1. 1. April 22nd, 2015 Portfolio Management & Analytics Services The Value of Data & Analytics Driven Intelligence in Operating Socially Viable Lending Portfolios EEDE 20th Banking Forum
2. 2. Effective Data Capturing
3. 3. -10.6 -7.8 -2 1.4 1.7 2.2 -12 -10 -8 -6 -4 -2 0 2 4 2011 2012 2013 2014 2015 2016 Greece Private Consumption We Capture Data from: 1. The Challenging Greek Macroeconomic Environment -8.9 -6.6 -3.9 01 2.5 3.6 18 25 28 27 25 22 10 12 14 16 18 20 22 24 26 28 30 -10 -8 -6 -4 -2 0 2 4 6 2011 2012 2013 2014 2015 2016 RealGDPGrowth(%) Year Real GDP Growth and Unemployment GDP Unemployment Rate -11.8 -11 -3.9 0.8 2 3.2 -14 -12 -10 -8 -6 -4 -2 0 2 4 2011 2012 2013 2014 2015 2016 Greece Domestic Demand 3Source: http://ec.europa.eu/economy_finance/publications/european_economy/2015/pdf/ee1_en.pdf Signs of growth appear in the 2nd Quarter of 2014 mainly due to an increase in customer spending and tourism income. This is reflected on real GDP growth and Unemployment. Forecast Forecast Forecast Forecasts illustrated in these graphs are challenged as domestic demand and private consumption are immobilized until agreement with its partner institutions is reached.
4. 4. 39% 12% 45% 04% 00% 10% 20% 30% 40% 50% Decreased Increased Remained the same N/A Investments in H2 2014 We Capture Data from: 2. The Volatile Corporate Environment 4 59% 08% 33% 00% 00% 10% 20% 30% 40% 50% 60% 70% Reduced Improved Remained unchanged N/A Financials in 2014 24% 37% 31% 08% 00% 05% 10% 15% 20% 25% 30% 35% 40% Profitable Losses Stable N/A Companies Balance sheets in 2014 53% 19% 28% 00% 00% 10% 20% 30% 40% 50% 60% Decreased Increased Remained the same N/A Turnover in H2 2014 55% 19% 25% 00% 00% 10% 20% 30% 40% 50% 60% Decreased Increased Remained the same N/A Demand in H2 2014 Source: http://www.imegsevee.gr/images/ereunes/febr_2015/parousiasi_ereuna_febr_2015.pdf 37% of Companies had losses in 2014. More than 60% had significant reductions in their Financials. Over 50% of Companies saw a negative impact in their Turnover and Demand in 2014. Around 39% had decreased their investments.
5. 5. We Capture Data from: 3. The Shocked Household Environment 5 0.90% 02% 22% 31% 44% 00% Family income changes compared to 2013, how much has your total family income been decreased? Significantly increased Not Significantly increased Remained the same Not significantly decreased Significanty decreased N/A 55.50% 03% 42% 00% 50.30% 03% 47% 00% 0% 10% 20% 30% 40% 50% 60% Even with difficulties has been enough to cover main obligations Managed to save a certain amount It wasn't enough and more money was necessary N/A PERCEPTION IN REGARDS TO HOUSEHOLD INCOME - 2013 & 2014 2013 2014 65% 31% 19% 10% 05% 70% 33% 25% 13% 06% 0% 10% 20% 30% 40% 50% 60% 70% 80% I used money out of savings I borrowed from relatives/friends I used credit cards I liquidised / sold part of private property I addressed myself to pawnshop PAYMENT METHOD TO COVER OBLIGATIONS - 2013 AND 2014 2013 2014 64.30% 61% 48% 24% 23% 02% 0% 10% 20% 30% 40% 50% 60% 70% Tax obligations Fixed household needs/ maintenance expenditure Loan payments Social security contributions Credit Cards Other REASON OF ARREARS 2014 2014 Source: http://www.gsevee.gr/meletes-2/484-eisodima-dekembrios2014# 75% of households saw their income decrease
