Turning Informa4on Into Ac4on … and Growth · 2017-01-10 · Growth Isn’t Easy 5 Challenges •...

Proprietary/Confiden0al

OpportunityAnalysisTurningInforma4onIntoAc4on…andGrowth

©2016HarlandClarkeCorp.Allrightsreserved.

Today’sPresenters

Photo Here

StephenNikitasSeniorStrategyDirectorHarlandClarke•  30yearsexperience,includingseniorexecu0veatfinancialins0tu0onsinNewYork,CaliforniaandMassachuseKs

•  LoanporMolioandaccountholderreten0onspecialist

2

AndrewHuberProductManagerMarke0ngServices,HarlandClarke•  10yearsoffinancialindustryexperiencewithextensiveknowledgeinproductmanagement/development,businessdevelopment,anddataandanaly0cs

YourModerator:

WhatWeWillTalkAboutToday

•  FinancialTrends

•  OpportunityAnalysis:GainingKnowledgeandInsights

•  BuildingthePlan:PuXngDataToWork

3

> > > FinancialTrends

4

GrowthIsn’tEasy

5

Challenges•  Reducedpersonaldebt;delayedpurchasing•  Changingconsumerbehavior•  Cau0ouseconomy,crazystockmarket•  Increasedcompe00on(P2P,Fintech)•  PorMoliochanges•  Mortgagepurchasevs.refinance•  Autoleasing

Opportuni4es•  Homesales/prices•  Autosales•  Personalloans•  Lowunemployment•  Deposits/reloca0ons

Solu4on:Minimizethedownturns,maximizetheupswings

©2016HarlandClarkeCorp.Allothermarksarethepropertyoftheirrespec0veowners.Allrightsreserved.

®

®

NetInterestMargins

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

Q119

84

Q119

85

Q119

86

Q119

87

Q119

88

Q119

89

Q119

90

Q119

91

Q119

92

Q119

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Q119

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Q119

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Q119

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Q119

97

Q119

98

Q119

99

Q120

00

Q120

01

Q120

02

Q120

03

Q120

04

Q120

05

Q120

06

Q120

07

Q120

08

Q120

09

Q120

10

Q120

11

Q120

12

Q120

13

Q120

14

Q120

15

Q120

16

HistoricalNetInterestMargins

Source:FederalFinancialIns0tu0onsExamina0onCouncil6

NIMsfallbelow3%

EfficiencyRa4os

64.62

61.16

61.8 61.45

62.8862.26

60.94

59.75

60.7860.27 60.06

57.95

54

56

58

60

62

64

66

Q32013 Q42013 Q12014 Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 Q42015 Q12016 Q22016

HistoricalEfficiencyRa4os

Source:BankRegData.com7

> > > OpportunityAnalysis:GainingKnowledgeandInsights

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Preven4ng“AnalysisParalysis”

•  Provideskeyinsightandinforma0ononclient’sporMolio

•  Iden0fiesopportuni0esandrisks

•  Includesproductanalysisandindustrybenchmarking

•  Providesac0onablerecommenda0onsandperformancemeasurement

9 Stratics is a registered trademark of Harland Clarke. ©2016HarlandClarkeCorp.Allrightsreserved.

ProductBenchmark:LoansandE-Services

7.326%

1.60%

6.5%

0.9%

4.5%

1.5%

4.3% 4.0%

2.0%2.8%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Auto Mortgage EquityLine EquityLoan ConsumerLoan

PercentofClientswithLoanProducts

YourFI

Industry

Illustra0veproposesonly.10

44.9%

13.9%

58.3%

37.6%

12.7%

51.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

OnlineBanking BillPayer DebitCard

PercentofClientsw/E-Services

YourFI

Industry

19.6%

16.0%

14.7%14.3%

15.3%

9.2%

4.8%

18.6%

12.6%

11.2% 10.2%

10.0%

7.3%

4.3%

0%

5%

10%

15%

20%

25%

Iyr 2yr 3yr 4yr 5yr 6-10yrs 10+yrs

AKri0

onRate

AKri0onbyLengthofRela0onship

YourFI Industry

Acri4onBenchmarks:Rela4onship

Illustra0veproposesonly.11

AccountHolderOverview

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ABCBankNewCustomers IndustryQ3NewCustomers

