White Paper

Analytics: The Winning Formula

for Financial Services
One way to manage costs is Introduction
to update aging analytic With the global financial crisis of 2008 a distant memory, most casual observers
infrastructures. Experts estimate would conclude that all is fine in the banking world. But while the financial sector
the cost of managing legacy is more stable now than in the past few years, the 2008 crisis left significant scars,
infrastructures at 7 to 10 percent especially in terms of increased regulations and shaken customer trust.
of a bank’s operating income, New regulations have not only capped the amount of revenue banks can generate
mostly due to decades-old custom by restricting fees and charges for a wide range of traditional banking activities,
code residing on a mainframe and they’ve also increased the cost of compliance, requiring banks to maintain higher
the scarce, expensive IT resources operating capital, which impacts profitability.
and specialized programmers
What’s more, customer behavior and expectations have changed, increasing
required to make it usable. pressure on banks everywhere. On the one hand, consumers are spending less
and saving more, negatively impacting major sources of income for banks,
such as credit card fees. On the other hand, consumers expect more from
their banking institutions of choice—faster, better service; an omni-channel
presence; and lower fees—increasing banks’ costs. Worse yet, consumers today
are very vocal about their views, eager to applaud or shame their bank on
social media.

If you’re like most banks, you know you must adapt quickly and seamlessly to
these pressures in order to pull ahead of the pack. What’s likely less clear,
however, is how you can do this.

In this paper, we’ll show you how to gain a competitive advantage by embracing
self-service data analytics.

STEP
1 Challenge the Status Quo
While you, along with most of your peers, know the value of data
analytics, you are hamstrung thanks to aging analytic infrastructures. You likely
have a massive IT department with hundreds of specialized programmers,
but your data is locked up in cobbled-together, legacy silos—a different one
for each product line or line of business (LOB). These expensive, IT-dependent
infrastructures simply don’t lend themselves to the increased agility and
speed-to-insight you need to compete in today’s business environment.
What’s more, despite legions of programmers, you likely still don’t have enough
analytical resources, limiting your data-driven decisions to a few select projects.
To achieve agility, consider freeing up your analysts from the limitations of
legacy architecture.

STEP
2 Empower Analysts with Self-Service Data Analytics
Making decisions quickly is critical to business success. Customers
have access to unprecedented amounts of information and choices, so how
fast you respond to their demands and to changing market trends can have
a huge impact on your customers’ satisfaction and your image as a responsive
financial services provider.

Enabling your line-of-business users with flexible and powerful analytic

solutions that allow them to quickly access and process data, without
waiting for IT or specialized programmers, can help you not only support
timely decisions, but also apply data-driven decisions more widely across
the organization.

2
 STEP
3 Adopt Analytics Across the Organization
For the greatest impact, you need to make analytics a part of all
decisions, not just those pertaining to a few select projects. Implementing a
self-service data analytics solution can give your LOB users the tools they need
to answer even the most complex business problem themselves—without
burdening your already overextended IT department—making analytic
thinking pervasive across the organization.

How Can Self-Service Analytics Help Your Business?

Here are three key areas in which analytics can help your organization be more
“One of the most beneficial things competitive, as well as examples of financial institutions like yours that have
seen significant gains after empowering their analysts with self-service analytics.
I have been able to do with Alteryx

is ... analyzing our unstructured FOCUS

1 Customer Experience and Engagement
Customers today demand a consistent, quality experience
survey data using Alteryx from their financial service providers as they move from channel to channel
and product to product.
analytics tools and data blending

capabilities. Before Alteryx, Data preparation, blending, and analysis can help you delight your customers
with improved engagement through deeper insights. Start with:
we had teams of people reading
• Building a single, consistent, multidimensional view of the customer.
data line by line, which was Your data resides in multiple systems and sources. Worse yet, it is stored using
disparate data entry protocols, making these various systems incompatible.
very painful. With Alteryx, Data preparation and blending capabilities can help you cleanse and
standardize data to help you overcome silos so you can access all your
it is all automated.” customer data, including call center, branch, ATM, mobile, product usage,
loan, demographics, and more.
Bob Bulkley, Manager, Reporting
& Analytics, Western Union Further, third-party data can help enhance your internal data. Enriching
your internal customer data with segmentation, attitudinal, location,
household, and other third-party information can help you create a single,
multidimensional view of the customer that you need to provide consistent
service and support.

