La Caixa Savings Bank Boosts Profitability With Self-Service BI Environment
Today's financial services companies achieve a competitive edge by maintaining a close handle on the profitability associated with each aspect of their business. Just ask La Caixa Bank, where business intelligence (BI) technology is driving record profitability in one of its key growth markets. The Barcelona-based company uses BI software from Information Builders and other software companies to retain and expand its client base, improve cross-selling opportunities, and increase customer profitability through a better understanding of customer behavior.
"One of the basic objectives in our company's strategic plan is to significantly increase our total number of business customers," says Xavier Gonzalez, an IT manager at La Caixa, who is focused on the commercial segment. "Instead of building a new channel, we are enabling our well-established network of almost 5,000 branch offices to address this market. We've seen a 9 percent increase in small business customers in less than one year thanks to our targeted marketing campaigns."
According to Gonzalez, BI technology provides sales executives at each branch with the information they need to identify likely prospects and close new deals. "It streamlines the entire business development process, from initiating new marketing campaigns to obtaining solid leads to winning new customers," he adds. "Our BI tools empower sales people to do their jobs better."
BI Insight Propels Custom Marketing Campaigns
La Caixa has become the largest savings bank in Spain through its focus on retail banking. To build on this solid foundation, the bank has spent the last three years defining a new portfolio of financial services for the small and medium-sized business (SMB) market. Business intelligence technology is helping to align these strategic growth objectives with tactical marketing initiatives.
According to Gonzalez, the real impact of BI comes from wielding customer knowledge to skillfully execute the bank's marketing campaigns. A new self-service reporting environment, created with Information Builders' WebFOCUS technology, simplifies the process of gathering information by placing responsibility for reporting in the hands of end users at the branch offices. "BI facilitates commercial activity within our offices and financial consultancies, enabling us to concentrate on a number of pertinent factors as we launch new products," Gonzalez says.
La Caixa uses data-mining techniques to analyze more than 1,000 variables for each customer. This helps them identify companies with the greatest likelihood of purchasing certain products. "Each commercial campaign includes financial indicators that rate the buying potential of prospective customers," says Gonzalez. "We can preselect a target group of prospects that are best suited to each product offering, then assign those prospects to the correct sales representatives. The self-service BI environment allows sales executives to categorize potential customers according to more than 20 different criteria."
Some campaigns are designed to attract new customers. Other campaigns target existing customers with cross-selling initiatives. La Caixa assigns leads to particular offices based on whom they deem best equipped to deal with each type of prospect.
"We grant a high level of decision-making authority to each office, so they can exclude companies they do not wish to contact – or even reassign them to other offices," Gonzalez explains. "We use WebFOCUS to specify the primary events and alerts that have been detected for each company."
Self-Service Portal Simplifies Learning
To simplify access to its self-service reporting environment, La Caixa created a BI portal that is highly intuitive. No training is required to acquaint business users with the basic capabilities. "The portal is easy to use and the reports are easy to understand," Gonzalez explains. "Users can sort data to meet their specific criteria. For example, they can select a particular campaign and target audience, then drill down by branch, customer type, and so forth to obtain the information they need."
By filtering customer information according to user-specified variables, sales managers can define target groups that they believe will respond favorably to certain offers - such as a new bankcard for business customers, or a new assurance for agricultural customers. "The system initially presents summary data," continues Gonzalez. "By drilling down, it is possible to obtain very detailed information, in addition to numerous links to related reports that contain specialized information about the business."
Other management tools monitor commercial credit lines and generate business development reports for clients and potential clients. By default, all reports are displayed in an HTML page on the corporate intranet. Users can export results to Microsoft Excel for further manipulation or download hardcopy reports in PDF format.
Thanks to these familiar information management techniques, the BI application sees traffic of more than 35,000 daily sessions, with peaks of over 60,000. Despite this burgeoning usage, La Caixa has maintained 100 percent availability for its reporting systems during six months of heavy activity. Response time is less than 0.8 seconds for most reports, with a report-visualization response time of 15 seconds.
Building and Maintaining the System
According to Gonzalez, WebFOCUS has the flexibility and versatility they need to support diverse marketing initiatives in the field. They particularly like its Web-based user interface and thin-client deployment model. "Also, the software is very well priced - with no charge for self-service users - which makes it affordable to roll out to the field," he says.
Information Builders' Consulting supplied the necessary services to build and deploy the first phase of the BI environment in just four months. The consultants continue to assist with the bank's BI initiatives. The production-reporting environment consists of a dual-processor IBM server running AIX 5.2, Oracle 9.2.0.6, WebSphere 5.1, and WebFOCUS 5.3.3.
Data primarily originates from legacy systems on an IBM mainframe computer, as well as from third-party list brokers. Developers have created more than 70 interfaces to the bank's mainframe information systems to access customer information such as address, assets, number of products, risk profile, and profit potential. La Caixa uses the data to create Oracle-based data marts for each marketing campaign.
Cashing In on the Benefits of BI
Astute use of technology will continue to define La Caixa as a market leader, even as its low operating margins ensure profitability. Within the SMB sector, the bank has increased its customer base by 9 percent in the last 10 months and has dramatically increased profitability in this segment from 10 percent to 16 percent - largely as a result of its BI initiatives. "Workers in our branches have been able to follow the CEO's directive for sustained profitable growth," concludes Gonzalez. "Each successful campaign uncovers opportunities to drive greater benefit from our BI investments."
