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Issue of February 2003 
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Case Study: Standard Charteredís CRM
Banking on customer relations

Standard Chartered Bank was looking for a tool that would help it analyze the huge volumes of data captured by its OLTP systems. The objective was to analyze new business opportunities, provide better customer service, and boost profitability. by Soutiman Das Gupta

Standard Chartered Bank (SCB) previously used OnLine Transaction Processing (OLTP) system, which facilitated and managed transaction-oriented applications. "The system was reliable but provided little scope for in-depth customer analysis, which is the key to survive in the fiercely competitive financial marketplace. It answered the financial queries and generated reports at a broad portfolio level, which included total earnings, debt situation, interest income, cost, fee income, and profits," said Sedjwick John Joseph, Head-Business Intelligence Unit, SCB.

The bank realized that it needed to go a step further and deploy a solution which it can use to analyze the huge volumes of data captured by its OLTP systems. The idea was to search for crucial nuggets of information from the vast amounts of transactional data at its disposal to get the right information, to the right executive and at the right time. This information can help a bank take critical business decisions in the dog-eat-dog financial world.

The bank's IT team looked at the business requirement in detail and deduced that the organization needed a data warehousing and analytical solution that would help analyze customer data to enable fact-based decision making in areas ranging from acquisition and risk management to cross-selling and portfolio management. After evaluating a number of vendor offerings, SCB decided to use a suite of products from SAS. It went for the SAS Customizable CRM Solutions (See box: The solution up close).

In a nutshell
  • The company
    Standard Chartered Bank has over 2.2 million retail customers and over 1.3 million credit card customers nationwide. Its products and services include cash management, custody, lending, foreign exchange, interest rate management, and debt capital markets.
  • The need
    The bank needed to manage and analyze the huge volumes of data captured by its OLTP systems. It had to get the right information, to the right people, at the right time, in order to carry out a number of critical business activities and provide excellent customer service.
  • The solution
    SCB decided to go for SAS Customizable CRM Solutions to address its business needs.
  • The benefits
    The bank can now exploit changing and widening markets; implement a customer-centric approach; concentrate on financial budgeting, cost control, and risk management; and figure out new ways to minimize costs, while increasing profitability and shareholder value.

Varied services
A better way to understand the bank's need would be to understand its customer base and the varied services it provides.

SCB has over 2.2 million retail customers and over 1.3 million credit card customers nationwide. It claims to be the first to launch initiatives like a Global Credit Card and a Photocard in India. Its products and services include cash management, custody, lending, foreign exchange, interest rate management, and debt capital markets for 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.

"Our customer base has grown three-fold in the last three years. Such a fervent pace needed to be supported by efficient management of the huge volumes of data generated and captured at each touch-point. After all it is absolutely essential to keep up the bank's unchallenged reputation of efficiency," said Sedjwick.

Defining benefits
The bank's vision was to champion fact-based strategic business decisions using best-in-class analytics. The objective was to enhance the organization's competitive advantage and boost profits. The bank was looking forward to the following broad benefits:

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

Solution needs
It was clear that in order to achieve the desired benefits, the bank had to implement a data warehouse and analytical solution. Sedjwick said, "We wanted a solution that can perform analytics on the valuable customer data to answer queries across divisions. The answers would then enable us to proactively service customers and thereby ensure customer loyalty and retention. This exercise is a must for survival in a fiercely competitive environment."

He continues, "Any bank today cannot ignore the risk:reward equation. Calculating it is a complex and challenging task that all bankers have to accomplish. It's the process of applying a variety of scoring techniques across product lines to arrive at the probable risk associated with each product sale and the possible rewards. Examples of products are credit cards, auto loans, and personal loans. We wanted the solution to leverage information on customer profiles and segments and enable us to spread our risks based on empirical data analysis."

"We also wanted the solution to be scalable. This was crucial as the solutions would be very critical to our business, and the volumes of data kept increasing exponentially."