Size/Scope Size/Scope numberofhouseholds 26,100 percentageofallhouseholds 13% percentageofallhouseholds 8%percentageofalldeposits 14% percentageofalldeposits 5%percentageofallloans 5% percentageofallloans 5%averagebankingrela0onship $30,800 averagebankingrela0onship $18,200averagedepositrela0onship $32,900 averagedepositrela0onship $14,700averageloanrela0onship $7,500 averageloanrela0onship $26,800averagenumberofacctsperhhld 2.3 averagenumberofacctsperhhld 2.2 Demographics Demographics AverageAge 47 AverageAge 43AverageHouseholdIncome $64,400 AverageHouseholdIncome $60,200HomeOwnership 67% HomeOwnership 41% ProductUsage

%ofhhldsinsegment

averagehousehold

balance

ProductUsage%of

hhldsinsegment

averagehousehold

balanceDeposits DepositsChecking 66% $5,300 Checking 59% $4,100onlinebanking 0% onlinebanking 36%BillPayer 10% BillPayer 9%DebitCard 60% DebitCard 52%Savings 27% $2,100 Savings 23% $8,000MoneyMarket 12% $64,300 MoneyMarket 4.5% $58,500CD 13% $109,600 CD 3.9% $78,800IRA 1.6% $65,100 IRA 0.7% $40,800Investments 1.9% $0 Investments 1.8% $78,100

Loans Loans CreditCard 13% $4,300 CreditCard 3.8% $1,800ConsumerLoan 0.18% $15,200 ConsumerLoan 5.6% $22,500Autoloan:Direct 0.07% $15,200 Autoloan:Direct 0.7% $16,100Autoloan:Indirect 0% n/a Autoloan:Indirect 11.3% $17,800HomeEquityproducts 0.9% $44,800 HomeEquityproducts 1.7% $53,500HomeEquityLoan 0% $6,900 HomeEquityLoan 0.5% $59,300HomeEquityLOC 0.9% $45,800 HomeEquityLOC 1.2% $51,000Mortgage 1.7% $235,400 Mortgage 4.1% $202,800 Illustra0veproposesonly.

MakingDecisionsBasedonActualBehavior

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Proprietarysuiteofsta0s0calmodels

Truepredic4veintelligencebasedonmorethan600actualaccountholderbehaviors

ProductandaKri0onmodelsforretailbanking,smallbusinessandcreditunions

RefiningSegmentsforYourNextCampaign

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Includesnearly50modelsandservices

RetailPurchasePoten0alModels

Checking,Savings,CreditCard,ConsumerLoan,CD,MoneyMarket,HomeEquity,IRA,DebitCard,OnlineBanking,BillPay,Mortgage,Brokerage,Annui0es,P&CInsurance,AD&DInsurance,TermLifeInsurance,CreditLifeInsuranceandMutualFunds

NextMostLikelyProduct 1st,2ndand3rdproductsinsequenceofcustomer’slikelihoodtobuy

AKri0onPredictorModels TotalHHDeposit,LiquidDeposits&RevolvingCreditBalances

PurchasePoten0alIndex Aggregatedviewofpurchasepropensity

AKri0onIndex AggregatedviewofaKri0onpropensity

CustomerValueSegmenta0on Cross-sellbyaKri0onsegmenta0on

SmallBusinessSmallBusinessPurchasePoten0alModels Non-FreeChecking,SmallBusinessLoan,CreditCard,CD,MM,

Savings,MerchantServices,LineofCredit

SmallBusinessNextMostLikelyProduct 1st,2ndand3rdproductsinsequenceofcustomerslikelihoodtobuy

SmallBusinessAKri0onPredictorModels TotalSBHHDeposit,LiquidDeposits&RevolvingCreditBalances

PurchasePoten0alIndex Aggregatedviewofpurchasepropensity

AKri0onIndex AggregatedviewofaKri0onpropensity

SmallBusinessValueSegmenta0on Cross-sellbyaKri0onsegmenta0on

Ultra-Segmen4ngatWork

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AGGRESSIVECROSS-SELL HIGHTOUCH

LOYALTY RELATIONSHIP

(LOWRISK/HIGHPOTENTIAL)

