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Issue of May 2006 

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Business Intelligence

Bonding BI with banking

With over three million customers, HDFC Bank needed a business intelligence framework to keep up with and analyse its information stores


Business intelligence (BI) tools are the banking sector’s lifeline, helping to consolidate the vast volumes of data, and target the right segment for the right scheme. Success helps in reducing costs tremendously.

HDFC Bank started using BI in 2001 when their customer base expanded to over three million. Explains Munish Mittal, the bank’s Vice-president for Information Technology, “Once we acquired critical mass with around three to four million customers in 2001, we had to integrate customer data into a central customer data repository to understand and review all services the customer was subscribing to, as well as customer profitability, to devise a customer-centric framework.”

Within six to nine months after the BI implementation, HDFC felt a tremendous difference in:

  • Analysing customer behaviour and interaction with the bank.
  • Devising a customer contact strategy and implementing suitable channels such as direct banking.
  • Analysing customer preferences for transaction channels.
  • Identifying personalised needs based on relationship value, and devising cross-sell strategies to arrive at the basic mission, which is to be a one-stop shop.
  • Devising a suitable product strategy.
  • Refining new products.

The 360-Degree View

HDFC began implementation by first creating a 360-degree view of customer transactions, profitability, product acquisition, product holding, loan repayment, ticket sizing and transactional trends of usage, which helped them to offer many new things such as electronic bill cards.

Next, HDFC did data warehousing by analysing campaign management using a modelling engine by Unica on top for studying customer behaviour. It took around eight to nine months for the bank to integrate data warehousing across product segments in retail banking.

The HDFC Requirements
  • Arrive at a suitable fee-based service for better channel utilisation by analysing behaviour on average balances maintained by certain customer segments.
  • Upgrade customer profitability across various profitability bands by studying cross-selling strategy through trends from BI framework, and offering alternative fee-based business propositions to less profitable customers.
  • Judge a delinquent customer before granting a second-class/top-up loan.

Bonding them Together

Bonding BI to customers and suppliers was another issue that HDFC had to deal with and managed successfully. “For supply chain relationship management, we have implemented solutions in the area of corporate banking where the payment between the automobile dealer and manufacturer as well as the supplier and the same manufacturer can be executed in real time on the Internet,” reveals Mittal.

HDFC uses various Business Objects technology-based end-user reporting and personal OLAP tools to study the behaviour of supplier, dealer and manufacturer transactions over the Internet to generate trends, devise pricing strategy, and create innovative use of product offerings.

Cleaning Up

For cleaning up data, HDFC has in-built health check-ups, and for Extract Transform Load (ETL) they have database administrators. Mittal explains: “For ETL we have database administrators who work with us to optimise ETL performance. We use innovative and state-of-the-art storage technology to derive maximum performance of IO (input/output) processing.”

For data integration, HDFC has health checks, data standardisation, and data enrichment as a part of their daily/weekly/monthly data warehousing processing. HDFC is currently implementing a data quality and householding solution from SAS for enhancement of its BI infrastructure.

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Indian Express - Business Publications Division

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