- ment activity, such as when rules were created, changed, or deleted for active processing use. This information is useful for tracking rule author, rule intent, and rule applicability at any given point in time.aBOUt UNiCaUnica Corporation (NASDAQ: UNCA) is the recognized leader inmarketing software solutions. Unica’s advanced set of enterprisemarketing management and on-demand marketing solutionsempowers organizations and individuals to turn their passion formarketing into valuable customer relationships and more profit-able, timely, and measurable business outcomes. These solutionsintegrate and streamline all aspects of online and offline marketing.Unica’s unique interactive marketing approach incorporates cus-tomer analytics and web analytics, centralized decisioning, cross-channel execution, and integrated marketing operations. More than1,000 organizations worldwide depend on Unica for their marketingmanagement solutions.Unica is headquartered in Waltham, Massachusetts with officesaround the globe. For more information, visit www.unica.com. Unica Corporation Worldwide Headquarters Unica is a registered trademark of Unica Corporation with the U.S. Patent and Trade- Reservoir Place North mark Office. The Unica logo and MARKETING 170 Tracer Lane SUCCESS STARTS WITH U are trademarks of Waltham, MA 02451 Unica Corporation. All other trademarks are the USA property of their respective owners. t +1.781.839.8000 WP-EBMFINANCE-1009-PDF F +1.781.890.0012 e unica@unica.com © Unica Corporation, 2007-2009. All rights reserved. www.unica.comUnica Corporation | www.unica.com 6