Data mining is the process of unearthing knowledge embedded in the internal and external data of an organization, then using that knowledge to more effectively manage and grow the business.

In working with financial institutions that serve the commercial and institutional marketplaces, Treasury Strategies has developed a robust set of data mining tools to meet specific business needs. Following are fourteen examples of how Treasury Strategies has delivered value to our clients through data mining.

Customer Segmentation
This process uses internal revenue and profitability data, combined with external information to identify out clients’ most attractive customers and isolate critical characteristics in defining these customers. Data mining provides insight into how relationships should be managed so that low tier customers can be made more attractive, or alternatively, handled through lower cost distribution channels.

Cross-Sell Opportunities
In this area, we focus primarily on internal data, identifying clusters of products, usage patterns, and relationships between selling “style” and long term profits. Our analyses identify opportunities to sell products in ways that complete the clusters or fall into the patterns, making product selling more predictable.

Investment Prospecting
Every day customers use your wire transfer services to place investments outside your institution. By combining your wire transfer data with our proprietary databases of money market mutual fund and brokerage account information, we specifically identify customers investing elsewhere. Through our data mining, we identify the firms with which they are investing, and in many cases, the specific investment instruments. This creates a qualified prospect list for investment and/or sweep services.

Data Mining for Investment Wires

Market Research – A New Dimension
Data mining revolutionizes traditional market research. As we conduct research for clients or analyze work by others, we combine research findings with internal data analysis to deliver far more powerful conclusions. For example, it is one thing to learn from research that half of your clients like a new product concept; it is quite another to learn what your most profitable and fastest growing customers prefer. Our data mining tools address those kinds of questions.

Customer Satisfaction
Financial institutions invest heavily in measuring quality and soliciting customer feedback, then make critical decisions based on what they learn. Through data mining, we take customer satisfaction measurement to the next level; we help clients measure the impact of changes in quality and changes in reported satisfaction over time. We help identify which measures and indicators actively drive their business models and which have no impact at all. Moreover, we identify which changes in quality and satisfaction measures result in future business changes, and we identify the time lags involved.

Sweep Account Positioning
Proper positioning of a sweep account is one of the more difficult tasks our clients face, since sweep accounts ultimately impact customer balance levels. Through data mining, we examine customer balance and service levels to allow for optimal positioning of sweep accounts, including the proper pricing and target balances, identification of customer segments in which sweep is most and least attractive, and establishment of benchmarks to evaluate the success of the program on an ongoing basis.

Buyer Behavior
Understanding how customers buy and how sales forces sell allows our clients to deploy marketing resources in the most effective manner. Data mining helps uncover buying behaviors unique to customer segments, product categories or even classes of individuals (e.g. TMA members). By combining buyer behavior information with sales force productivity and customer calling data, we help clients better understand how to most effectively serve customers and grow the business.

Customer Retention
It is always more cost effective to retain a profitable relationship than to acquire a new one. Using historical behavior information, data mining creates an “early warning” environment, signaling when relationships are in danger and prompting corrective action.

Pricing
How do price increases impact balance levels? What is the impact of price changes on overall revenue? Through data mining, we analyze the true impact prices changes will have on our clients’ bottom line, line item by line item. We model our clients’ current customer base, testing numerous pricing scenarios with the objective of enhancing revenues, not eroding balances.

Life Cycle Selling
Service usage, revenue growth, and volume growth are strongly correlated over the life of a client relationship. By understanding how customer behavior changes over time, data mining clients discover what and how to sell to customers and through which distribution channels at specific points in time.

Optimizing Earnings Credit Rates
Our data mining tools examine account analysis data, allowing clients to assess the impact of various earnings credit rate scenarios on overall profitability. Our clients can test a number of segmented and step wise ECR options, effectively addressing the age-old issue of fees versus balances in a compensation structure. Strategies developed through this process allow our clients to impact their customer behavior in ways that are clearly beneficial to them.

Valuing Customer Balances
Proper valuation of customer balances has become a high priority for bank senior managements. Through our data mining, we analyze balance volatility, impute a maturity structure and value balances on a customized basis at a line of business level. For clients requiring more strategic analysis, we map our findings into a computer model that isolates the effects of specific product usage patterns on the value of those balances.

Trading Partner Opportunities
Corporations value banks that offer creative, cost effective solutions to complex problems. Very often Corporation “A” issues a check mailed to a lockbox of Corporation “B” or wires funds to Corporation “B,” both having accounts at the same bank. Through data mining, we identify linkages between relationships that may lead to profitable new services for our clients.

These are 14 ways Treasury Strategies has helped clients through data mining. We pride ourselves on developing unique, creative business solutions, and we look forward to helping your organization in the same way.