6. 6. 8.7 5.7 2.1 Greek Banks: Forborne Loans in bn Business Mortgage Consumer 47 20 13 64 27 15 0 10 20 30 40 50 60 70 Business Mortgage Consumer Inbn Greek Banks: +90dpd and Total Non Performing Exposures (NPEs) +90dpd Total NPEs We Capture Data from: 4. The Daily Banking Transactions 6Source: Piraeus Bank, Alpha Bank, Eurobank, National Bank of Greece 126 128 129 130 124 160 157 156 155 156 42 62 82 102 122 142 162 182 121 122 123 124 125 126 127 128 129 130 4Q13 1Q14 2Q14 3Q14 4Q14 Loans(inbillions) Deposits(inbillions) Greece Deposits and Loans Evolution Deposits Loans In 4Q14, there is a significant drop of Deposits 90 billion in 4Q14 are more than 90 dpds 16.5 billion in 4Q14 are Forborne Loans
7. 7. The Analytics Intelligence Value
8. 8. Advance Analytics Promote Business Decision Making 8 Simulation Modeling Multivariate Regression & Segmentation Modeling Data Analysis & Dashboard Reporting Predict What will be my customers/ portfolio value if I switch strategies? Forecast What parameters affect my Customer/ portfolio performance Today? What is likely to be my Future customer/ portfolio Performance? Understand What is my customer/ portfolio value? How does my customer/ portfolio perform? What is its best performing aspect? Why does my customer/ portfolio perform in this way? HIGH LOW Complexity Return on Investment What is the most effective action to maximize gains? What might And it is likely to happen Monitor what is currently happening Understand the business problem Investigate the reason of past performance
9. 9. Data Driven Analytics Fuel change in Portfolio Management 9
10. 10. 10 We Secure Socially Viable Offerings 06% 01% 02% 02% 07% 06% 05% 04% 68% 0% 10% 20% 30% 40% 50% 60% 70% 80% 0% 10% 20% 30% 40% 50% 60% 70% 0 dpds 1 - 29 dpds 30 - 59 dpds 60 - 89 dpds 90 - 119 dpds 120 - 149 dpds 150 - 179 dpds 180 - 209 dpds 210+ dpds ExpectedLossas%oftotal OutstandingBalanceas%ofTotal Distribution of Outstanding Balance and Expected Loss by Delinquency Days for a Retail Book % to total Out. Balance % of Total EL Restructuring effort Profitability Marketing Promotions must incentivize and reward customers Recoveries must not lose customers Typical Banks Retail Portfolio Delinquency Profile must help customers Profitable: Reward, Up Sale and Refinance Forgotten: Improve offering Not take ups : Skip from Offering Somehow Paying: Encourage payments, Reward, Allow customized offerings Willing but Unable: Allow customized seasonal or sector related offering Unwilling - Strategic Defaulters: accelerate actions let go Delinquent CustomersPerforming & very Early Delinquent Customers
11. 11. 11 Advanced Analytics Experts and Machines Work Together: his is Qualcos Philosophy Augmented Intelligence
12. 12. Our Augmented Intelligence Offering in Banking Operations 12 ADVANCED ANALYTICS METODOLOGIES, UTILISING CUSTOMERS PAST CREDIT BEHAVIOR AND WILLINGNESS OF PAYMENT PREDICT FUTURE CUSTOMER BEHAVIORS Advanced Prediction Tools Dynamic Operational Segments ANALYTICS DRIVEN SEGMENTATION TOOLS ALLOW FOR EFFECTIVE TARGETING AND OPTIMISED OUTCOMES. Tailor Made Solutions APPLY THE APPROPRIATE SOLUTION TO EACH CUSTOMER SEGMENT BY OPTIMISING PORTFOLIO MANAGEMENT OPERATIONAL MODELS THAT TAKE INTO ACCOUNT INDIVIDUAL CUSTOMER NEEDS. Real Time Monitoring and Recalibration ASSESS AND ANALYSE PORTFOLIO PERFORMANCE TO MAKE THE NECESSARY ADJUSTMENTS AND CORRECTIONS THAT WILL FURTHER IMPROVE RESULTS.