Searching for customer insight

By Brooks Gibbins, SVP, WW GM Financial Services for FAST, A Microsoft® Subsidiary

After a decade of enterprise resource planning and two decades of data warehousing, many organizations are still frustrated over their inability to access customer data. The emerging role of Search Technology against a perennial problem...

“A Moment’s insight is sometimes worth a lifetime’s experience.” Oliver Wendell Holmes Jr.

With volatility in the markets, one currency that still retains its value and inspires confidence within financial services is that of customer insight. This currency invested wisely facilitates acquiring and retaining customers, meeting compliance obligations, improving risk visibility and helps organisations enhance customer life cycle management.

Given its importance, why then does customer insight still prove so hard to achieve? After a decade of enterprise resource planning and two decades of data warehousing, many organisations are still frustrated over their inability to access customer data.

They have invested heavily in data integration projects, only to find that the quality and usefulness of their data assets has deteriorated. This growing unease with customer data quality is compounded by the growing cost of maintaining these systems and exploding data volumes which includes an urgent need to integrate unstructured content such as email, documents and other media into the corporate warehouse.

By failing to address this issue effectively, technology has, ironically, compounded it. Data silos are not merely due to an accumulation of legacy systems but in some cases the deliberate actions of groups that hold their own customer intelligence and communication in an attempt to improve user access to customer information. Culturally there is often an equation between ownership and control and many traditional projects fail through lack of user acceptance. However in a climate which is likely to see more regulation, this lack of collaboration and consistency may introduce unacceptable exposure.

And what about the customers – what are their expectations?  At the very least they expect that the institutions in which they have invested or bought products from will recognise them. Customers expect this whether the institution they originally dealt with still exists or has become part of a larger organisation – they are certainly not interested in how increased levels of M&A activity will make customer insight even more difficult to achieve.

New approach - same currency
Search Technology is increasingly used to address data discovery, access and integration issues in financial services organisations with a proven track record in delivering applications across the trading floor, front, middle and back office functions. Search Technology, which is valued for powering intranet and Internet sites and processing market intelligence, is now an essential part of applications such as Know Your Customer, automatic customer clearance, risk management and legal compliance solutions as well as business development initiatives.

So how can financial services organisations use Search Technology to provide business users with an integrated, scalable and secure view of customer data?

First, it’s key to recognize that there are search tools (aka appliances) and search platforms. Make the right choice. Delivering Customer insight is the domain of an enterprise-class search platform.

Secondly, Search technology can provide clear value within the first 90 days and then provides a foundation for an information access platform which will be strategic to the firm.

A Search platform approach to integration can remove the need for costly layers of middleware. Search is now commonly used as an information retrieval layer on top of core business systems. Agnostic as to whether these sources are structured or unstructured, Search will facilitate the data normalisation, cleansing and matching you would expect from traditional Enterprise Integration projects. Search applications reduce the hardware investment previously needed to store new layers of data, are easier to maintain and deliver value in months rather than years. Users are quickly engaged as Search is a familiar technology. This acceptance is critical when addressing the behavioural changes required for successful application adoption.

FAST has undertaken a range of projects to support very different customer insight priorities and approaches driven by business development, compliance or regulatory agendas. Each project shares a rapid implementation and return with high levels of user acceptance.

One FAST customer, a major US financial services company based in New York, has bucked the trend of failed integration projects by taking an alternative approach to addressing a perennial compliance problem of creating and protecting  the certified “gold copy” database.

Managing Compliance - Protecting the “gold copy” database with FAST Search Technology Platform (ESP)
Challenge – This international organisation had invested heavily in creating the certified “gold copy” customer database. The professionals responsible for maintaining this asset knew it would be tough task as they needed to synchronise with fifty regional databases, developing the processes necessary to bring them under the jurisdiction of the “gold copy”. This was not a pure technology challenge. Historically the pressure on users to respond to business opportunities meant that they would create new records and profiles rather than invest time searching to ensure that records did not already exist.

This was especially true if the there were multiple records or they appeared in a slightly different form. Agility was more important than the cost and potential compliance issues of creating a data explosion. The team responsible for data integrity considered building a bespoke Search solution to support users but quickly realised that this would be too time consuming and rigid. For this reason the organisation turned to FAST ESP to provide a consistent, flexible, easy to use process that would enable the company to protect the agility of finance professionals and maintain the data integrity to meet compliance requirements.

Solution – FAST is being used to manage the interaction between global trading, front and back office applications throughout the bank with the central “gold copy” customer database. The increased visibility also supports the regulatory requirements of compliant customer on-boarding.
 
Benefits
Rapid time to delivery – the speed and flexibility of Search Technology has radically reduced implementation time and resources.
 
