Think Big, Start Small, Grow Fast

UBS cultivates stronger customer relationships with the help of SAS

UBS creates added value for its clients by drawing on the combined resources and expertise of all of its businesses, putting advice at the heart of strong and profitable client relationships. The company expends a lot of time and effort to understand the needs and goals of clients as individuals, providing the best possible choice of solutions. So the bank wants to ensure that this time and effort is directed as effectively as possible. SAS software plays a major role in meeting these objectives.

Customer Orientation
Dr. Daniel Rüegge of the Wealth Management and Business Banking unit within UBS explains, "Customer orientation is the most important driver of our business. We strive to offer our customers segment-specific, product-neutral and sustainable solutions, and we do this by building up long-term personal relationships."

In practice this involves a four-stage process: first, understand the customer needs; second, propose solutions; third, execute; and fourth, monitor and review. All of those steps are essentially the responsibility of the client adviser, but Rüegge says that analytical CRM plays a key role in supporting the first, second and fourth stages in the process.

Analytical CRM
In April 2001 the UBS executive board set up a Competence Centre for Analytical CRM (CCACRM) and mandated it to build a Customer Information and Business Analysis System (CIBAS).

The three CCACRM functions are: first, to provide traditional up-selling and cross-selling services for the three sales units, together with discovering new potential within all customer segments. Rüegge explains, "Sometimes this is easy – for example, if you see that a retail client is already very wealthy. But in other cases it is more difficult. We want to develop customers, and to do that we need to guide them early on so that we can offer the right solutions at the right time.

"The better you know which groups of customers are doing what and when, the better you can direct your sales force to be there at the right time, or to contact clients with the appropriate mailing campaigns, events and programs." Second, CCACRM enables customer profiling from a product perspective. Product managers want to know who is buying their products and why, and they want to know when is the best time to contact new customers. "You might have 10 points on which you want to contact the client, but it is foolish to do more than two or three at a time; so you need to have some effective collision management in place," says Rüegge.

Third, CCACRM receives a lot of demands for strategic information, activity that requires input from several business units and functions. CCACRM's contribution is to analyze trends within the customer base, to help arrive at decisions based on where the major opportunities exist to gather the "low-hanging fruit."

Evolution of CRM at UBS
Rüegge characterizes the development of successful analytical CRM at UBS as "think big, start small, grow fast." The CRM strategy dates back to 1996 when it first became clear that information-based marketing, using tools such as data mining, was the way to future success in banking. Having laid out the strategy, UBS started focused activities such as increasing the effectiveness of direct mail to improve cross-selling and customer retention in retail banking. By 1999 UBS had implemented a SAS-based Advanced Marketing System (AMS), achieving rapid successes with a quick start program, exploiting data covering a 36-month history of some 4 million customer relationships. Early project successes included cross-selling of credit cards to the customer base; UBS discovered that the success factors included evolutionary development of solutions followed by rapid rollout, interdisciplinary teams and scalable technology.

The success of AMS in identifying customers with highest sales potential now created the demand to "grow fast." CCACRM was set up to extend analytical capabilities within the Wealth Management and Business Banking areas. The expectations were high. CCACRM needed to ramp up the available people skills, such as analytical competence, project management and business know-how.

Way Beyond ROI
It also hard to scale up the technology platform to meet the new demands, integrating the CRM system within the enterprisewide data warehousing program. The goals of the new CIBAS system were to capture and extend the advantages of CRM while increasing efficiency through automation and data quality, without adding to cost. CIBAS now provides a range of analytical solutions to UBS' sales organizations, to the customer advisers and to the direct marketing function. A feedback loop into the data sources enables continuous improvement of data quality.

Containing five terabytes of data, the SAS-based CIBAS data warehouse now provides information on 7 million customer relationships with a 48-month history, updated on a monthly basis. For each relationship there are at least 2,000 attributes. To support more effective analysis at the level of the individual customer, CCACRM is constantly creating new attributes – for example, the amount of assets a customer has converted to cash. "While this may sound simple, it raises interesting business questions and helps you to formulate entirely new descriptors of customers. By doing this, you reduce future programming requirements, which increases analytical efficiency as well as flexibility."

What has been the return on CIBAS? Rüegge believes that it goes way beyond traditional measures of ROI. "If you want to succeed and prosper in modern banking, you have no choice but to create and exploit new information faster than the competition.

"CIBAS makes us proactively ready for business change, which in banking is inevitable, especially at a company like UBS. It is our mission to refine and tailor solutions for smaller and smaller customer segments."

CIBAS also prepares UBS for technology change. "As data sources are replaced, everything about the customer that stays constant will stay constant in CIBAS," says Rüegge. A three-stage data quality process ensures that the data is reliable and up to date.

SAS analytical CRM software, including SAS Enterprise Miner, is easily accessible through desktop PC tools. CCACRM undertakes some 150-200 analytical projects for up to 15 key "internal customers" per year, who include representatives of the sales units and task forces set up to address specific challenges and new topics.

Grow Fast
Rüegge says that the CIBAS solution is delivering exceptionally high performance, enabling analysts to work on an average of 16 project activities concurrently. "Standardizing on SAS has made this speed and efficiency possible," says Rüegge. "It is a robust, scalable and flexible technology. I don't know how we would have managed if we had switched to a different software platform. SAS removed the technical challenges and enabled us to focus on meeting the business requirements. Analysts can concentrate on developing and exploiting their business skills so that they can make the right choices from the options identified by the software. As a result we're getting better and better at targeting our sales and marketing efforts precisely and effectively. And this is the key to the UBS success story."

About UBS
UBS is the world's leading provider of wealth management services.

With CHF 1.3 trillion (US$1 trillion) assets under management, it is among the major investment banking and securities houses. UBS is the clear market leader serving corporate and retail clients in Switzerland; it also operates in more than 50 other countries and from all major international financial centres. This global presence is complemented by a multi-channel strategy embracing traditional retail banks and interactive online services.

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