CXO Accent

Stanchart gets itself an edge

Analysing customer data and using it intelligently is possible only through an effective business intelligence solution

Sedjwick John Joseph

When your customers grow almost three-fold over three years in a fiercely competitive market, what do you do to sustain and grow your market share? This was the challenge that Standard Chartered Bank (SCB) faced. We are among the largest international banking groups in India, with over 2.2 million retail customers. Our products and services include cash management, custody, lending, foreign exchange, interest rate management, credit cards, personal loans, mortgages, deposit-taking activity and wealth management services.

Customer analytics

At the scale on which we operate, we have to keep track of growing data volumes and extract intelligence from them. To effectively formulate customer-related strategies, we decided to introduce a Business Intelligence (BI) unit, which is presently based at Bangalore with a staff of 25 people. They take responsibility for fulfilling the information requirements of all departments across the bank. We use the SAS-Business Intelligence solution for its customer-service functionality.

Information needs

Prior to the BI exercise, the bank relied on online transaction processing systems (OLTP) which helped answer queries from a financial standpoint. The system typically generated reports at a broad portfolio level, bringing out the total earnings, debt situation, interest income, cost, fee income and profits thereof. We soon realised that we needed a system that would also provide ready customer analysis along with the huge volumes of data captured by its OLTP systems. The basic requirement was clearly for a data warehouse and analytical solution to enable fact-based decision-making in areas ranging from acquisitions and risk management to cross-selling and portfolio management.

We evaluated a number of players including Brio, Cognos and Business Objects, but felt that SAS solutions could meet our requirements perfectly. Today, we have deployed a suite of SAS products that reside on an RS/6000 machine with AIX as the operating system. The solution 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 BI unit, and disseminated, via our intranet, to all the information consumers across the bank; these include sales managers, finance resources, credit resources, product heads and managers, and the head of consumer banking.

Benefits of the system

SAS solutions form a central part of the bank’s customer relationship management (CRM) strategy. Today, it is easier for us to run targeted campaigns and elicit substantially higher returns since we do profit modelling for each account, which enables micro-segmentation. Using analytics, we get a clear idea about the likelihood of customers taking a new product. For instance, we know which of our card members are more likely to take an auto loan; this results in more focussed marketing campaigns and reduced costs with improved customer satisfaction.

Our marketing is now empowered with information to increase cross-selling and target our most valuable customers. Additionally, using the BI solution, we were able to successfully launch Diva, which is a specially-designed women’s international credit card targeted at Indian women. On doing an in-depth analysis of our customer data, we realised that a significant proportion of our business came from the upwardly mobile Indian woman, and was likely to grow substantially too. The solution gave us the essential market knowledge that is a pre-requisite before any launch. Similarly, we also launched aXcess plus, which is a savings account that enables a customer to access cash at over 1,800 ATMs. This strategy was validated and facilitated by the information provided to us by the BI unit.

Customer acquisition is very critical. However, something that we or any other bank today cannot ignore is the risk/reward equation. To arrive at one is a complex and challenging task that all bankers have to accomplish. It means applying a variety of scoring techniques across product lines to arrive at the probable risk associated with each product sale, be it a credit card, auto loan or personal loan, and then providing for the same. At SCB, the SAS solution is used for scoring virtually all our products. Customer profiles and information about segments form the backbone of our product strategy. It allows us to tailor our products across a diversified consumer base, enabling us to spread the risk across a much wider spectrum.

In addition, the BI solution is used to carry out simulations of situations that might impact the bank. It also balances the bank’s exposure across portfolios. One of the key components that is required of a solution of this nature is scalability, which is extremely critical as our volumes of data keep increasing on an ongoing basis. The solution has the capability to handle different data sizes, and bringing out analyses based on advanced statistical techniques.

Going forward, Standard Chartered plans to adopt SAS’ data mining technologies for various predictive modelling and advanced scoring initiatives to strengthen its risk management framework in the area of retail lending. If used strategically, information today can go a long way in enhancing an organisation’s customer-related initiatives.

(As told to Chitra Padmanabhan)