Satisfying Simplicity – Using Search to identify duplicate records is so straightforward that users no longer try and work around the system by creating yet another record but rather follow the defined data quality process.

Addressing the consequences of M&A activity – The Search index provides an audit trail for each record by displaying the history of ownership through various acquisitions. When a record from an acquired company is searched the application will show “previously known as”.

Improving the user experience – FAST ESP provides sub second response to all queries. Previously users were frustrated that a search could take several minutes. This improvement is possible because a query is no longer scanning multiple databases to return results. Speed of response is a significant benefit both in terms of visibility for decision making and managing risk.

Changing Behavior – Departments that were historically reluctant to share customer data are now more open to collaborating. Search has highlighted data anomalies and opened a dialogue with users about the best presentation of data.

Delivering value – the majority of the investment will be in the initial implementation. As each additional system within the bank is linked to the “gold copy” it will reuse functionality maximising the investment and cutting out waste.

This successful implementation not only demonstrates a successful approach to creating and protecting the “gold copy” but shows how the right technology can change user perceptions and behaviour, promote collaborative working and improve performance. It also shows how using Search Technology can minimise the cost and resources necessary to get a solution up and running. This rapid return on investment is likely to be attractive not only to information professionals but also their CFOs likely to play an even more significant part in approving IT spending in 2009.

Managing Risk with Search Technology – customer insight for international standards
This initial project has also demonstrated the value Search Technology can deliver to managing risk. By increased understanding of customer transactions financial institutions will gain greater insight into exposure when managing the rigorous risk and capital management requirements of Basel II. A fast, accurate view of this exposure can allow institutions to release capital back into the bank.

Who sees customer data issues – your customers do
At a recent event, a senior executive from a major Insurance Company relayed an anecdote which confirms how difficult it is to establish and maintain a single view of the customer. The Insurance Company is the product of several mergers and acquisitions. If Mr John Smith has dealt with several of these companies buying different products over the years, he could possibly receive 5 separate letters from the Insurance Company on a single day. What concerns financial services companies is how this customer now perceives and trusts a brand that is plainly unable to consolidate his relationship history. As trust is a sentiment that is in short supply in the current climate, addressing this very visible failure is a customer investment long overdue. The question is whether addressing this issue means more of the same traditional integration investments or taking a fresh approach by applying technology specifically designed to deal with issues of scale, context and relevance of results?

Acquiring and retaining customers – Building customer intelligence with Search Technology
In a financial institution dealing with high net worth individuals, a demographic that banks can most definitely not afford to lose, FAST has been helping to support business development executives to acquire and retain customers. The bank wished to improve its high level understanding of this segment of customers and profile all interactions to analyse the impact and results. Before the investment in FAST preparing for a meeting may require the bank employee to log onto 16 separate databases and cut and paste details into a word document. This was not only a productivity issue but also created exposure concerns over protecting customer data.

When it comes to really understanding these prosperous and successful individual customers, senior executives have expected business development staff to manage this intelligence without the need for technology. Perhaps this is possible for twenty or thirty customers but certainly not for portfolios that may cover many hundreds of sophisticated individuals operating in fast moving economy.

In terms of customer insight innovation, financial institutions are using FAST ESP to build customer insight portals that integrate external unstructured data sources in order to compliment their understanding of a customer or prospect. By accessing information that outlines the full range of an individual’s commercial activities, professional qualifications or business awards; or by trawling self published information from sources such as social networking sites – business development can enhance its understanding and communication with individual customers. These seemingly small but critical differentiators in customer insight, delivered using Search Technology, have been shown to make a difference in an increasingly competitive climate an example of which is an increase in personal recommendations of the Bank’s services for other high net worth individuals.

Customer Life Cycle Management – Using Search Technology to develop long term customer value
An interesting by-product of greater customer insight for business development opportunity, which is one side of managing the life cycle of a customer, is the increased visibility of potential risk. By providing a single point from which to view the range of an individual’s business activities, much of which may not be handled by the bank, and understanding exposure, the account teams are more able to manage the life cycle of the customer.

Whatever the priorities and approaches that currently drive financial institutions’ need for customer insight, Search Technology can deliver the required results. Whether the goal is customer acquisition and retention, managing risk, compliance or increasing the value of the customer throughout their lifecycle, FAST ESP provides an alternative to traditional data integration and access projects.

Contact details:
Brooks Gibbins, SVP, WW GM Financial Services, FAST, A Microsoft® Subsidiary
142 West 57th Street, New York, NY 10019  USA
T: +1 646 792 0228, M: + 1 917 225 2264, E: brooksg@microsoft.com, W: ww.fastsearch.com