Johnson K Jose
Deputy General Manager - IT
Creating a Holistic View of the Customer with a Unique Customer Identity
Federal Bank uses SAS Data Quality to improve and maintain Customer data quality and achieves a strong unified view of its 8 Million customers
Federal Bank is a major Indian commercial bank in the private sector, having more than thousand branches and ATMs spread across different states in India. Federal Bank aspires to be a ‘customer-centric’ organisation and be trusted partner of choice for its customers, offering innovative yet simple products supported by state-of-the-art technology.
In view of increasing complexity and volume of financial transactions it is necessary that customers do not have multiple identities within a bank, in this regard the Reserve Bank of India issued guidelines for banks to introduce
a unique identification code (UCIC) for each customer as a first step and is planning to set up a centralized KYC registry in its overall effort to improve its capability to monitor KYC compliance and tackle Money Laundering (AML) and Terrorism Finance (CFT).
We don’t look at SAS from the cost and benefit perspective, but more as an investment. Being aware of its capabilities, we are assured of tangible returns on our journey with SAS.
Johnson K Jose
“We had a problem of Individuals holding multiple accounts under multiple customer identification codes across various branches” explains Aneesh Varkey, Senior Manager IT.
The problem amplified as the existing customer base was not de-duplicated and the bank was in a high growth phase with thousands of customers getting onboarded on a daily basis. There was lack of a robust process to ensure compliance to regulatory requirements on AML, KYC & CFT. Also, the process of scanning of customer data through regulatory black lists so as to ensure right set of individuals and entities became the customers of the bank was missing.
“Generally, the quality of customer demographic, address and identification data were good since we had standardised the input options at the core banking solution level, but some effort was required to clean the existing customer database and process to ensure good data quality on an ongoing basis” says Ms. Minu Raghavan, Assistant General Manager - IT.
Being a customer centric organisation and the changing business and regulatory scenario where money and transactions flow seamlessly across borders and ever tightening compliances, the bank took upon themselves to identify the solution and resolve the problem with a forward looking view.
Federal Bank selected SAS Data Quality solution as part of the larger SAS technology and risk solution offerings to improve the level of compliance and quality of its customer data. The Federal Bank IT team undertook the project of deduplication and cleansing of its customer database and implemented a process through a set of custom data quality business rules in order to prevent future customer duplicity, data inconsistencies and to maintain a single customer view.
Using SAS data quality solution, the bank’s IT department implemented the entire process on their own. “We could complete the initial roll out in less than 2 months of time and it is very easy to incorporate the changes on an ongoing basis” says Aneesh. Aneesh further explains “through SAS, setting new rules or modifying existing ones is very easy as it is all done through an interactive GUI and it is quick to production.”
“SAS does have learning curve, however once you are up the curve, you realise all the capabilities that SAS brings to the table and the things that can be achieved” says Minu.
“Today we can carry-out the customer de-duplication and customer profiling on day one, right at the stage of customer on-boarding and interestingly, we get insights which were not available earlier” Minu explains.
Some of the key benefits include
- Set up of a streamlined process for customer deduplication on an ongoing basis which means the officials can now invest more time on analytics and decision making than data intensive activities.
- Compliance to regulatory requirements:
- Unique Customer Identification Code generation
- Scanning customers through regulatory black lists
- Better compliance to AML, KYC and CFT norms
- Helps in NPA classification. The bank can now classify all the facilities as NPA if any one of the facility / accounts turns NPA. This has helped the bank inreducing the consequent losses from NPAs.
- Federal Bank is now in a better position to respond to queries from regulators and other investigative agencies.
- Helps the bank in monitoring the customer exposure at an aggregate level, thus enabling a holistic view of the actual risk undertaken.
Federal Bank was able to identify and remove 10% of duplicate records from its database by deploying data quality rules using advanced fuzzy matching capabilities, and the same rules were applied to the new and incoming customer data.
The bank is under the process of extending the usage of SAS data management to create a process for improving the quality of its collateral database. A unique security ID would be assigned for the collaterals placed with the bank, enabling analysis of multi-exposure, multi-collateral through optimal collateral allocation logic which in turn could result in saving of regulatory capital.
“Having achieved the objective of getting good quality of data and a single view of the customer, we are now looking at the exciting possibilities of ulilising these new insights gained from our customers and their profiles. We have initiated targeted marketing campaigns to improve the customer profitability, improve our costing and risk models which in turn give us the potential to save on cost, better utilize capital and boost profitability” says Mr. Johnson.
- Manual & time consuming process to generate a single view of customers.
- Difficult to ensure and maintain Customer data quality.
- Ever changing business and regulatory environment.
- Flexible to adapt to the changing business environment and improved time to production.
- Improved compliance to UCIC, KYC, AML and CFT guidelines.
- Streamlined process for new customers with a forward looking view.