Business challenge

Credito Valtellinese is staking its future on a strategic transformation based on a simple but powerful theme: growth through customer-centric banking.

Transformation

CSS built a comprehensive marketing automation and campaign management solution that the bank is using to deliver precisely targeted promotions to the segments most likely to convert.

Results

10% increase

in outbound marketing campaign conversion rates

2% boost

in incremental revenue through increased revenue per customer

Increased agility and efficiency

by making the marketing department more self-sufficient in performing analytics

Business challenge story

Business challenge

To reposition itself for growth, Credito Valtellinese launched a strategic initiative designed to increase revenue per customer, chiefly by increasing the effectiveness of its cross-selling and up-selling marketing campaigns. The bank recognized that the key to driving more business through its existing customer base was the ability to identify the markers of a high-quality cross-selling prospect and that the bigger challenge was to create a framework for identifying the actual customers that met these criteria. Though the bank’s marketing organization had made efforts in this direction, it always encountered the same basic obstacle: internal systems that were oriented around its product line, not its customer relationships. Credito Valtellinese needed to build the analytical foundation for understanding its customers’ behaviors and needs with a new level of depth and granularity. The easily accessible structured data—the low-hanging fruit—provided relatively little value. The information with the most significant insight value was scattered within the bank’s unstructured customer data sources, which had been impossible to extract and exploit. Lastly, it was essential that whatever new solution and process came out of the project would enable the marketing department to be virtually self-sufficient in the area of analytics. Dissolving the marketing department’s reliance on IT would drastically shorten what had been an unacceptable lag time, one that had made it extremely challenging to seize short-term market opportunities.

“The insights we’ve gained through cognitive technology have been central to our efforts to become a more customer-centric bank.”

—Matteo Pizzicoli, Head of Organization and Enterprise Architecture, Creval Sistemi e Servizi

Transformation story

Cognitive transformation

Under Credito Valtellinese’s operating structure, innovation projects involving IT and business process optimization are handled by its internal service unit, CSS. To build the analytics foundation for a customer-centric business model, CSS engaged IBM Business Partner SDG Consulting Italia S.p.a. and IBM Interactive Experience and Marketing, a division of IBM® Global Business Services® – Business Consulting Services, to implement a comprehensive customer analysis and multichannel campaign management solution. The analytics support component uses cognitive technology to identify, capture and index unstructured, free-text data stored within the company’s mainframe-based transaction record systems, including information on financial or banking products owned by the customer—such as credit cards, loans, mortgages and insurance—that were not issued by the bank, along with online shopping habits and personal financial arrangements. Using natural language processing (NLP), the solution filters this unstructured text data and creates a detailed profile for each customer, storing it in a repository designed with a customer-centric data structure. The multichannel campaign management component of the solution uses these customer profiles and insights in two key ways. They support market segmentation efforts by analyzing customer transaction patterns to design and test more representative segmentation models, and they target multichannel outbound marketing campaigns. The net functional gain for the marketing department employees is the ability to run sophisticated cognitive analytics on their own—without IT assistance—against a reservoir of valuable unstructured data that had been effectively off limits. Further, this means marketers have essentially no limit to their ability to define the granularity of their target segments.

Results story

Quantifiable benefits

As conceived, the project created a foundation for the bank to deliver more targeted and effective outbound marketing campaigns to its existing customer base. Since deploying the solution, CSS helped the bank increase the conversion rates for its outbound marketing campaigns by an average of 10 percent, representing an estimated 2 percent of net-new revenue growth. The solution also increased the agility and efficiency of the marketing department by making it more self-sufficient in performing analytics against customer data.

The Credito Valtellinese solution is game-changing because it uses NLP technology to identify valuable pieces of information within large volumes of unstructured customer data that were impossible to isolate and extract before. This enabled the bank to vastly increase the precision of its market segmentation and targeting efforts, with commensurate improvements in conversion rates.

Prior to the project, the marketing department was fully dependent on the bank’s internal IT organization to run analytics against its customer accounts databases. In addition to being a slow process, the scattered, product-centric orientation of the data made it next to impossible to extract deep insights that could be put to work in marketing campaigns. The new cognitive solution essentially breaks the barrier to identifying insights by using NLP to identify and index the data in a way that supports customer-centric marketing.

The solution employs both structured and unstructured data from internal sources within the bank, principally the company’s core banking systems and customer account activity databases.

About Creval Sistemi e Servizi

Based in Sondrio, Italy, Credito Valtellinese is a retail bank with over 500 local branches, approximately 4,000 employees and assets of USD 28.6 billion as of 2015. The bank’s customer base mainly comprises households, small and midsize businesses, artisans, professionals and nonprofit organizations. Creval Sistemi e Servizi (CSS), a fully owned subsidiary, provides a range of services in areas such as IT, banking process optimization, back-office operations and real estate to the bank and the broader market.