Bancaja Developing Customer Intelligence

In our days we all live in a situation of redundancy of the information, when the information is accessible and in surplus. And therefore today not simply enough to own the information, it is necessary to be able to structure it correctly in order to put into practice.

The similar situation is observed in our case, when the price of a mistake is too high and if you want to make the correct decision, not simply enough to own information, it is important to know also, how correctly to use available data in practice that the automation project was not only successful, but also quickly paid off. And results of its realisation were notable in immediate prospects.

This paper will include the analysis of the case “Bancaja: Developing Customer Intelligence” by F. Asis Martinez-Jerez and Katherine Miller. This analysis will consist of the 7 stages of Business Process Management, where I will include overview of each stage, its goal, deliverables and templates.

Organizations can use Business Process Management to improve all of their business processes. A business process begins with the customer’s needs and ends with the customer’s fulfilment.

Business Process Management is a method of efficiently aligning an organization with the wants and needs of the clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology.

Phase 1-Initiate

Existing situations and issues

In 1996, CEO Fernando Garcia Checa wanted to make customer analytics a part of Bancaja’s new strategy. Bancaja the largest savings bank and financial institution based in Valencia, Spain, was expanding and wanted to exploit customer information to increase commercial effectiveness. At the same time, it was pushing for innovation in the nascent Spanish credit card market. To avoid the considerable investments of time and money that a large-scale customer relationship management project would require, the bank decided to explore its benefits with a smaller pilot project.

It appointed a CRM project team to design and implement a project focused on credit cards. This team of promising with unconventional, non-marketing backgrounds, including Jose Manuel Narciso a business analyst in Bancaja marketing area had to create conditions with full view of the customer and aggregate all the data about a customer in a single.


The organization itself represented large and complex collection of entities due to quite a lot of mergers and acquisitions; as a result the structure was disjointed and new divisions fit were unclear with Bancaja. Corporate Marketing area was populated by former branch managers and dominated by a branch centric mentality.

In the strategic plan, Bancaja was aiming to solve the 3 main issues the organization was facing:

The unity of financial group

Cost efficiency

The segmentations of commercial actions

Often the main challenge for such organisation is not overcoming the physical hurdles of managing multiple and dispersed customer relationships. Decades of hit-and-run marketing practices and a culture that rewards sales rather than repeat customers will often be the biggest problem. An organisation that takes customer relationship management seriously and operates it successfully is one where the customer becomes the central focus for all operations and decision-making.

The structure of Bancaja and its business units must be customer focused. For example, many companies will use a linear organisation chart to describe functions and job speci¬cations. While this is a useful method of presenting information it does tend to reinforce a hierarchical approach. A better alternative is to visualise departments and job functions as interconnecting circles with the customer at the centre. In day-to-day practice this makes it much easier and much more satisfying for the customer to remain a customer.

The effective management of customer information and insight is an essential foundation for CRM programs. Organizations must create a customer information management strategy that defines how to source, govern and leverage customer information and insight assets. To succeed enterprise wide and in the long term, the business, not the IT organization, must maintain effective ownership. Without such a strategy, there will be a glut of unneeded, fragmented or duplicate information, and a lack of accurate, timely and complete information and insight. Lack of a strong customer information and insight capability will hurt the organization (and its customers) in many ways (Herschel & Radcliffe, 2009).

Traditional organizational structure of the bank does not fit under the client oriented strategy. Weaknesses of the present bank’s structure are shown on the following levels:

Bank’s marketing services are structured due to the selected products and the marketing plans are elaborated accordingly without coordination with other bank products though all these plans could be oriented to the same group of clients. Various distribution networks as well as sale of bank’s services and products have the same competitive commercial targets.)

Every bank’s client oriented division concentrates on their ‘own’ operations and on control on their ‘own’ expenses and reluctantly coordinates their activity with other divisions.

Sales report

Bancaja cost position was more in line with the small, traditional bank than with the robust modern bank it aimed to become. So it as another one reason to implement Customer Intelligence in organisation.

Major cost goals of CRM include:

• Increase revenue growth through customer satisfaction

• Reduce costs of sales and distribution

Customer breakdown & Customer touch points

For bank activity presence of a great number of clients – private persons, the enterprises and firms, state and the public organisations demanding operative, personalised service as at reception of the information on bank products is characteristic, and at decision-making on the contract conclusion, reception of consultations, the permission of questions at issue. Bank business with growth of well-being of the population becomes complicated more and more, the quantity of products and services which can be offered the client constantly grows, with the client not one and some divisions even more often work.

One of the basic motives inducing the client to a choice of bank, besides its degree of reliability and advantage of offered financial services is absence of delays in service and operative granting of the demanded information, and also flexibility and accurate understanding of its requirements. The client wants to pay for the qualitative decision of the problems, counting thus on exclusive service that assumes no single, but the long-term, partner relations based on trust with the client.

