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© 2013 IBM Corporation
Using Customer Profitability Analytics to Enhance Financial Performance
Analytics in Banking:
© 2013 IBM Corporation
Q&A Resources Help
© 2013 IBM Corporation
Wednesday 10th April 2013 at 12:00 PM ET
Hosted by: Owen Kimber
Global Financial Services Solution Leader
IBM Business Analytics
Live Demonstration: IBM Customer Profitability Analytics
Learn more and register
© 2013 IBM Corporation
Frank McKeon, Banking and Financial Markets
Industry Executive, IBM Business Analytics
David McNab, Senior Managing Consultant, IBM
Global Services
Farhana Alarakhiya, Director, Industry Solutions,
IBM Business Analytics
Using Customer Profitability Analytics to Enhance Financial Performance
© 2013 IBM Corporation
Higher costs and complexity
Regulation and governance
Increased risk
Scarce capital
Demanding customers: more empowered and less
loyal
The new normal…
© 2013 IBM Corporation
Top performers are more likely to
use an analytic approach over
intuition
Organizations that lead in analytics
outperform those that are just
beginning to adopt analytics 3x3x
5.4x5.4x5.4x
According to a joint study by MIT Sloan and IBM…
Organizations that put analytics into action are more
likely to substantially outperform their competitors
© 2013 IBM Corporation
Checking: $5,000
Money Market: $30,000
Retirement $250,000
Average Credit Card
Balance: $5,000
Mortgage: $250,000
Mary
© 2013 IBM Corporation
Jeremy
Checking: $4,000
Money Market: $28,000
Retirement $175,000
Average Credit Card
Balance: $10,000
Mortgage: $245,000
© 2013 IBM Corporation
Are they really the same?
© 2013 IBM Corporation
Age: 38
Income: $80,000
Lives in Chicago
Married with one child
Assistant Controller
Channel preferences:
web & mobile
Mary
© 2013 IBM Corporation
Jeremy
Age: 36
Income: $80,000
Lives in Boston
Single
Systems Analyst
Channel preferences:
branch, phone
© 2013 IBM Corporation
580 690
© 2013 IBM Corporation
Economic
value Fund Transfer
Pricing
ABC Costing &
Expense
allocations
Risk Based
Capital
Allocation
How do we measure profitability?
© 2013 IBM Corporation
Customer Views
Household
Customer
Account
Hierarchal Views
Business Unit
/ Geography Product Other
1/6/2009
Non-Hierarchal Views
Industry Currency Account
Officer Collateral Date Credit Status
© 2013 IBM Corporation
Implementing Customer Profitability Analytics
© 2013 IBM Corporation
With good foundation, implementation less than one
year
Leading banks adopt a process of continuous
improvement
Implementing customer profitability
analytics
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Executive sponsorship
Vision for using customer profitability information
Quality infrastructure
Critical success factors
© 2013 IBM Corporation
Most banks adopt a monthly cycle
Customer profitability analytics must keep up with
constantly changing business
Repeatable, efficient maintenance process is
mandatory
Remain current
© 2013 IBM Corporation
Produce and manage centrally
Deliver to the point of impact
Make sure the information can be trusted
Package to meet differing needs across the
business
Turning insight into action
© 2013 IBM Corporation
Create value for
business users
#1 factor for building
the business case
© 2013 IBM Corporation
Success at Banco Itaú Argentina
© 2013 IBM Corporation
One of the world’s largest financial institutions
45 million clients
104,000 employees
4900 branches
30,000 ATMs
$360 billion in assets
Banco Itaú Argentina
© 2013 IBM Corporation
Increase customer satisfaction
Maximize profitability
Optimize cross-selling and acquisition strategies
Banco Itaú Argentina
The right offer…for the right client…
at the right time…through the right channel…
and at the correct price
© 2013 IBM Corporation
1. Predictive models to identify customers most
likely to respond
2. Automated cross-selling system to anticipate
next best offer
3. Sales optimization system that measures
expected revenues and cost of making the sale
4. Enterprise feedback management system with,
which allows customized dialog and
personalized product offers
Four phase implementation approach
© 2013 IBM Corporation
Banco Itaú Argentina: Results
40% revenue increase from existing customers
60% margin increase from retail customers
© 2013 IBM Corporation
Q & A
© 2013 IBM Corporation
Wednesday 10th April 2013 at 12:00 PM ET
Hosted by: Owen Kimber
Global Financial Services Solution Leader
IBM Business Analytics
Live Demonstration: IBM Customer Profitability Analytics
Learn more and register