Banking and Financial Services Analytics

Introduction

If we want to learn analytics in Banking and Financial Services domain , then we need to understand three main areas of banking business.

  • How to acquire new customers.
  • How to engage them
  • How to deal with risky customers.

Key Terms

There are different concepts in this domain.  For examples,

  1. Deposit or Liability products – > like Saving , Current , Fixed Deposit.
  2. Lending or Asset products  – > Different type of loans , Credit Card.
  3. Profit and Loss statement – > Revenues , Costs etc.

Customer Journey

In BFS, there are three main phases of a customer journey.

  • Customer Acquisition
  • Customer Engagement
  • Risk Management

1. Customer Acquisition:

It means selling right product to right customer through the right channel. Here these type of customers are known as prospects. This Customer Acquisition is known as Acquisition Analytics. Using acquisition analytics we can address below main problems.

  • Prospect identification: Identify the right prospects who are more likely to buy the product
  • Customer Segmentation: Create different prospect segments
  • Channel Optimization: Reach out to the prospects to maximize the chances of acquisition
  • Application Scorecard:Quantify the quality of individual prospects by assigning scores

2. Customer Engagement:

Customer Engagement is known as Engagement Analytics. It occurs after acquired the customer (conversion from prospect to an existing customer). Under engagement, some of the most important problems to solve are:

  • Selling new / upgraded products to customers. This is known ascross-selling / upselling.
  • Retaining the customers or avoiding attrition which is called loyalty management.

3. Risk Management:

Here Risk management is called as Risk analytics. It mainly comprises of predicting and differentiating the good customers from the bad or the risky ones.

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