Last week, FICO and industry analyst IDC Financial Insights gathered 30+ senior risk officers from banks across the region for the third annual FICO APAC Chief Risk Officer Forum, held in Thailand. Amidst continued global economic pressures, decreased rates of regional growth and increased competition for customers, the forum provided an outlet for risk officers to share new pain points and key learnings, as well as hear from a few of our visiting experts on emerging global best practices.
We addressed several pressing questions that attendees shared in advance, among them:
- What is the new path forward for growth and profitability?
- How important is Big Data, and how applicable are Big Data strategies and analytics even in smaller countries?
- How can new channels, like mobile, and new technologies, like cloud and automated customer contact, be incorporated painlessly?
- What can banks learn from retailers in terms of their marketing and customer engagement?
It was an ambitious agenda, to say the least.
In the end, one takeaway rang clear, no matter the maturity, level of analytic sophistication or economic state of the country: Banks need to be strengthening their portfolios from within by cultivating existing customers for untapped growth and profitability. They could achieve double-digit growth with more and better customer-level decisions in their existing portfolios.
The conversation was encouraging. Many attendees “get” that they now have to do business with customers, not accounts. More specifically, they know they should be doing customer-level decisioning. This is especially true in mature markets where new customer acquisition has slowed or reached saturation, and in heavily regulated countries where traditional revenue-generators, like fees and credit limit increases, are less available.
The attendees heard from fellow blogger Andrew Jennings, who discussed how banks operating in product-specific silos need to get moving on data integration. He also explored the value of looking at new data sources, such as the predictive elements of Big Data as well as transaction data from deposit accounts.
They also heard from Cyrus Daruwala, managing director at IDC Financial Insights in Asia Pacific. He presented recent survey findings on how much they predict spending on risk and compliance initiatives will increase in 2013. Somewhat alarmingly, he said that banks that are not using fully integrated customer management systems will end up spending as much as 40% more in risk and compliance spending alone.
It was a rich discussion, and we’ll be blogging more about it over the next few weeks.