(HIGHRISK/HIGHPOTENTIAL)

(LOWRISK/LOWPOTENTIAL)

(HIGHRISK/LOWPOTENTIAL)

AGGRESSIVECROSS-SELL

ELITE

HIGHTOUCHELITE

LOYALTYELITE

HIGH

LOW

PURCHASEPOTENTIAL

ATTRITIONPROPENSITY

25%

HIGH

SummaryGiventhisisthebank’slargestsegment,successwiththesecustomersiscri0cal.Youmaybeleavingalotofbusinessuntappedwiththissegment.Typicallythisisariskysegment.Thesegmentcertainlyhasfinancialneeds,butitslowaccountsperhouseholdra0o(thesecondlowestofallsegments)isindica0vethatcustomerswithinthissegmenthavefinancialproductselsewhere.Thisisapricefocusedsegmentthathasthesecondshortesttenurewiththebankandalargepercentageofcustomerswhoini0allycametothebankforlowcostchecking.Thesecustomersarepricefocusedandpoten0allyspinners.Thatsaid,giventheirage,manycanbeveryprofitablecustomerstothebankover0meifsufficientlydeveloped.

1  Looktoincreaseoverallwalletshare.AtindustryporMolioparity,ABCBankwouldgenerateanaddi0onal$448.5millioninincrementaldepositsandloans.

2  Checkingpenetra0onishigh,butensurecurrentcheckingrela0onshipsareengagedtosolidifytheirrela0onshipwiththebank.

3  Thissegmentisatastagewheresignificantlifeeventscreatenumerousopportuni0es.Thissegmenthaslowpercentagepenetra0onforcreditcards,consumerloans,homeequityloans,mortgages,savingsaccountsandIRAs.Forexample,atbenchmarkpenetra0onparity,another2,875creditcardsrepresen0ng$11.2millioninoutstandingbalancesandanother4,082homeequityloansrepresen0ng$299.6millioninoutstandingbalancesmaybeaKainable.

HighTouchSize/Scope numberofhouseholds 57,500 (largest)percentageofbank'shouseholds 33% (largest)percentageofalldepositsandloans 28% averagerela0onship $22,500 averagedepositrela0onship $21,600 averageloanrela0onship $14,400 numberofyearswithbank 5.9 averagenumberofacctsperhhld 2.6 Demographics Age 44 Income $62,400 HomeOwnership 72.5%

ProductUsage%of

hhldsinsegment

averagehousehold

balance

Deposits Checking 83% $7,500 onlinebanking 0% billpayer 9.0% debitcard 65% Savings 28% $4,000 MoneyMarket 9.6% $86,400 CD 4.6% $111,000 IRA 0.5% $48,100 Investments 1.2% n/a

Loans CreditCard 10% $3,900 ConsumerLoan 0.4% $18,900 Autoloan:Direct 0.2% $6,300 Autoloan:Indirect 0.002% $2,600 HomeEquityproduct 1.9% $73,400 HomeEquityLoan 0.3% $34,200 HomeEquityLOC 1.6% $80,100 Mortgage 0.3% $274,000

Illustra0veproposesonly.

December2015

ScoringLeadsWithPrecision

16

SampleofHouseholdIDfromUltraSegmen4ng

Illustra0veproposesonly.

> > > BuildingthePlan:PukngDatatoWork

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BuildingthePlanUsingKeyLearnings

Learning Recommenda4on Ac4on

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Highacri4onrate Significantnumberofaccountclosingswithinoneyear

Costoffunds CDpenetra0on&balancesarehigh

Lowloanpenetra4on Belowmarketaverage

Largenumberofhouseholdsineliteaccountholdervaluesegments

Strongproductpenetra0onandbalances

StrongHELOCpenetra4on 30–50%ofHELOCsareunder-u0lizedorneverac0vated

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Comprehensiveonboarding


CDmaturitycampaign

Lowloanpenetra4on Belowmarketaverage Recapturecampaign



Reten0oncampaigns


HELOCac0va0onandu0liza0oncampaigns

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Comprehensiveonboarding

Createmul0pletouchpointsearlyintherela0onshiptocapturedirectdepositandotherkeyproducts/services


