China Minsheng Bank targets credit card customer behavior with SAS^®

Knowing more about your customers' card use behavior equals competitive advantage

Like other banks, China Minsheng Bank's credit card business derives profit from annual cardholder fees, recurrent interest and intermediate business revenue, such as merchant trading. This profit has been eroded by declining credit card usage, low customer loyalty and bad debts caused by insufficient risk forecasting. With SAS, Minsheng Bank can predict existing customers' behavior to cross-sell and up-sell products and services. In addition, profitable customers are efficiently and easily targeted, credit levels are adjusted automatically and bad debts are more easily predicted.

Although late to the credit card business, Minsheng Bank, through a series of brand and product innovations, has more than 6 million credit card customers. But, as the Chinese credit card market has matured, building volume and market coverage has provided less benefit for credit card lenders.

In the face of this increasingly competitive market, the bank needed something more. "Minsheng Bank urgently needed a comprehensive and improved analysis system for assessing and managing cardholder use behavior," said Gao Chenwei, Deputy General Manager, System Division. "If we knew more about our customers' behavior, it would give Minsheng Bank's credit card business a competitive advantage."

SAS provided an integrated data consolidation platform and data analysis system to improve Minsheng Bank's decision-making process. "SAS has been implemented in all Minsheng Bank credit card businesses," said Gao. "With SAS, we are improving product cross-selling, predicting user-consumption behavior, automatically adjusting credit levels and collecting bad loans."

Strategic planning and future implementations
With SAS, Minsheng Bank can mine and forecast customer, product, channel and region data. The new SAS strategy consists of "planning as a whole and implementing in steps."

First, critical credit card data is mined to help the staff get customer, product and channel information more quickly, which supports management in marketing, risk management, customer relationship management and financial planning.  

Second, behavior in each phase is assessed and analyzed, including credit card application, new card issue and use. From this, the bank can efficiently target the most profitable customers for cross-selling and avoid bad debts by identifying potentially risky card applications and use.

The balance between risk and benefit
"SAS not only simplifies various business processes, but also helps business departments identify the balance point between risk and benefit, enabling a healthy and quick development of the credit card business," said Gao.

The SAS solution crafted for Minsheng Bank provides a business analytics environment for the entire credit card center from enterprise data consolidation, intelligent storage and business intelligence to predictive analytics, including data mining. Business departments can analyze customer, product and channel data and make fact-based decisions.

The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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