The bank created a team of 25 people in Bangalore and called it a Business Intelligence Unit. This unit was responsible for deriving and implementing strategies to analyze and exploit customer data.

"The company evaluated a number of solutions from Brio, Cognos, Business Objects, and SAS. SAS was chosen as the preferred solution partner and SCB today relies on SAS solutions across Asia for its customer analytics," said Sedjwick.

The SAS solutions reside on an IBM RS/6000 server running the AIX operating system. The 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 Business Intelligence Unit and is disseminated to all information consumers across the bank. The information consumers 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 manager in their goals," said Sedjwick.

Analytics' benefit
The solution has helped the bank effectively manage and optimize profitability of all the products that constitute its retail portfolio.

Sedjwick said, "SAS's solutions forms a central part of the bank's CRM strategy. It is easier for us to run targeted campaigns and elicit substantially higher returns since we perform profit modeling for each account. This also enables micro-segmentation. Using analytics, and a test and learn culture we know the likelihood of customers to take a new product. We now know which card member is more likely to take an auto loan. This has resulted in more focused marketing campaigns and reduced costs with improved customer satisfaction."

The organization's marketing team is now empowered with information to increase cross holding, and can target its most valuable customers (not accounts within a product line) and also help in the next best product strategy for a customer.

New products
With the help of the Business Intelligence (BI) solutions, SCB was able to successfully launch DIVA. DIVA is a specially designed women's international credit card targeted at the Indian woman and bundled with several features. It includes discounts and zero interest rates on categories like jewellery, cosmetics, apparel, consumer durables, leather products, and mobile phones.

"This was possible due to an in-depth analysis of our customer data provided by the BI solutions. We realized that a significant proportion of our business came from the upwardly mobile Indian woman and was likely to grow substantially from this section in the coming months. This gave us an impetus to launch a product which catered to the needs of this segment and consolidate our position in the mind of the customer," said Sedjwick.

The bank also launched the aXcess plus 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 by using this technique we could provide more value to our savings account customers and help increase customer loyalty," declared Sedjwick.

Other benefits
"We are successfully able to calculate our risk:reward equation," said Sedjwick. 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. "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," explained Sedjwick.

SAS solutions are also used to carry out simulations that help the bank assess its overall profitability and balance its exposures across portfolios. The bank can carry out stress tests on its portfolios and learn about the best case and worst case scenarios. The working of the SAS library of advanced statistical techniques helps in achieving the results and arriving at an optimized risk-adjusted capital.

"The solution can scale to handle different sizes of data and takes much less time to analyze SAS data sets than it takes to analyze a standard relational database," said Sedjwick.

Future plans
In future SCB 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.

"Now that we know our customer well enough to provide effective customer service and maximize shareholder value, we will keep using information strategically so that it contributes in providing a cutting edge to our organization," said Sedjwick.

The solution up close

Standard Chartered Bank uses SAS Customizable CRM Solution.

SAS feels that a company has to adopt a truly customer-centric approach to manage its business. It means that fundamental decisions on strategy and resource allocation must be based on a detailed and accurate understanding of customers and the overall market. It feels that customized CRM solutions can provide access to the information you need to come out on top.
The customizable CRM solution can:

  • Integrate information from multiple sources, eliminate data errors and redundancies, tailor data for efficient access and analysis, and reduce the complexity of data management.
  • Anticipate customer expectations and predict customer behavior like, propensity to purchase, lifetime profitability, and credit risk.
  • Allow to cross-sell and up-sell. It can help identify the best candidates for purchasing particular combinations of products and services, and focus the marketing efforts on a more receptive audience.
  • Combine business rules and analytic models to accurately segment and profile customers, and construct a personalized strategy for each group.
  • Deliver customer intelligence into front office systems to enable smarter customer interactions through various channels.
  • Combine behavioral insights derived from analytics with attitudinal data obtained from online and offline customer surveys.


Soutiman Das Gupta can be reached at

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