So the main issues for implementing customer relationship management project was that divisions of bank have no complete and uniform representation about the client: its importance for the bank, consumed products, history of relations etc.; The problem was how to analyse new possibilities for client segmentation with regard to multiple criteria, micromarketing, and scoring expert systems to develop commercial actions.

Phase 2 -Define

In Figure 1 Bancaja divides its Spanish card users into three categories based on gender, age and income:

Figure 1. Credit card users segmentation in Spain

In the customer-oriented mission of Bancaja, one needs to study two interrelated aspects of bank marketing strategy. The first issue is whether the commercial bank can provide the needed banking services to its diverse market segments. The second issue is whether the commercial banks available resources and competencies can match the current needs and expectations of its current market. Hence, it becomes of paramount importance for commercial banks interested in serving their customers effectively to structure their marketing decision variables in an optimum way to form customer relationships.

Knowing profitableness of each client, the bank can draw useful conclusions on raised tariffs, the rests for accounts, expenses for support of the client, expenses for acquisition/deduction of the client, preferences of the client in a choice of channels of dialogue and models of fulfilment of transactions. Having access to key control levers profitableness, the bank can develop purposeful actions for profit increase (Gounaris, 2005). Figure 2 show us the link between CRM and Customer, we see that considering connection among these two core elements are vital for Bancaja.

Figure 2. Link between CRM and Customer

Phases 3&4 – Scope, Analyse & Design

The team responsible for CRM are charged with delivering projects on time, on budget and in scope that deliver a business benefit by aiding in sales, marketing or customer service. They spend most of their time not on the initial selection of technology and consultants, but on the implementation. Their focus is primarily on delivering positive outcomes for the organization, so they need to know about the specific goals of the sales, marketing and customer service departments, as well as the tools that can be used to deliver on those goals. They must also be aware of the next generation of CRM applications.

Process metrics based on lead volume, deal size or quarterly sales growth are important, but they only measure part of the potential impact that CRM initiatives could and do have across the organization. Strategic key performance indicators measure the cross-organizational, companywide impact of CRM initiatives on the organization, but they are more difficult to identify, develop and implement. Strategic KPIs can align operations in marketing, sales and customer support, as well as other parts of the organization impacted by customer interactions – which is to say, the entire organization.

The CRM project team should also take into consideration existing technology factors in order to make decision for using external CRM tool or internal one. The advantage of internal tool is that it can be modified depending on organization needs.

Figure 3. Information Technology factors in CRM

Figure 4. Banking Customer Intelligence Accelerator – Solution Architecture

The proposed solution architecture by Deloitte could be applied to Bancaja as well. This accelerator solution incorporates each component of the transformation process to a customer-centric view. At its core, the accelerator is based on a time-tested Banking Data Model coupled with tools that help populate the model with the institution’s data. With this foundation in place, financial institutions would be able to leverage advanced analytics, predictive modelling, pre-built dashboards, and custom reports, to allow management at the branch, line of business, call centre and enterprise levels to visualize performance and monitor customer behaviour, thereby helping to improve and expand customer relationships.

Analysis or implementation of mini -campaigns for identification of the “optimal” credit card

Conjoint analysis

CRM team desired to measure the feedback of the real clients rather than analysing the traditional survey responses of research subjects.

Mini campaigns

To identify the success of the campaign strategy each customer was offered a single card and the single approval was the choice of the client to buy or not.

The credit card manager selected six attributes for the final mini-campaigns according to her suppositions such as signing fees, annual fees, annual interest rate, mailing/communication, presence of the plastic card, channel.

Each of every attribute contains only two options due to the budget limits. Out of the 64 possible combinations, the team chooses eight representative products. Each of the eight leads to the production of the real card and it is the center of the each campaign. Taking into account three things such as sufficient population, low risk of contaminating customers from other zones and a population that represents Bancaja’s average customers in terms of socio-demographic characteristics, credit card ownership and card usage, the team chose Bancaja’s presence in Albacete.

Management decided to use the entire available population in Albacete for the launch of the mini-campaigns due to the fact that the population not sufficient enough. But another problem was that the any discrepancies in propensity among eight populations could be reflected negatively on data. Thus the team decided to divide the population into eight randomly selected groups and then analyze their propensity to buy. Afterward the results showed that there are not significant differences in propensity and the outcomes are reliable.

The team’s strategy

Thus the team was able to build the successful campaign, identify the ideal credit card as well as validate the ownership model. The aim was to see if the predictive modeling could be used to identify better targets and the team was able to prove that the customer with the close propensity buy better than those with a lesser propensity. With the solid background and insufficient resources, the team understood that there was the risk of getting unreliable data. Using all possible resources and knowledge the team selected eight representative products for the campaigns. Accordingly the population of the chosen region fit to the elaborated model and the project had a great success.

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