 |
Bancomer and Innovative Make
Data Quality a High Priority |
|
| As the largest bank in Mexico, with US$23.5 billion in assets and 1,245 branches throughout Mexico, Bancomer provides a wide range of banking services - from retail to corporate to government banking. Bancomer's parent company, Grupo Financiero Bancomer, provides insurance, brokerage, and retirement funds, as well as other financial services. A large entity in its own right, Bancomer serves over eight million customers and almost 20 million accounts, and acquires an average of 189,000 new customers per month. In addition, Bancomer cross sells 442,000 new accounts per month to existing customers. The bank credits this growth to its tireless focus on its customers' needs. |
|
The Challenge
Bancomer knew that in order to maintain its leadership position, it must know who its customers are and continuously provide superior service to them. |
|
| Bancomer made the decision to transform its customer database from a back-office tool to a valuable asset available to the front line. This strategy allowed employees in the branches to have access to customer account information in real time. As a result of this initiative, Bancomer was one of the first banks in Mexico to have the ability to give customers their checks immediately when they opened a checking account. While this was a major accomplishment for Bancomer, it left the database extremely vulnerable to data contamination. Branch employees could now make any change they wanted to the customer database. In addition, the database was constantly receiving new customer records from external sources, like electronic payments, and massive corporate accounts were being opened. |
|
| Bancomer then installed a new informational or decision-support database. This new database enabled the bank to determine which of its customers were profitable, and which were not. Armed with this information, Bancomer could then implement a customer relationship management strategy. Once again, however, the data was defenseless against contamination. The millions of records Bancomer needed to convert to this new database were extremely susceptible. |
|
Data Quality: A Critical Foundation
Top executives at Bancomer knew that it was critical that the data be accurate and up-to-date from the onset or the initiative would fail. An internal culture change was also needed to ensure that this data remained accurate when employees input new data into the database. This was a project to be left to the experts. |
|
Bancomer Turns to the Best in the Business
After carefully considering four data cleansing providers, Bancomer chose Innovative Systems to help with the monumental task of cleaning its customer data and of transforming Bancomer's corporate culture to one that was data quality-conscious. |
|
| "Innovative provided the most robust solution of all the vendors — it was the only company that could provide us the flexibility we needed to analyze and review our customer data and make it as accurate as possible," says Fernando Arévalo Marín, subdirector, corporate customer information. Bancomer also chose Innovative because of its consulting expertise. "Merging the data was a huge process. Innovative's experts were able to come in and help us make this process as painless as possible. The project took much less time than it would have if we had tried to do it ourselves," he added. The combination of Innovative's hands-on consulting expertise and powerful data cleansing and linking capabilities, coupled with the high productivity rate of Bancomer's name and address specialists resulted in the project being installed and completed in an extremely short period of time. |
|
| Using Innovative's data cleansing and linking capabilities, Bancomer linked, scrubbed and standardized over 8 million records. Before these tools were installed, Bancomer's retail banking division had a 27% rejected mail rate on its statements. After the installation, the results were dramatic — the returned mail rate was reduced to only 3%, saving the bank US$450,000 in postage for duplicate mailings and returned mail. Bancomer also saved an additional US$300,000 on reduced technical resources including processing time, disk space, and human resources. Bancomer's executives had hoped to reach their return on investment for the entire project within 39 months. They were thrilled when they saw a complete return within 19 months. Innovative's linking capability eliminates erroneous and misleading duplicates by linking customer and prospect records. It prevents a database from becoming corrupted by: |
|
• |
|
Data entry errors, such as name misspellings, character transpositions, and missing information |
|
|
|
• |
|
Individuals providing variations of their name, such as nicknames, or address |
|
|
|
• |
|
Different entry standards for different areas in an organization |
|
|
| Using Innovative's data quality capability, Bancomer could add customer or country-specific words and phrases to Innovative's Spanish-word dictionary that drives the product. "The product was so flexible, we were able to fine tune and customize Innovative's data cleansing components. Now I am able to distinguish between the word 'nino' and 'niño'. Although a user may recognize these as two different words, it may not be distinguishable by a software system. Innovative's system gave me the flexibility to enter the two words and now they can be recognized as two different words," says Mr. Arévalo Marín. "The other technology that we considered provided a "clean and dump out" service — no flexibility," he added. |
|
| Innovative's data cleansing feature houses over 500,000 Spanish word patterns, more than any other data quality system of its kind. It also has the highest accuracy rate for complicated name and address structures that are prevalent in Mexico. With versions of dictionaries representing more than 30 different countries, it continues to add new words all the time. This one-of-a kind knowledgebase has been compiled by Innovative over more than 30 years of customer information processing experience for multiple industries worldwide. Innovative’s data quality capability: |
|
• |
|
Identifies customers and relationship information within
a company's data, even when words are misspelled or incorrectly entered |
|
|
|
• |
|
Flags data inaccuracies and ambiguities within a data
warehouse or customer database |
|
|
|
• |
|
Can be customized according to a company's data conditions and matched to a company's specific business rules |
|
|
Once the data was cleaned, Innovative consultants then began the task of convincing Bancomer employees that it was important to keep it clean. Acting upon the advice of Innovative's consultants, Bancomer's top executives set a mandate that each branch of the bank was responsible for keeping its data accurate and up-to-date. Every branch is now monitored on a regular basis, and if the branch's data quality is low, that branch is penalized. Through this initiative, Bancomer employees now look at data quality differently. Innovative's consultants helped employees realize that poor data quality translates into
lost dollars. |
|
Transforming Information into Knowledge
With this new, clean data and the knowledge that 4% of its customer base makes up 60% of its profit, Bancomer's retail division, which makes up 80% of the bank's customer base, implemented a new marketing strategy. A major initiative in this strategy was to turn its customer information into knowledge and the knowledge into action by implementing a preferred customer program. Bancomer's most profitable customers became members of a preferred customer list. Bancomer needed an accurate view of who their most profitable customers were in order to implement this loyalty program. |
|
Dramatic Results
As a result of the program, Bancomer got to know its customer base better. Its customer retention rate has increased significantly. After the program was implemented, Bancomer saw a dramatic reduction in lost customers from the previous year. Armed with new and accurate knowledge about its customers, Bancomer is now able to implement successful programs to recover the few customers they did lose. "This change in our retention rate happened within a year. When you have clean customer information, your marketing strategies happen quickly — it's amazing," says Mr. Arévalo Marín. Bancomer's customer base also increased from 60,000 to 110,000 preferred customers in one year's time. This incredible success is due solely to a cross-sell campaign that would not have been successful without accurate data. |
|
| Bancomer then segmented its customers — the right product to the right customer, at the right price in order to satisfy customer needs. Again, this would have been impossible without clean, accurate data. "All of our information could not be converted into knowledge if we didn't have data accuracy — that's a fact," said Mr. Arévalo Marín. "Our customer information database is our most important asset — without data quality, we lose that asset, it's that simple," he added. |
|
|
|
