Banking & Financial Services

Analytics in banking and financial services companies broadly falls into two areas: regulatory compliance, and marketing. Both of these areas involve understanding the customer, and banks have a rich set of information to make this possible.

The main use of analytics in banks is for marketing-focused applications: acquisition and retention, campaign management and optimization, propensity modelling, including market basket analysis, and so on. These type of activities are the basic tools of analytics, and we can help you with any aspect, from customising a methodology to your specific needs, to running the analysis for a particular deliverable.

The other side of analytical activities is centred around regulatory compliance. The Basel II accords put strict requirements on banks regarding the calculation of risk for their various areas of activity, and how much capital they must put aside to mitigate this risk. This included the need to follow formal methodologies for risk modelling and model validation. Basel III has extended these requirements and placed more pressure on organizations that had barely developed processes for Basel II.

In our experience, one of the challenges is that the process from developing or refreshing a model to when it is implemented can be too slow, in some cases up to several months. In a changing and dynamic environment, risk is being calculated on how the world was, rather than how it is now, or will be next month. We can help streamline and automate this modelling and approval process, while still meeting regulatory requirements.