data driven insight: the power of business analytics

Copyright © 2012, SAS Institute Inc. All rights reserved. 1

Copyright © 2011, SAS Institute Inc. All rights reserved.

Data-Driven Insight: The Power of Business AnalyticsDavid M. WallaceGlobal Financial Services Marketing ManagerSAS

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Agenda

Introduction: The Economy and Credit Unions

The Case for Business Analytics

Succeeding with Business Analytics

Getting Started with Business Analytics

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The Economy: Where Are We Heading?

2.3%

2.0%

Source: The Wall Street Journal, Economic Forecasting Survey, June 2012. n = 53


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The Economy: Where Are We Heading?

.85%

7.9%

Source: The Wall Street Journal, Economic Forecasting Survey, June 2012. n = 53

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Credit Unions: Where Are We Now?

Source: Callahan & Associates, 1st Quarter Trendwatch, May 2012 1 Regular shares up 11.9%; share drafts up 16.2% YTD 2012 vs. 2011

Q1 Loan Originations Up 24.7% to $72.5BCredit Unions First Mortgage Market Share 3rd at 8.2%Core Deposits Growing at Double Digit Pace 1

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Credit Union Challenges

Regulatory requirements

Risk management and fraud prevention

Changing member preferences

Financially stressed member base

Consistency of member experience

Improving operational efficiency

Source: Nicole Sturgill, CEB TowerGroup, May 2012


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Member Experience is Priority One

Source: Forrester Research, The Customer Experience Index, 2012, January 2012

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Measuring Member Experience

Source: Forrester Research, The Customer Experience Index, 2012, January 2012

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Forrester Customer Satisfaction Index –Good News for Credit Unions!

77

77

77

77

77

80

83

83

84

89

70 75 80 85 90

Fifth Third Bank

Discover

BB&T

ING Direct

Morgan Stanley Smith Barney

Any other regional or local bank

USAA (insurance provider)

Any other credit union*

USAA (credit card provider)

USAA (bank)

CXi Score

Source: Forrester Research, The Customer Experience Index, 2012, January 2012* No specific credit unions were identified in survey


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The Case for Business Analytics

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“…the broad use of data and quantitative analysis for decision-making within organizations. It encompasses query and reporting, but aspires to greater levels of mathematical sophistication. It includes analytics, of course, but involves harnessing them to meet defined business objectives. Business analytics empowers people in the organization to make better decisions, improve processes and achieve desired outcomes. It brings together the best of data management, analytic methods, and the presentation of results—all in a closed-loop cycle for continuous learning and improvement.”

Defining Business Analytics

Source: Thomas H. Davenport, The New World of Business Analytics, March, 2010

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“Business analytics is, simply put, the application of analytical techniques to resolve business issues. It provides organizations with a framework for decision making, helping organizations solve complex business problems, improve performance, drive sustainable growth through innovation, anticipate and plan for change while managing and balancing risk.”

“If you break it down it’s all about enabling effective decision making.”

What Exactly is Business Analyticsand How Can It Help?

Source: Jim Davis, Business analytics: helping you put an informed foot forward, April, 2010


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5 Stages of Analytical Maturity

Source: Thomas H. Davenport, Competing on Analytics

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Business Analytics vs. Business Intelligence

Business Intelligence

Business Analytics

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Business Analytics

What will happen next?

What happened?


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Business Analytics

Reactive Decision Making

Proactive Decision Making

What will happen next?

What happened?

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Companies are looking to business analyticsto help solve big issues

Source: Bloomberg Business Week, The Current State of Business Analytics: Where Do We Go From Here? August 2011. n = 930.

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Which of the following would you consider to be business analytics capabilities/tools?



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Which of the following describes the use of business analytics across your organization?


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Companies are still turning the corner on analytics investments


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Business Analytics Functions and Tools

Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930.

