CRM Analytics at Royal Bank

1

Ashutosh A21

Mini K V A43

Ramesh A53

Sriju Nair A68

2

• Royal Bank was founded as Merchants Bank in Halifax, Nova Scotia in 1864• In 1901, as the business of the bank expanded across the continent, it chose to rename itself The Royal Bank of Canada.• Today Royal Bank is the largest bank in Canada, with assets of CAN$294bn (Rs.16226/- crore).• The bank serves nearly 10 million individual and business customers worldwide.•Within Canada the bank has the leading market share in deposit accounts and both personal and business loans.• 1,300 branch offices• 4,500 automated teller machines (ATMs)• Approximately 87,250 proprietary point-of-sale terminals

INTRODUCTION CRM AT ROYAL BANK CRM ANALYTICS CONCLUSION

3

•Stated objective “to capture the full potential of our customer base through the use of customer information to deliver the right solutions in a consistent, professional manner at every point of contact”.•Aggressive effort to manage the quality of its interactions with customers.•The bank has pursued technologies that enable CRM through both customer interaction and customer knowledge.

Introduction


4

• The bank was an early adopter of a client information file (CIF) over 20 years ago.• Customer data

A rolling 3 months of detailed transaction data and 18 months of summarized customer data online in its data warehouse)

Royal Bank’s success with CRM

• The bank’s CEO and executive team vocally and visibly support the bank’s CRM efforts• CRM not solely depends on technology but also on properly trained employees and precisely aligned business processes.


5

Technology Driven CRM

Gathering and miningcustomer data

Execution of strategies at the customer interface


6


7

5 Customer Platforms

Personal and Commercial Banking

Wealth Management

Insurance

Corporate & Investment Bank

Specialized Transaction Services


8


• RBC has been developing its CRM strategy to improve customers’ experiences and involvement with the Bank.

• Central to its approach has been the development of new metrics and analytical techniques to allow it to offer a more one-to-one service.

CUSTOMER DATA

CHALLENGE???

PARSE CUSTOMER DATA

MEANINGFUL ASPECTS DISTRIBUTE DATA TOUCHPOINTS

CRM CONCEPT

Integral to marketing of products an services

within the bank

Discipline for managing customer interactions

9

SALESCULTURE

SERVICECULTURE

TRAINING

1. Proactively selling its products and services to customers

2. Developed a sales infrastructure that includes weekly sales goals, regular sales meetings, and a system of sales incentive compensation

3. Match the appropriate product and service to the customer

4. Sales discussions are solidly based upon an understanding of the customer’s financial needs and goals

ADDRESSING CULTURAL ISSUES


10

SALESCULTURE

SERVICECULTURE

TRAINING

1. Royal Bank’s service orientation is to provide critical customer information to the points of customer contact

2. The key elements that allow customers to receive excellent service in their home branches are captured and distributed across the touch points

3. Customer contact people still deliver “service,” but they do so with an enhanced knowledge of who the customer is as well as their preferences



11

SALESCULTURE

SERVICECULTURE

TRAINING

1. Embracing a CRM business strategy requires more than the development of a mission statement—it requires employees to acknowledge it, believe it, and understand how the strategy will change the way they do their jobs.

2. Within Royal Bank, the training of employees to deliver a true customer-focused business strategy is acknowledged to be the most critical aspect of the CRM implementation.



12

ALLIGNING BUSINESS PROCESSES FOR CRM

CENTRALIZING OPERATIONS

ORGANIZING AROUND CUSTOMERS

Increase in the time available for sales and services activity

The amount of time branch employees can spend on sales and service activities went from anaverage of 40% to 70% of their time


13

IMPLEMENTING CRM RELATED TECHNOLOGIES1. “manned” channels would

represent more of a challenge than those that are purely

automated.

2. Royal Bank concentrated its early CRM efforts in three critical areas—direct mail; call centers, and branches.

3. The bank sought to provide contact personnel with actionable information to make consistent decisions.


14

Core responsibilities of strategic marketing research and analytics (SMR & A)

• Customer Profitability Measurement

• Customer Decision-Making

• Segmentation , Modeling and Advanced Analytics

• Primary Marketing Research


15

Staffing of Smr & A

• Started in 1995 with one senior manager

• At present staff size is 25 with employees from diverse fields

( Economics , Management, Statistics)

• Deployment of leading-edge technologies available in

financial services

• Uncommon practice : Market Research , Analytics & CRM

client decisioning are on the same team


16

Early analytical efforts

• 1992 , measured retail customer profitability

• Value Analyzer profitability system is used currently

• Other strategic client models : Credit Risk, Lifetime value, Vulnerability,

Commitment, Consolidation, Channel Preferences etc.

• Increased quality of sales lead compensated for decrease in volume of

leads

• Identifying customers who tend to close their accounts over time


17

CUSTOMER ORIENTED STRATEGIES

Marketing and Sales

• Predicting product and services that have high propensities for purchase

• Specific product and service recommendations are appended to customer profile database

• Marketing response rates of 15-20% after application of analytics

Customer Experience

• Imperative to manage every customer experience

• Standardizing decision making related to customer service

• Example : Setting courtesy OD limit for every customer


18

Building Individualized Customer Relationships

1. Retain existing profitable customers

2. Grow and strengthen customer relationships

3. Manage and control customer credit risk

4. Optimize costs

Competitive advantage lies in its ability to optimize between client’s needs and bank’s

objectives


19

Generic algorithm

Parametric and non-parametric modelling technique

Analytics techniques for crm

1


20

Generic algorithm

Neural networks



1 2


21

Generic algorithm

Neural networks

Factor analysis



1 2 3


22

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis



1 2 3 4


23

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis

CHAI D



1 2 3 4

5


24

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis

CHAI D StatisticalRegression



1 2 3 4

5 6


25

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis


Logistic Regression



1 2 3 4

5 6 7


26

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis


Logistic Regression

Non parametric Models



1 2 3 4

5 6 7 8


27

Generic algorithm

Neural networks

Factor analysis

Cluster Analysis


Logistic Regression

Non parametric Models

Bayes theorem



1 2 3 4

5 6 7 8 9


28

Royal bank takes the output of the modelling process along with selected internal and external data to provide input to the decision engine.

Modelling And Decision making Process At Royal Bank

These data points combined with defined business rules in the decision engine , create actionable customer strategies

Actions resulting from customer strategies displayed to call center and branch personnel on their desktops

For a number of years the bank has been using the strata enterprise rules-based decision engine from American management System (AMS) to make Consumer decisions


29

Well trained personnel and CRM-based business

processes to be used for building relationships with

client

Technology powers the advanced analytics that allow the bank to create

meaningful and appropriate sales and services strategies

ConclusionRoyal banks approach to CRM

Technology + People + Business Process

The acknowledgement of this reality and the willingness to allocate resources separates Royal bank from most other FSIs

Goal of CRM – “To ensure the interaction with customers are consistent and appropriate across all the delivery channel”

Consistency and appropriateness in customer messages can only be achieved if critical customer information is widely distributed among all points of customer contact.Two primary channels involved in the bank’s CRM implementation – 1. Branches 2. Call centers

Bank’s unmanned channel - Internet ( Not incorporated into project) But have been identified for inclusion in later phase


30

THANK YOU……

31

32

Data & Analytics

CRM Analytics at Royal Bank