Teradata introduces first CRM solution targeted at addressing financial institutions` core deposit retention

Teradata, a division of NCR Corporation and Cohen Brown Management Corporation, Inc have introduced Retention Manager, the first customer relationship management (CRM) solution leveraging the combination of technology with consulting and behavioural training services to address core deposit growth and retention.

Teradata is a division of National Data Systems (NDS), exclusive representative of NCR in SA.

"Financial institutions have proven their abilities at bringing core deposits in the front door. However, the net results are often disappointing when customers leave as abruptly as they came," says Simon O` Hagan, general manager of the Teradata Solutions Group at NDS.

"Retention Manager builds the next dimension of CRM to `close the back door` by identifying, understanding and effectively responding behaviourally to `at risk` customers."

Although customers will close accounts in branches or call centres, the majority of defections are "invisible," as clients simply write cheques or make electronic transfers that are not immediately visible to the bank. As a result, critical and timely actions cannot be taken to retain customers and their deposits.

"Without making the cultural and behavioural changes in the organisation, this `guilt-free attrition` will only intensify as the technological revolution progresses," says Martin L Cohen, MD, chief executive officer and co-chairman of Cohen Brown Management Group.

"Retention Manager combines the leading-edge technology with CBMG customer insight and appropriate behavioural response to give bankers the opportunity to effectively intervene at the point of need, essentially the precise point of opportunity or risk for the institution. The result is that the bankers will have the capability to protect the value of the existing customer base and acknowledge these relationships as fundamental to profitability, as their deposits remain the cheapest source of funds for lending and maintaining regulator-required capital ratios."

Teradata and Cohen Brown successfully used the technology and consulting services currently employed by Retention Manager to assist one of Australia`s leading financial institutions to achieve its growth objective. Using these solutions, the bank discovered that 20% of total leads sent to sales channels are event-based while 80% are marketing campaign-focused. The event-based leads generate an unexpected 80% of the total revenues resulting from outbound calling efforts by sales staff.

Within the initial phase of operation, April 1999 to November 2000, the bank generated approximately A$400 million in additional revenue. Today, the bank deploys the technology in its business leads program and, in the first six months of its 2001 fiscal year, generated over 570 000 new leads, resulting in A$4.4 billion of new loans.

As customer account activity is routinely processed nightly, Retention Manager examines each customer`s banking behaviour to detect and identify the clues of potential core deposit outflows. Retention Manager instantaneously "discovers" and collects the information in a usable report and gets it in the hands of the business manager, private banker, call centre or the local branch manager the next morning. With this timely information, bankers can proactively contact "at risk" customers within 24 hours from the identification of the defection clues and have an informed discussion to head off the potential deposit loss and to explore ways to expand the existing relationship. The software has the capability to allow the bank to respect the wishes of a customer who decides they do not want to be contacted regarding marketing or other offers.