Tools Very Effective Users Other Companies

Spreadsheets 74% 59%

Business reporting/KPIs/dashboards 72% 52%

Forecasting 71% 50%

Query and Analysis 57% 35%

General statistics 53% 37%

Data/Text Mining 50% 36%

Simulations and scenario development 46% 27%

Model management 43% 24%

Optimization 43% 24%

Web analytics 34% 23%

Interactive data visualization 31% 15%

Social media analytics 22% 21%

Text/audio/video analytics 16% 12%

None of the above 1% 2%

Functions Very Effective Users Other Companies

Strategy/Planning 78% 55%

Finance 69% 49%

Marketing 68% 48%

Sales 64% 44%

Information Technology/Management 64% 48%

Operations/Supply Chain Management 60% 41%

Product Development 57% 34%

Customer Service/Support 54% 37%

Human Resources 40% 29%


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Business Analytics Reliance and Effectiveness


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Ready Access to Data and Analytics Tools


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Executive Buy-in and Positive Impact



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Succeeding with Business AnalyticsThe What and the How

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Managing and Integrating Data

What – data from core and operational systems FIS, Fiserv, Harland, Jack Henry, Open Solutions, etc.

The gap Repository needed to assemble/integrate data for BI, reporting

and analytics

How – use pre-built industry data model as repository of key data from core systems Use as integration hub for analytics and reporting

Included data integration/data quality tools for reliable data

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Industry Data Model

SAS Detail Data Store for Banking – Single Version of the Truth

Financial Products

Financial Instruments

Financial Accounts

Banking Accounts

Insurance Accounts

Customer Intelligence

Analytical Models & Scoring

Operational Loss Events

Financial Parties

Financial Reporting

Risk Factors & Model

Assessment

Risk Mitigants

Financial Positions

Risk Factors & Models

Market Data & Quotes


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Integrating Data for Analytics and Reporting

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Executive Dashboard

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Growing Members & Member Relationships

What – need to grow and retain members; grow member relationships

The Gap – which members, what channel(s), gathering non-members

How – evolving to analytically driven marketing More relationships with current members

Reach through multiple channels

Members your advocates through social media

New members


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Evolution of Financial Services Marketing

Responsibilities

TheBrand

The Marketing Campaign

Insights and

Analytics

TheMember

Experience

Integrated, multi-channel in/outbound conversations in real-time

Expectation

Sustain brand health in a rapidly changing virtual world

Expectation

Unearth and dynamically manage insights to drive action

Expectation

Deliver a consistent positive member experience across the credit union

Expectation

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Financial Services Marketing Best Practices

Strategic Segmentation

Analytical and Operational Profiling

Predictive and Analytical Modeling

Member State Changes

Event Triggering

Real-Time Decisioning

Campaign Execution

Collaborative Marketing

Channel Coordination

Coordinate Inbound and Outbound Marketing

Decision Optimization

Marketing Campaign Optimization

Source: BAI Research, The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives, April 2012

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Segmentation: Starting Point for the Member Engagement Strategy

Member Segmentation

Drives

Enables

Initiatives

MemberInsight

Capabilities


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Driving Results Through Segmentation

Who are our targeted member

groups?

What are their key characteristics &

value propositions?

Who are our most valuable member

segments?

Which treatments offers to present

to each segment?Member Strategy

Key Outputs• Differentiate members based on segments• Segment treatment strategies• Marketing optimization (based on resources)

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Refreshing Member Segmentation

Existing MemberSegment 1



Marginalized Middles

Disengaged Skeptics

Struggling Techies

Satisfied Traditionalists

Sophisticated Opportunists

Analytical Segmentation

Member Data Sources

Campaigns, Offers, Interactions

Segment names from: BAI Research, The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives, April 2012.

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Member Insight Analytics


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Improving Member Experience

What – monitor behavior on CU web sites; monitor comments from social media

The gap – internal & external data needs to be integrated to get true picture of member experience

The how – customer experience analytics; social media analytics

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Customer Experience Analytics

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Social Media Key Performance IndicatorsWays to filter data

Hashtag listing (sort by columns)

Top Sites by volume (sort by type)

SAS Proprietary & Confidential

Detailed Sentiment by Type, Source, and Site.

Data is compared against historical trend lines, using statistical rules and predefined business rules to understand if the movement is significant and relevant to the business. Drill to document detail is available throughout this portal.

