Steady competition in banking and financial services industry often results in heavy loss to constituent institutions. Competition arises due to factors like market structure, quantity of credits offered, and ownership (public/private). Mortgage crisis and increased defaults also contribute to the rise of competition in banking industry. Overcoming competitive situation and maximizing returns is essential for the development of banking and financial services industry.
Analysis of strength and features and making plans accordingly will help financial institutions for surpass the increasing threats of competition. Here requires the service of a research and data analytics management firm like Market Equations, who performs predictive modeling, market research and financial analysis for clients. Market Equations acts as a leader in rendering research based analytical services for commercial and investment banks, consulting firms, corporations, insurance companies, and asset management firms. Since its commencement in the year 2006, the company is rendering solutions to outperform market competition.
Below is a case study that discusses how research and data analysis of Market Equations helped a large bank in UK, for better decision making process and in proper maintenance of loan data mart.
Client – A large bank in UK
Lack of a proper Decision Support System (DSS) greatly affected bank’s decision making process, since its profit centers are scattered at different locations. The client firm lacks a knowledge support team, to manage their loans in a smart way. The bank offers loans like as personal loan, education loan, vehicle loan, and housing loan. For proper banking functions, analysis of loan amounts, loan types, payment schedules, interest rates, etc must be done periodically and with proven accuracy.
Research & Data Analytics Outsourcing Solution
To overcome the challenges faced by the client bank, Market Equations conducted analysis of their different businesses. Their knowledge team worked with files on loan data and conducted field survey to collect further details. They integrated key data through Extraction, Transformation and Loading process (ETL). Then they built scorecards based on this and helped the company to identify those accounts which had to be targeted for immediate settlement.
- Data integration from different loan departments and scattered locations
- In depth analysis of data
- Compiling and presenting various reports for helping in decision making
A host of scorecards and reports created by Market Equations on loan data (like personal loan, education loan, etc) are mentioned below.
- List reports and Cross tab reports
- Drill-up and drill-down analysis through the data
- Custom reports as per unique needs of the client
- Unit wise testing of reports
All the analytical actions performed by Market Equations had helped the bank in spotting out a sustainable and predictive model for carrying out future operations. Also it helped the bank in identifying customers with increased defaults. As a summary, the actions performed by market equations had resulted in the following benefits.
- Improved recovery-revenue process
- Identified possible NPA Accounts
- Optimized revenue collection
- Reduced collection costs
- Identify ‘good’/no action/auto-resolution accounts
- Faster strategic decision making
The case study mentioned above can be quoted as an example for how research based services for financial institutions especially banks help in ensuring competitive advantage. Encouraging BPM services in data analysis and research, that can add to proper decision making and hence in maximizing returns.