customer insight presentation s houston - boston march 2014

Unlock Customer Insights to drive business growth Stuart Houston Global Solution Director Financial Services Analytics Oracle FS Global Business Unit

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 2

“In this age of the customer, the only sustainable competitive advantage is knowledge of and engagement with customers.”!

Age of the Customer

Source: Competitive Strategy in the Age of the Customer, Josh Bernoff- Forrester, 2012

Only 28% of companies earned a "good" or "excellent" customer experience rating.

"Excellence isn't an accident. It happens from continuous, purposeful focus.”

Source: Tempkin Group, Q1, 2012 enchmark Survey


Originations

TxnID ProductID Product Amount

12324 506 5/1 ARM $413,399 12325 507 30 yr Fixed $513,699

BI Star Schemas!Metrics: Margin = Sales - Cost, …!Dimensions: Customer, Product, …!

“”Owns investment properties….high spend in Consumer Electronics “

Websites & Financial Data Providers!Chaseonline.com, D&B, Acxiom, etc.!

“Laid off again…please pass my resume to your contacts…”

Social Media!Customer Comments!

Enterprise Applications!Branch, Call Center, CRM, Etc!

“Why did my escrow payment increase…” “Waiting on paycheck from new job…”

Origination paperwork, emails, Credit Reports, Correspondence…..

Enterprise Content System MS Office Documents, Internal Notes!

Behavioral analysis? Customer life events? Broader financial picture of

customer? Match profiles to successful previous experiences?”

Servicing TxnID Loan CustID Date Fund Price 506 2543 1233 10/3 P & Int $4,340

507 2543 1233 09/4 Escrow $958

What new, innovative ways can I segment my customers?


Increase Revenue and Profitability

•  Improve Cross-Sell and Up-Sell Opportunities

•  Customer Churn Prevention

•  Improve Operational Efficiency and Reduce IT Cost

Expand Product Portfolio

•  New Product Development based on social landscape and trends

•  Targeted Campaign and Product Recommendation

Enhance Customer Experience

•  Customer Intimacy with Holistic and Historic View of Each Customer

•  Customer Satisfaction & Survey Management

•  Effective, Accurate, and Timely Fraud Detection

Photos courtesy of Google Images

Business Strategies and Use Cases for Customer Insight


OFSAA Benefits Background & Customer Needs Oracle Solutions

  Goal to achieve a unified view of the customer across LoBs

  Consistent view of account profitability

  Consistent view of Customer Profitability across all relationships with the bank

  Monitor Relationship Officer performance incl. Cross-sell without double-counting revenues across LoBs

  Single view of Customer and Relationship Officer P&L

  Accurate aggregations across Customer, Product, RO and Org, eliminating all double counts

  Ability to disproportionately allocate revenue across ROs

  Pre-packaged reports delivered weekly; exhaustive dashboards for extended analysis and on-demand report creation

  Ability to manage adjustments

  Institutional Performance Analytics

  Reconciliation Framework   Analytical Applications

Infrastructure (Forms and Rules Framework)

Business Strategies and Use Cases for Customer Analytics Client Example for Corporate Customer Insight


OFSAA Benefits Background & Customer Needs Oracle Solutions

  Goal to achieve a unified view of the customer across LoBs

  Consistent view of account profitability

  Consistent view of Customer Profitability across all relationships with the bank

  Risk-adjusted performance metrics

  Need to calculate Customer Lifetime Value

  Account and Customer P&L (Actual & Forecast)

  Identify most profitable customers (incl. within a channel)

  Customer Segment Profitability   Relationship Officer Performance

  Exhaustive dashboards for extended analysis and on-demand report creation

  Ability to analyze in detail all the P&L drivers

  Retail Performance Analytics   Reconciliation Framework

  Analytical Applications Infrastructure

Business Strategies and Use Cases for Customer Analytics Client Example for Retail Customer Insight


Performance

Key Capabilities

Propensity Models: Pre-built product and channel propensity of customers Score lists to identify optimal segments/ customers for treatment and track ROI Predictive Models: Cross-sell, Up-sell scores, Likelihood of purchase, Customer Lifetime Value etc

Marketing Effectiveness: Campaign profitability & response tracking against plan and by key dimensions

Engagement Analysis: Wallet-Share, Spend diversity, product cross-holding, Attrition Analysis etc Channel Effectiveness: Over/under performing Branches, Marketing ROI, response analysis across channels

Key Capabilities

Risk Summary: Customer distribution across Credit and Delinquency bands and related exposures