Historic volume reports with sentiment


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Real Time Twitter AnalysisMultiple tabs for each unique Twitter query

Intra-day volume reports with sentiment

Tweet Report (sort by columns)

Signifies Twitter handle

SAS Proprietary & Confidential

Real Time look into Twitterverse “buzz” around a certain topic

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Analyzing Credit Union Performance

What – bringing data together for KPIs and dashboards; doing advanced analytical analysis

The gap – how to get started?

The how –CU dashboard, office analytics, rapid predictive modeler

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Office Analytics


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Predictive Modeling for Business Analysts

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Credit Union Dashboards

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Getting Started with Business Analytics

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10 Practical Steps for Making Analytics Work

1. Expand the use of business analytics where feasible.

2. Integrate analytics across the organization.

3. Deploy analytics on specific business tasks.

4. Use a variety of analytics tools, including more sophisticated ones.

5. Create a data-management strategy that includes ready access to data.

6. Deploy the necessary analytical technology.

7. Develop formal data-management processes.

8. Secure executive support.

9. Deliver and communicate value.

10. Hire and develop the right analytical talent.



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Establishing a Solid Foundation for Analytics Get executive buy-in

Essential to success

Use a pilot to demonstrate the benefits

Establish an analytics culture Show skeptics how analytics translates to business decisions

Tie analytical outcomes to strategic business issues

Identify your analytical talent Who can pose analytical questions?

Who has the desire to move from “amateur” to “semi-pro”

Tap into the right tools

Source: IT Business Edge, You’re Never Too Small for Business Analytics, September 2011

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4 Keys to Analytical Talent

1. Put talent before technology Maximize analytics tool investments by getting talent in place

first

2. Emphasize “soft” skills in addition to technical skills Critical thinking and problem solving capabilities

“ability to deal with the world through an analytical lens”

3. Invest in ongoing staff development Training existing employees creating a fact-based decision

culture

4. Be creative when looking outside for new talent Go beyond traditional areas (examples: engineering, math)

Partner with local universities; tap provider resourcesSource: Bank Systems & Technology, 4 Keys to Building an Analytical Workforce, February 2012

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What to look for in a business analytics solution Robust visualization

Support for advanced analytics

Prebuilt analytical models and task support

Suited for range of users

Ease of use

Balance of user autonomy and IT control

Modular

Fully integrated

Availability of training and technical support

Low total cost of ownership

Source: IT Business Edge, You’re Never Too Small for Business Analytics, September 2011


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In Summary


Thank You!

[email protected]

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Resources Business analytics: helping you put an informed foot forward (included in Business Analytics Insights). Jim Davis.

Available from SAS*.

The New World of Business Analytics. Thomas H. Davenport. Available from SAS*.

The Current State of Business Analytics: Where Do We Go From Here? Bloomberg Business Week. Available from SAS*.

Making Business Analytics Work: Lessons from Effective Analytics Users. Bloomberg Business Week. Available from SAS*.

The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives. BAI Research. Available from SAS*.

Driving Profitable Growth for Marketers series. Available from SAS*.

Part One – The Thought Leader Perspective

Part Two – The Practitioner Perspective

Part Three – Technologies Available to Marketers

Part Four – Best Practices and Lessons Learned from Marketers

4 Keys to Building an Analytical Workforce. Bank Systems & Technology, February 2012.

Fuel Marketing Effectiveness with Customer Analytics. Available from SAS*.

Getting Your Money’s Worth with Analytics. Available from SAS*.

Redefining Customer Value: Corporate Strategies for the Social Web. Economist Intelligence Unit. Available from SAS*.

Five Ways to Drive More Profitable Marketing. Available from SAS*.

You’re Never Too Small for Business Analytics. IT Business Edge. Available from SAS*.

Big Data Meets Big Data Analytics. Available from SAS*.

Banking on Analytics: How High-Performance Analytics Tackle Big Data Challenges in Banking. Available from SAS*.

The Power of Personalizing the Customer Experience. Available from SAS*.

Analytics 101. Available from SAS*. * Free registration

data driven insight: the power of business analytics

Economy & Finance

sas institute

business analytics2

business issues

business analyticsand

survey9 copyright

bloomberg business week

b credit unions

specific credit unions