Value Proposition for Financial Institutions
CRM is the strategy of creating, expanding and sustaining the customer relationship. CRM in the Banking industry aims at two main objectives:
An integrated CRM strategy should win the customer, build a relationship and intensify it by anticipating his needs and concerns through all phases of customer lifetime.
Lifecycle management integrates all appropriate activities that should be taken during the customers lifecycles in order to maximize customer lifetime value.
Attrition Propensity Modeling
As acquisition costs increase, financial institutions are beginning to place a greater emphasis on customer retention programs. Experience shows that a customer holding two products with the same bank is much more likely to stay loyal than a customer holding a single product. Similarly, a customer holding three products is less likely to switch than a customer holding less than three. Locking products are considered the payroll/pension account as well as the internet banking. By offering bundled services to customers, such as payroll account with free credit card, a bank adds value and thereby increases customer loyalty, reducing the likelihood the customer will switch to a rival firm.
Based on our experience, a customer level attrition model will be based on attributes such as:
Number of different products / services used by customer
Date of last product opening
Use of locking products such as: internet banking, credit/debit cards, payroll/pension accounts
Frequency of time deposit accounts renewals
Money transfers to other banking accounts
Usage trends such as decrease in credit card purchase transactions
Triggers such as: big withdrawals, closure of any product, switch of payroll account, payout requests for loans etc.