FNB Optimizes Retail Banking

Product Offers
Using Real-Time Propensity Models, Rules and Events

Avsharn Bachoo- FNB

First National Bank
The oldest bank in South Africa formed in 1838
Listed on the South African Stock Exchange and the Namibian Stock Exchange
One of the largest financial institutions in South Africa
Providing banking and insurance to retail, commercial, corporate and public
sector customers

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Product Sales Initiatives
Proactive sales, service and prospecting system.
Used to assess the eligibly customer base for a variety of
product offers,
value adds, and
service related messages.
The process caters for both a fully automated eligibility process via
mainframe leads process,
adhoc load capability.

3
FNB BIG 3 model using traditional CRM (2004-2008)

Find leads
using Communicate
Determine statistical (call centre, 1-5%
product offer methods letter)
(1-5%)

4
FNB BIG 3 using triggers and automation (2008-2016)

Find Leads
Select offer
using
using Communicate
customer
statistical (SMS, Email, 1-15%
activity
methods call centre)
(triggers)
(15-45%)
(5-15%)

Propensity model
Next best offer
Next best action

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Determining who, what, how

1. Event 2. Data
Legacy
3. Balance
Extract Staging Extract Rule Engine
Mainframe

4. Internal 5. Diarised 6. Rule

Event Event Base Call Leads batch
Daily

scoring

A file that contains

7. Post 8. Whom to target
Rules Enactments Which product
Through which channel
Mainframe
Monthly

Monthly
Data
6
Integrating decisioning capabilities
Domain with engine

Legacy
Rule
Mainframe
Mainframe Engine
JCL call to DA Business rules
Java API Policy Rules
JMS
SOA/Web Service call
Enterprise Service Bus

7
Limitations
Legacy rule engine not integrated into mainframe and no direct link to
warehouse
Insufficient computing power to process information daily

Legacy
Developers Mainframe
Engine

30 day data gathering

2 day-long batch scoring
Data
warehouse

8
Adding propensity scores

Complex analytical processing of billions of records requires

significant amounts of computing power

9
Limitations
Customer needs change on a daily basis
Updates to customer information takes place monthly
Propensity scores derived monthly
Missing the window of opportunity for getting offers to the customers at
the right time.

10
Business Expectations
Enable decisions to be made
real-time
leveraging of
internal models,
advanced statistical models &
predictive analytics

Right Product @ Right Place & Right Time

11
Technical expectations
Aggregate large volumes of data and derive variables
Adaptive to seamlessly fit into the existing complex FNB architecture
Solution needed the capability for current and future integration into
FNBs
Warehouses
Data mining systems

12
 Selection Criteria

Product Technology environment Interface Seamless Integration with

FNB mainframe

FICO Blaze Advisor JVM or .NET Proprietary API or Web Message switch
Service
IBM ODM zOS, JVM Cobol, XML and JAVA API Direct

Jboss Enterprise BRMS Jboss Middleware JAVA API Message switch

Apama JVM or .NET JAVA, C, C++, .NET Message switch

Experian Powercurve JVM JAVA, C Message switch

SAP NetWeaver JVM JAVA, ABAP Message switch

Oracle Business Rules Oracle Fusion Middleware XML, JAVA or Oracle Message switch

13
FNB BIG 3 using ODM and Netezza 2016-future

Find leads
using changes Right time
Optimise
in Customer communication
Leads
activity to customer
(Events)

14
FNB BIG 3 using ODM and Netezza
Scenario: Sam has $1m deposited into his account

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FNB BIG 3 using ODM and Netezza
We can easily detect this, and determine that this is significant for him.
So what do we offer him?
now it becomes difficult. There could be many reasons why Sam
received this money. E.g., inheritance, bonus, tax refund, sale of a
house etc
many things Sam may intend to do with this money, e.g. Start a
business, invest, buy a house, buy a car

As there are different things Sam could do, there are many different
offers, e.g. investments, a housing loan, shares, a business loan, etc.

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FNB BIG 3 using ODM and Netezza
What offer do we make and when?

Statistically, we would offer him an investment

but this could be the incorrect product
he may actually want a home loan as the $1m deposit was
proceeds of the sale from his old house

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Delivering through an event-driven architecture

Mail
Systems of Insights
Web Social

Systems of Eve Detect Situational Predictive

ATM
Engagements nt Decide Awareness Models

Systems of Records
Mobile IoT

Branch

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 Combining rules and analytics
Operational Decisions Netezza
(z / cloud / distributed) Analytics
Timely event Systems of Records

event

Business Situational
Interactio Awareness
n

Predictive
Scores
transaction

Automated
Instant decision Services

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FNB BIG 3 using ODM and Netezza
Conceptual Architecture
Aggregate customer base information
Cleans information
Apply models to daily information
Produces scores
Dump scores

Rules filter customers & products

Makes recommendations, bundling
products
Decide when & how (channels)
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Seizing opportunities through situational awareness
IBM Decision Server Insights
Decision Management in context
Channels

Hundreds
Hundreds of
of
Aggregates
Aggregates
Servi
ce
Millions of
interactions Thousands Rule
Thousands
of Rules
of Rules
Process

Dozens
Dozens High fidelity,
of
of Models
Models granular actions
Loan Applicant

Millions of Customers

Applying Insights to simplify creating personalized,

customer-specific actions at the time of interaction

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Four Steps toward decision making in context
Processes Business
Business Events
Events

Social Media

System of Records

Data Warehouse

Sensors

Information Bus

System of Engagement

Mobile Devices

Situation
Situation Detection
Detection &
& Action
Action
Running IBM ODM on a wide range of solutions
Cloud Appliances Mainframe Distributed

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Expected Benefits
Make offers at the right time
Improve relationship with customers
Increase likelihood of sales by offering tailored products geared to
specific customer needs
personalized offers to the customer
Continuous improvement by
analyzing customer data,
monitoring transactions,
determining patterns
to make the right offer at the right time in a dynamic fashion

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Lessons Learnt
Technical:
No major issues experienced
Compatibility issue: ODM and Netezza ran different versions of Java
Business:
No yardstick to plan effort
More focus on Java skill set for new recruits

25
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