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Customer Success

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Customer Success

 

The Power of Analytics

SAS at the heart of customer analytics at Standard Chartered Bank in India

When your customers grow over three-fold in the last three years and the market is driven by fierce competition, with everyone vying for a share of the customer's wallet… what do you do to sustain and grow your market share? This is exactly the challenge that Standard Chartered Bank (SCB), the largest international banking group in India with over 2.2 million retail customers across the country, had on hand. 

With over 1.3 million credit card customers and several firsts to its credit, like the first Global Credit Card, the first Photo card, SCB believes in providing incremental value to its customers and continuously increasing profitability with the customer being the centre of focus. With an array of products and services that include cash management, custody, lending, foreign exchange, interest rate management and debt capital markets to corporates and credit cards, personal loans, mortgages, deposit taking activity, wealth management services to individuals and medium sized businesses and mutual funds to retail customers. SCB is, today, recognized as the world's leading emerging markets bank serving both wholesale and consumer banking customers.   

Growing at such a fervent pace SCB has to manage huge volumes of data generated and captured at each touch-point. To effectively manage and use this data for competitive advantage SCB relies on SAS. SCB introduced what it calls the `Business Intelligence' Unit in the bank to successfully implement and derive such strategies. Based out of Bangalore with over 25 people, this team has seen phenomenal rise within the bank and today fulfils the information requirements of all departments across the bank. “The responsibility of analysing customer data and using it intelligently to achieve a competitive edge lies with this division,” says Vishu Ramachandran, Head - Consumer Banking, SCB.

Realizing the Information Needs:
Prior to embarking on a business intelligence exercise, SCB relied on its online transaction processing systems (OLTP). These systems answered queries from a financial standpoint. There was no scope for in-depth customer analysis - the key to survive in a fiercely competitive financial market place. It answered queries and generated reports at a broad portfolio level: total earnings, debt situation, interest income, cost, fee income and profits thereof. 

SCB realized that it needed to go a step further. It needed a solution that would help manage and analyse the huge volumes of data captured by its OLTP systems. SCB had to make use of the vast amounts of data at its disposal to get the right information, to the right people, at the right time, for decision makers to:

  • exploit changing and widening markets
  • implement a customer-centric approach focused on optimizing lifetime value of the customer 
  • concentrate on financial budgeting, cost control and risk management
  • look for new ways to minimize costs, while at the same time increase profitability and shareholder value by effectively managing consumer relationships


The requirement at SCB was clearly that of a data warehouse and analytical solution that would help analyse customer data to enable fact based decision-making in all areas ranging from acquisitions and risk management to cross-selling and portfolio management. The vision being to champion fact based strategic business decisions using best in class analytics with the objective of enabling the consumer bank to enhance its competitive advantage and economic profits.

A number of players were evaluated including Brio, Cognos and Business Objects. SAS emerged at the top. In fact SCB, today, relies on SAS solutions across Asia for its customer analytics.

Using a suite of SAS products that reside on a RS/6000 machine with AIX as the operating system, SAS software accesses and integrates data from multiple sources and disparate systems across the enterprise. This data is then used for a variety of analyses by the BI unit and disseminated to all the information consumers across the bank that include sales managers, finance resources, credit resources, product heads and managers and the head of consumer banking via the SCB Intranet. As a result, analytics provide a key competitive edge and are used seamlessly for empowering business managers to achieve their goals.

The Power of Analytics:
Says Vishu Ramachandran, Head - Consumer Banking, SCB, “SAS Solutions help us to effectively manage and optimize profitability of all the products that constitute our retail portfolio.”

SAS Solutions form a central part of the bank's customer relationship management strategy. According to Sedjwick John Joseph, Head – Decision Analytics, Consumer Banking, SCB, Singapore, “It is easier for us to run targeted campaigns today and elicit substantially higher returns since we do profit modeling for each account, which enables micro-segmentation. Using analytics and a test and learn culture, we know the likelihood of customers to take on a new product. For, e.g. we know which of our card members are more likely to take an auto loan resulting in more focused marketing campaigns and reduced costs with improved customer satisfaction.”