Expense Analysis across Customer Segments, Products, Channels to understand ROI

Revenue breakdown by reporting lines like Interest, Interchange, Fee Income etc; top performing segments and products across reporting lines

LOB specific Analysis including customer distribution across age, income, profitability deciles, balance maturity

Managing the Customer Lifecycle


“The industry is taking a hard look at profitability and performance. The spotlight is on developing new products and revenue sources, and organizations will require carefully crafted business strategies to address the effects of regulatory reform, technology change, competitive dynamics and market movements..” – “Deloitte Bank & Securities Industry 2011

“There is no doubt that our reporting is getting more sophisticated, but the trick in reporting on all these things is to make it simple. The tendency is to give more data, but the best decisions tend to be made from simple clear data.” – CFO, Large Australian Bank

From Data to Information


of the information you need is unstructured

What data do I need to consider?


Use Case 1 – The Risk Adjusted Performance Challenge

Risk Band / Profit Band

High Risk Medium Risk Low Risk Grand Total

High Profit 309 521 385 1215

Medium Profit 448 231 121 800

Low Profit 115 85 842 1042

Grand Total 872 837 1348 3057

Heat Map : Risk & Return

1  An accurate portrayal of risk should impact the recommendation engine 2  How can we improve risk profile of high profit customers? 3  How can we improve profitability of low risk customers?


Use Case 2 – Aligning to Life Stages in Customer Engagement

Tech Savvy

Bu

sine

ss

Ow

ne

rs Eth

nic

The segments are not as simple as they used to be …


Use Case 3 – Propensity Modeling

The holy grail is to fine tune the customer experience to be relevant and of interest to the customer base


Use Case 4 – Accurate Corporate Client Profiles

1.  Many challenges – is the full corporate entity represented accurately? Subsidiaries? JV’s? …

2.  Clear representation of important trends, driving detailed analysis

3.  Alignment with enterprise strategy?

4.  Alignment with Incentives?


What data do I need and where do I get it from?

How do I make sure all my system data is

consistent?

Why do I have to wait until the end of the month to get my

reports?

Great analysis … now how do I use it to impact

my customer’s experience?

How can I measure the results of using my new insights?

Barriers to the delivery of great customer insight …


Faster Time to Produce Insights

Cost Effective with a quick ROI

Enterprise-Scale Performance at Extreme Volume

00:00 00:01 00:02

15 Copyright © 2014, Oracle and/or its affiliates. All rights reserved.

Considerations for delivering effective customer insight


Collect Real Time Web Log

Entries

Acquire Organize Analyze Decide Source

Customer & Transaction

Records from Core Systems

For Identified customers, track credit decisioning, non-financial activity, social activity, …

Explore current Customer Information

Batch Archiving of Web

Log Entries

Products of Interest

Summarize Customer

related Information for Analytics

Historical metrics

Monitor and track Identified metrics of interest

Customer Monitoring

Recommend Action

Data Transformation

Track Life Events

Identify Statistical Outliers

Alert Anomalies

Interact with Customer

through any channel at any time

•  Servicing •  Sales •  Marketing

Information Architecture necessary to deliver the promise


NoSQL Database

Acquire Organize Analyze Decide Source

Customer Records

from Various Silos

For Identified customers, track bank web pages visited

OFSAA Financial Services

Data Foundation

OFSAA Customer Analytics OFSAA

Customer Insight

Modeling Decisioning

Oracle Endeca

Information Discovery

Connectivity

Oracle Rightnow

Social Media Monitoring

Channels

Customer Relationship Management

Core Processing

Systems

Hadoop

What data do I need, where do I

get it from?

How do I ensure consistency of information?

I need my data to be timely (at

least daily!)

How do I positively impact

customer experience?

How do I measure success of customer

engagement strategies?

Oracle provides a complete solution for Customer Analytics


Oracle Financial Services Customer Insight

Key Applications

Retail Performance Analytics Profitability Analysis across key dimensions like Customer Segment, Product, Org, Geography, etc.

Channel Analytics Customer Interaction analysis through self-service & assisted channels

Retail Customer Analytics Customer behavior analysis to enhance engagement with the Bank

Institutional Performance Analytics Profitability across key dimensions like Product, Industry. A 360o view of a corporate customer

customer insight presentation s houston - boston march 2014

Documents

customer segments

customer source

customer distribution

customer insights

customer comments

retail customer insight

corporate customer insight

customer life events