CASE STUDY
A multinational bank is using Alteryx to provide self-sufficiency to its data
analysts so they can access and blend five billion rows of customer and
transactional data from eight different systems across product lines and lines
of business for a complete view of the customer. Using insights from customer
in-branch and online activities as well as call center interactions, the bank
is optimizing its distribution centers, adjusting call center service procedures
and policies, and identifying dissatisfied customers at risk for attrition.
The result? Better branch placement and opening/closing decisions and
improved customer satisfaction and retention rates.

• Segmenting customers and personalizing interactions. Consumers have

short attention spans and little patience for companies that don’t understand
their preferences or market to them appropriately. By segmenting customers
based on transaction behavior, demographics, life stage, and other attributes,
you can identify those with the most revenue potential and create offers
and marketing programs relevant to them, thus personalizing interactions
and increasing engagement.

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 CASE STUDY
A large U.S.-based financial service institution specializing in retirement and
investment products is using Alteryx to blend and enrich the retirement plan
data for its five million members with third-party and consumer demographic
and behavior profile data. Using the clustering and A/B testing capabilities
within the solution, the company segmented its customer base and tested
messages and images with its highest value segments. Based on the insights,
the company updated web images and content on its online channel,
resulting in an increase in web stickiness, nearly 8 percent improvement in
click-through rates, and an almost 1/2 percent increase in conversions.

• Expanding relationships and re-engaging dormant customers. Research

shows that, on average, consumers subscribe to 6.1 financial services products,1
but rarely with only one provider. Using market basket and customer product
portfolio analysis, you can identify cross-sell and upsell opportunities for
more relevant products and promotions, thereby expanding the customer
relationship. And since customer acquisition costs are significantly higher than
the costs to retain a customer, you can use analytics to identify at-risk customers
based on changes in transaction activity levels, increase or decline in account
balances, call center interactions, and more, and use these insights to prioritize
high-risk, high-value customers.

FOCUS
2 Risk Management and Compliance
Banking is all about balancing risk and reward. Many high-risk
customers or investments may generate higher margins, but they also present
higher chances of default. In addition, higher portfolio risk means higher
capital reserves for regulatory compliance, leaving less capital for investment.
Conversely, too little risk means skipping over solid income opportunities—
and associated potential profits. But how do you accurately gauge overall risk
exposure and strike the right balance when different lines of business manage
their risk/reward data separately and use different standards and metrics to
evaluate and report risk?

By enabling LOB analysts with self-service analytics, you can comprehensively

assess and mitigate risk and improve regulatory compliance. Start with:

• Comprehensively assessing and optimizing risk exposure. By accessing,

preparing, and blending disparate risk data—credit, internal ratings, payment
history, etc.—and enriching it with third-party credit ratings and scores,
consumer demographics, and firmographic data, you can better understand
the risk and profitability potential of a customer, a business, or your overall
asset portfolio.

• Minimizing fraudulent activity. Fraudulent activity by employees, third-party

authorized agents/partners, or customers can all present significant financial
and reputational risk. According to The Nilson Report,2 credit card fraud alone
cost banks $16.31 billion in 2014—and is estimated to reach $35 billion by
2020. Add to that the cost of other types of fraud, including deposit account,
debit card, online and electronic banking, and wireless money transfer fraud,
and you are looking at formidable losses. Predictive analytics can help you
quickly trace suspicious activities and recognize fraudulent associations
among customers, employees, or other entities, all while minimizing false
positives, so you can proactively address emerging threats and strengthen
your security and fraud prevention efforts.

1 “When the Growing Gets Tough: How Retail Banks Can Thrive in a Disruptive, Mobile, Regulated World,”
PwC Financial Services Viewpoint, March 2011, www.pwc.com/fsi
2 The Nilson Report, August 2015, www.nilsonreport.com 4
 CASE STUDY
The information security team of an American financial services institution
wanted to determine the risk potential of its more than 500,000 agent
locations to prioritize security services implementation. The assessment
process, which involved evaluating each location based on individual risk,
fraud history, and transaction limits, required an unsustainable amount
of time (more than 100 hours each month). Using Alteryx, the company
was able to create a comprehensive risk analysis and reporting model in
approximately two and a half hours and execute the analytics in about five
minutes, significantly reducing the time for risk evaluation. What’s more,
the company used the resulting time savings and better insights to gain
“With Alteryx, we have been able executive support and convert the proof-of-concept project into a full-
fledged program and department focused on risk analytics.
to reduce our business reporting

process time from one to five

• Maintaining regulatory transparency and accountability. To achieve
days to under five minutes every compliance with the ever-growing alphabet of regulations, including
Home Mortgage Disclosure Act (HMDA), Fair Credit Reporting Act (FCRA),
month, which is an incredible and Equal Credit Opportunity Act (ECOA), you need an analytics solution that
allows you to assess risk and provide transparency and auditability of the
productivity increaser.” entire analytic process to facilitate oversight by both internal auditors and
external regulators.
Samuel Thomas, Sr. Business Information
Analyst, Capital Group Companies

