COM5407 Financial Communication & Promotion
As the product manager, I propose to employ the data mining techniques, as an important implementation of our Customer Relationship Management (CRM) strategy, to better understand the clients of our third party products and increase our profitability. Our bank has various sorts of third party products ranging from mutual funds, insurance products to bonds. Commission is earned on selling other companies' products. Although the fee amounts are small, they are a valuable contribution to diversifying revenue streams, increasing the mix of non-interest income and also improve profits. However, it is a competitive market because almost all banks and other financial institutions are increasingly turning to these Non-Fund Income products. As a result, the customer relationship management strategy and the data mining tactic are highly necessary to be imbedded. Actually in the USA and Europe, CRM strategy has been implemented among larger companies in financial services and has achieved significant business success. Taking the Spanish Insurer AXA Seguros e Inversiones(AXA) as an example, it is a member of the global giant The AXA Group, with revenues of over €1.8 billion and two million customers. The company once wanted to better understanding its customers in order to be able to make more personalized offers and implement customer loyalty campaigns. So AXA used data mining solution to build a predictive policy cancellation model. The solution thus created profiles and predictive models from customer data which enables more finely targeted campaign management, call center management, sales-force automation and so forth. The model was applied to current and cancelled policies in various offices, and the result was that auto insurance policy cancellation rate was cut by up to 9% than before. The same discipline should be embedded to our NFI products. By data mining the clients who have purchased...
References: 1. Francis Buttle (2009). Customer relationship management : concepts and technologies(2nd Edition). Amsterdam, London. Butterworth-Heinemann.
2. Fitzsimmons, J. A., Fitzsimmons, M. J. (2008). Service Management: Operations, Strategy, Information Technology (6th Edition). New York: McGraw-Hill
3. V. Kumar, Werner J. Reinartz. Kumar, V.Hoboken, N.J. (2006): Customer relationship management : a data based approach. Wiley
Please join StudyMode to read the full document