“As a result, marketing is now empowered with information to increase cross holding, and target our most valuable customers (not accounts within a product line) and also help in the next best product strategy for a customer,” said Joseph.

Using such business intelligence powered by SAS, SCB was able to successfully launch DIVA - a specially designed women's international credit card targeted at the Indian woman who seeks a balance between home and work and is therefore bundled with several first time features. This includes fabulous discounts and 0% interest rates on renowned brands across a wide array of consumer durables, leather products, mobile phones, baby products, travel, airlines, healthcare, etc. 

“On doing an in-depth analysis of our customer data we realized that a significant proportion of our business came from the upwardly mobile Indian woman and was likely to grow substantially from this segment in the coming months. This gave us an impetus to launch such a product to cater to the needs of this segment and consolidate our position in the mind of the customer," added Shyam Srinivasan, General Manager & Head - Credit Cards & Personal Loans, SCB.

Similarly, StanChart launched Axcess Plus - a revolutionary savings account. Customers who have this account can access cash at over 1800 ATMs worldwide through the Visa network. Besides, they can use this account to shop for goods and services at over 25,000 outlets in India and at 10 million outlets worldwide. “This strategy was validated and facilitated by the information provided to us by the BI unit. We realized that using this technique we could provide more value to our savings account customers and help increase customer loyalty,” stated Vikram Issar, Head - Wealth Management, SCB

Customer acquisition is no doubt very critical for SCB. However, something that SCB or any other bank today cannot ignore is the risk reward equation. To arrive at one is a complex and challenging task that all bankers have to accomplish. This means applying a variety of scoring techniques across product lines to arrive at the probable risk associated with each product sale be it a credit card, auto loan, personal loan etc. and providing for the same. SCB uses SAS for scoring virtually all its products in the asset portfolio ranging from its 1.3 million credit card holders to its loan portfolio in excess of $ 860 million. Joseph added, “Information on customer profiles and segments forms the backbone of product strategy for us. It allows us to tailor our products across a diversified consumer base, enabling us to spread the risk across a much wider spectrum.“

In addition to lying at the heart of SCB’s customer relationship management strategy SAS solutions are also used to carry out simulations that impact and help the bank to assess it's overall profitability and balance its exposures across portfolios. “It is critical for us to stress test our portfolios and learn about the best case and worst case scenarios,” adds Sedjwick. “While standard credit risk models provide predictive capability in the normal business environment, stress testing takes care of extreme, adverse situations allowing the management to strategize and plan for them. The technical prowess of SAS' library of advanced statistical techniques helps in achieving the above & arriving at an optimized risk-adjusted capital. “ 

One of the key components that a solution of this nature requires is scalability. This is extremely critical as the volumes of data keep increasing on an ongoing basis. “SAS has the capability of handling different sizes of data. It is much faster to analyze SAS data sets than it is to analyse a standard relational database,” commented Sedjwick.

Going forward StanChart plans to embark on SAS' data mining technologies for various predictive modeling and advanced scoring initiatives to strengthen its risk management framework in the area of retail lending.

All in all, SAS solutions for SCB have provided for optimal customer interactions, improved customer acquisitions and retention rates, via a complete 360-degree view of the customer. Concluded Ramachandran, “The main benefit is that we now know our customer well enough to provide effective customer service and maximize shareholder value. Information, today, if used strategically definitely contributes in providing a cutting edge to an organization. ”

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Standard Chartered Bank

Challenge:
Customer Acquisition & Retention; Customer Profitability Analysis & Increase Cross & Up Sell Opportunities
Solution:
SAS Analytical CRM Solution

SAS solutions help us to effectively manage and optimize profitability of all the products that constitute our retail portfolio.

Vishu Ramachandran

Head - Consumer Banking, SCB

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