CASE STUDY
A large multinational financial services institution is using analytics to
forecast near-term demand for derivatives to comply with the Volker Rule,
which puts restrictions on banks from making certain types of speculative
investments that contributed to the 2008 global financial crisis. Using Alteryx,
the bank not only succeeded in analyzing data and adjusting investment
positions in a fraction of the time it would have taken using manual methods,
but also was able to capture the entire process of analysis in a transparent,
easily auditable workflow for compliance review.

FOCUS
3 Operational Efficiency and Innovation
Facing high compliance costs and operating expenses as well as
explicit caps on certain sources of revenue, you must develop innovative
products and services to create revenue sources while finding ways to reduce
operational expenses.

Analytics can help you increase revenue streams and minimize operating costs by:

• Identifying new opportunities. Market trends, customer behavior, and

economic indicators can be a window into emerging areas of opportunity that,
when acted upon promptly, can generate new revenue streams. For example,
aging demographics and increasing numbers of women in the workforce
provide incremental revenue opportunities to financial institutions that offer
relevant retirement and investment options and services. Analytics can help
you identify these hidden patterns in your data ahead of competition for
first-mover advantage.

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 CASE STUDY
A global financial research and information provider is using Alteryx to
perform market basket analysis to better understand which products and
services sell better together, which cause time-lagged lift in demand,
and which cannibalize sales of other products. Combining these market
basket insights with customer segmentation data, such as buyer aspirations,
life stage, and other attributes, the company is developing new services
About Alteryx and product bundles for cross- and upsell opportunities.

Alteryx is the leader in self-service data

analytics. Alteryx Analytics provides • Standardizing best practices and automating processes. Custom-coding
analysts with the unique ability to easily repetitive tasks or instituting different practices in different lines of businesses
prep, blend, and analyze all of their for similar tasks not only wastes valuable time, but also creates operational
data using a repeatable workflow, then inefficiencies, such as reliance on specialized programmers to create, maintain,
deploy and share analytics at scale for and refresh code. Using an analytics solution that allows you to save best
deeper insights in hours, not weeks. practices–based workflows can help standardize procedures and automate
Analysts love the Alteryx Analytics previously tedious data manipulation and reporting tasks. This means your
platform because they can connect to analysts can focus on more strategic value–added tasks rather than getting
and cleanse data from data warehouses, bogged down by repetitive activities.
cloud applications, spreadsheets,
and other sources, easily join this data • Improving decision velocity. Frontline employees are under increasing pressure
together, then perform analytics— to make critical decisions that can impact customer loyalty and your overall
predictive, statistical, and spatial— competitive position. Deferring decisions and escalating to higher-ranked
using the same intuitive user interface, employees is no longer an acceptable practice for your demanding customers.
without writing any code. Thousands By creating and sharing pre-built workflows as parameterized apps, you can
of companies and data analysts empower your frontline personnel to run ad-hoc analyses to make faster
worldwide rely on Alteryx daily. decisions and improve customer relationships.
Visit www.alteryx.com or call
1-888-836-4274.
Summary
You know that moving quickly to meet customer expectations is a strategic
imperative. But determining the right plays to stay ahead of your competition
is not so simple. Vast amounts of data come your way each day. How can you
sift through the mountains of information for the nuggets that will actually
help you pull ahead of the pack?

By embracing self-service data analytics with Alteryx, you can easily prep, blend,
and analyze all data using a repeatable workflow, and then deploy and share
these analytics with others in the organization, enabling you to answer complex
business problems. What’s more, you’ll be able to gain faster, deeper insights
from data without burdening your already overextended IT department.

See how Alteryx can help you today. Visit www.alteryx.com/financialservices

for more details.

230 Commerce, Ste. 250

Irvine, CA 92602
+1 714 516 2400
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