CDmaturitycampaign Targetaccountholderstoopenmoneymarketaccountand/orestablishrela0onshipswithinvestmentadvisors

Lowloanpenetra4on Belowmarketaverage Recapturecampaign Targetaccountholderswithloansatotherfinancialins0tu0onstoencouragerefinancing



Reten0oncampaigns Engagetocapturefutureproduct/serviceneeds



Useomnichannel,personalizedmessagingtoencourageac0va0onandu0liza0on

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Illustra(vepurposesonly.22


Highacri4onrate/lowcross-sellra4o

Significantnumberofaccountclosingswithinoneyear

Comprehensiveonboardingtodeepenrela0onships

Createmul0pletouchpointsearlyintherela0onshiptocapturedirectdepositandotherkeyproducts/services

HighAcri4onRate

DirectMarke4ngCalendar Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11 Month12 Totals

OnboardingWelcomelecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 12,300

30daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 11,275

60daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 10,250

90daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 9,225

OnboardingTotals 1,025 2,050 3,075 4,100 4,100 4,100 4,100 4,100 4,100 4,100 4,100 4,100 43,050

CostofFunds




CDmaturitycampaign Targetaccountholderstoopenmoneymarketaccountand/orestablishrela0onshipswithinvestmentadvisors


CDMaturity

CDMaturity-4,700CDs 345 345 345 345 345 345 345 345 345 345 345 345 4,140

LowLoanPenetra4on



Lowloanpenetra4on/lowcross-sellra4o

Belowindustrybenchmark

Recapturecampaign Targetaccountholderswithloansatotherfinancialins0tu0onstoencouragerefinancing


Cross-sell

Cross-sell-FourProducts/BasedonPropensity(3,000eachproduct)

12,000 12,000 12,000 12,000 12,000 12,000 72,000

LoanEngine

Recapture-25percentofaccountholderbase

30,550 30,550 30,550 30,550 122,200

ShopperAlert

ShopperAlert-5%ofaccountholderbase 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 62,400

EliteAccountHolders





Reten0oncampaigns Engagetocapturefutureproduct/serviceneeds


Reten4onReten4on-HighTouchElite,AggressiveCross-sellEliteand10%ofRela4onship 8,500 8,500 17,000

HELOC



IncreaseHELOCbalances 30–50%ofHELOCsareunder-u0lizedorneverac0vated*


Personalizedmessagingtoencourageac0va0onandu0liza0on


HomeEquityAc4va4onandU4liza4onHELOCAc4va4on/U4liza4on-50%ofCallReporttotal-2,257 1,130 1,130 1,130 1,130 1,130 1,130 6,780

BalancingandMaintainingYourEngagements

27


OnboardingWelcomelecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 12,300

30daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 11,275

60daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 10,250

90daylecerw/email 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 9,225

OnboardingTotals 1,025 2,050 3,075 4,100 4,100 4,100 4,100 4,100 4,100 4,100 4,100 4,100 43,050

Cross-sell

Cross-sell-FourProducts/BasedonPropensity(3,000eachproduct)

12,000 12,000 12,000 12,000 12,000 12,000 72,000

LoanEngine

Recapture-25percentofaccountholderbase

30,550 30,550 30,550 30,550 122,200

ShopperAlert

ShopperAlert-5%ofaccountholderbase 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 62,400

CDMaturity

CDMaturity-4,700CDs 345 345 345 345 345 345 345 345 345 345 345 345 4,140

Reten4onReten4on-HighTouchElite,AggressiveCross-sellEliteand10%ofRela4onship 8,500 8,500 17,000

HomeEquityAc4va4onandU4liza4onHELOCAc4va4on/U4liza4on-50%ofCallReporttotal-2,257 1,130 1,130 1,130 1,130 1,130 1,130 6,780

Illustrative purposes only.

Q&AWrapUp

28

Typeyourques4oninthechatpanel

StephenNikitasSeniorStrategyDirector,HarlandClarke

Presenta0onmaterialsandvideoreplaywillbeprovidedwithinoneweek.Visitharlandclarke.com/webcastsforthisandpreviousevents.

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Turning Informa4on Into Ac4on … and Growth · 2017-01-10 · Growth Isn’t Easy 5 Challenges •...

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