Bangkok--14 Jul--WEBER SHANDWICK
Data warehousing breakthrough “supersizes” the business value of event detection for financial service providers
by Jason Shipman, General Manager Teradata (Thailand), a division of NCR Corporation
At a local branch of one of Thailand’s nationwide banks, a man makes a significant deposit. The man then transfers this money to another, alternative form of investment plan, outside of his daily banking institution. He might eventually move the bulk of his investments to yet another institution that administers his retirement savings plan.
But because of a powerful advance in event detection technology, his bank has a new tool to help retain these types of customers, and catches this large deposit and its significance at the moment it occurs
When the man deposits his money, the IT system loads the transaction into the company’s enterprise data warehouse in near real-time. An instant trigger identifies the transaction as unusually large. A comprehensive analysis then looks at information about the man’s banking and credit history, as well as personal information (such as his marital status and dependents) to develop business intelligence about this customer and some of the bank’s products that might appeal to him.
The bank’s analysis identifies an ideal investment vehicle that waives administrative fees for the first three years. Within moments, the data warehouse pushes the offer out to the local customer service representative, who calls the man to acknowledge his deposit and to make the offer. The sale is made, the money stays within the bank — and so does the customer, who’s also impressed and appreciative of the personalized service.
An Emerging Market Trend
This story, multiplied by thousands upon thousands of customers, exemplifies the promise of event detection in the banking industry. Targeted, event-based service catches customers at an opportune time. Customer retention, new customer acquisition and cross-marketing successes all significantly improve. This is especially critical to banks, where until very recently, the ability to combine events with in-depth historical and customer profile data was more a dream than reality. There was simply no reliable way to combine recognition of the trigger event, the analysis, and the deployment and integration of an offer or action in near real time.
Recently, however, data warehousing advances are allowing companies to achieve the dream by enabling all of those processes on the same technology platform with a single, up-to-date copy of the data. A few leading companies in a variety of industries are already taking advantage of this sophisticated new level of event detection, providing them with an unusual competitive advantage in Thailand’s fast-maturing customer relationship management (CRM) landscape.
The integration of data from historic events with real-time events is the foundation for advanced business intelligence.
This is an emerging market trend; more and more companies are using this business intelligence to support their decision-making. Banks are part of this trend, but at this point, not many are taking advantage of advances in event detection, which is why now is an ideal time for those banks ready to move.
It’s About Service
In a global service economy, customer service is often the key differentiator among competing financial institutions. Over the past few years, most banks have tried to enhance their customer service by properly segmenting the market and doing target marketing to particular customer-types. Such campaigns still have value, but advanced event detection means that technology has even more to offer.
The new Holy Grail is to capture the customer’s attention at precisely the time when the he or she is most receptive, with exactly the right product. As the example above demonstrates, those are the moments that earn lifelong, high-value customers.
Moreover, such moments — opportunities to demonstrate superior customer service — occur with striking frequency. Consider just a few opportunities that a bank might detect on a regular basis:
Dramatic changes in account balances
Customer initiated communications (inquiries, complaints, etc.)
Significant stock market losses
Late fees
Holes in Current Systems
At present, though, most Thai banks don’t have that kind of moment-to-moment business intelligence. There are a number of reasons.
First, while most can detect the large withdrawals, many can’t connect them to particular customers in near-real time.
In other cases, the convergence of history and real-time events is available, but is susceptible to human error, as when a bank teller works with an elderly person as they withdraw a large amount of money. If the teller isn’t trained to recognize the opportunity — or the system doesn’t flag him or her with potential offers — the opportunity is lost. Other times, the system simply isn’t quick enough. It doesn’t load the transactional data immediately or it can’t do the analysis or find the customer profile quickly enough to seize the moment.
Breakthrough Time
The ability to address all of these stumbling blocks and achieve next generation event detection is tied to an important, recent advance in data warehousing. From a single platform, enterprise date warehouses can now capture and load transactional data within seconds (often through “trickle feeds” or enterprise application integration message queues). That same platform can also run powerful new analytical applications, known in some circles as business activity monitoring software, which continuously monitor and detect events, and then perform in-depth analysis and suggest potential actions by drawing on extraordinarily deep business intelligence at the time the event occurs. This is a significant advance that benefits the financial institution and its customers alike.
Finally, banks can now do all this without compromising their traditional, less time-dependent data warehouse workload, such as identifying preferred customers for targeted marketing programs, conducting market basket or product forecasting analyses, and other related analyses on years of historical data.
The Next Generation is Now
Most financial institutions recognize that because so many of their products are now commodities, the real differentiator is their ability to service their customers. The power inherent in these advances in event detection is quite simple: it enables companies to deliver the right service and the right product to the right customer at the right time. In doing so, banks can garner the type of customer loyalty they need to thrive.