We recently held a very engaging and well-attended seminar in Manila on customer management and profitability. Of course, the topic doesn’t only strike a chord with our Philippine clients; it’s a growing priority for banks worldwide. Finding new customers is very costly, up to 5 times more expensive than broadening relationships with existing customers. Needless to say, it pays to know the needs of your customers and keep them satisfied, in order to grow those relationships and increase retention.
Across emerging markets in Asia, we’re seeing banks looking to invest in the right customer management solutions—solutions that enable the best mix of both account and customer data, and that leverage predictive analytics, to improve customer decisions in areas such as credit line management, collections and marketing.
At the seminar, we discussed the value of supplementing account data with enterprise customer data. For example, we see many regional banks using multiple collections systems: one for delinquent credit card customers, another for retail banking products and perhaps even another for mortgages. If a customer is delinquent on more than one product at the same time—a credit card and a personal loan, let’s say—it’s not uncommon to be contacted by two different bank representatives on the same day. Wouldn’t it be better, in terms of both customer service and collection costs, to discuss all outstanding debts in a single call to the customer?
A similar problem arises when a bank has multiple origination systems: one for cards, another for retail banking products and so on. Often campaigns and offers are not coordinated, meaning you might be leaving money on the table—or even unknowingly inflating your credit risk.
Whilst there can be barriers to managing at the customer level, there are clear gains for banks that get it right. We’ve worked with banks where bad debt was reduced by 20-30% and attrition reduced by 50%.