Home > Archive > May 31, 2002 > Overview
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Top financial services firms now recognize that their customer portfolio is their key business asset. However, these firms do not work systematically to understand and manage this portfolio. Xamplify provides enterprise software that helps financial services firms manage their customer portfolios for maximum success by increasing return and decreasing risk. Xamplify's X-Manager system combines real-time observations of customer actions, better predictions of future customer behavior, and value-adding strategic and tactical decisions. X-Manager can be used to assess and improve company financials, as well as meet social and regulatory responsibilities more effectively.
Financial services firms are faced with an increasingly competitive economic environment. In some areas, such as the mutual fund industry, the dramatic growth of recent years has slowed, stopped or even reversed itself.
In all areas, firms are facing the triple threat of convergence, commoditization, and customer empowerment. In a form of convergence, more and more firms, including retail banks, investment banks, credit card banks, tax preparers, brokers, insurers, are chasing after the same customer dollar. Increasingly, with the proliferation of offerings, it is becoming harder to distinguish individual products and even companies as they become commoditized. Lastly, as information technology expands and improves (e.g., the Internet), customers are becoming more empowered - critical, demanding and selective.
In addition to economic pressures, firms in the financial services industry are faced with increased social and regulatory pressures. These include risk management, and more recently national security. As Senator Carl Levin recently stated, "Our banks are gatekeepers, essentially. They've got to be much more careful about opening that gate and allowing access to our systems."
In this environment, senior executives in financial services companies must address a range of critical customer-related issues.
What is the future value that I can expect from my customer portfolio, and what are the sources of this value?
How specifically can I increase the value and reduce the risk of my customer portfolio?
How can I learn and adapt quickly as conditions change?
Which customers are likely to stay, to go?
How can I reduce attrition / increase loyalty among the right customers?
Is there a best "next product" to offer my customer?
What should be the timing and channel for that offer?
How can I interest customers in new types of services, such as financial planning?
How aggressively should I be approaching customers?
Success will be based in large part on knowing and managing your customer portfolio better. They must observe better. For example, they will detect real-time changes in customer transactions (e.g., pattern of fund transfers, trends in channel use) and demographics (e.g., changes in job status). They must predict better. For example, they will accurately estimate individual customer responsiveness to products (e.g., 401K rollovers) or their propensity to engage in illicit activity (e.g., money laundering). And they must decide better. For example, they will use observations and predictions to develop better customer strategies and tactics for achieving corporate objectives. Xamplify's X-Manager is designed to help in all these areas.
