National Bank:  Controlling Risk While Doubling Customer Base

Old Way

As the bank expanded by acquiring other institutions, integrating a new institution took 12 months.  Data was stored in many databases, and the different institutions used different approaches.

Many decisions were account-level, not customer-centered, and as a result they were manual and inconsistent.  Competing products within the bank often were sold to the same customer, and many customers were customers of both the main bank and an acquired one.  The bank needed to increase its share of its customers' wallets, so approval rates needed to increase.  However, collections and risk management remained issues that the bank couldn't ignore.

EDM Way

A Customer Data Integration (CDI) initiative brought customer data together, and this single coherent customer view was the basis of decisions.  Business rules and predictive analytics aligned product offers around both predicted customer needs and ability to pay.

Benefits

• A single integration point on the EDM backbone reduced integration time for new institutions by 75 percent (from 12 months to 3 months).
  
  
• Delinquency rates dropped by 30 percent.
  
  
• Improvements in collections and delinquencies meant the bank could lower its bad-debt provision by 60 percent, as shown in Figure 1.

Figure 1. The accumulated reduction in provision for loss, thanks to a risk management EDM solution