The financial services industry is dealing with record amounts of data flowing faster than ever, so smarter analytics will increasingly become the competitive differentiator among financial institutions. The true strategic value of these data streams is to predict consequential outcomes at critical decision points, optimizing operational decisions in core processes.
Faced with the challenges of how to contain costs, increase revenue, and mitigate risks, innovative financial analytics solutions are being used to improve regulatory compliance, automate business processes, and enhance customer experience. Such capabilities are enabled by analyzing structured data and unstructured text within the data stores available to the banking and financial institutions. When expert analytics consulting expertise is combined with internal organization commitment, the strategic value of data is greatly enhanced.
Elder Research analytics consulting services can provide support throughout the journey — from assessing analytic strategy to managing the institutional challenges of integrating analytics into operational financial systems and banking processes. Making analytic insight accessible to the right people at the right time is critical to maximizing value derived from data. Examples of our financial services analytics consulting services include:
Credit Risk Scoring
In today's competitive credit marketplace for financial loans, accurate credit risk scoring remains a challenge, especially as providers try to manage overall risk exposure while meeting their market share and profitability goals. Using a mix of credit history, available policy alternatives, and external data, Elder Research can build robust predictive models to optimize terms and approve loans to achieve these goals for more prospects and customers, without compromising risk exposure.
Marketing analytics provides financial institutions a sustainable competitive advantage by helping to understand customer sentiment and behavior and to adapt to changing customer needs. Marketing response models are critically important for acquiring new customer, and personalizing the customer banking experience through targeted products and services improves customer loyalty, retention, and profitability. Learn more.
Elder Research partners with investment clients to optimize and verify original and third party investment strategies, develop proprietary investment modeling software, and provide trusted advice, rapid prototyping, and investment strategy consulting. Learn more.
Financial Services Solutions
Our clients—whether newly formed analytics teams or established pros—find that we help them understand their data, strengthen their teams’ abilities, and bring to the forefront basic and advanced levels of insights aligned to their needs. Examples of our banking and financial analytics solutions include:
Improving the Effectiveness of Marketing Campaigns for Financial Products
Elder Research built cross-sell and next-most-likely marketing analytics models for financial products campaigns. The models identified customer/product pairs for mass-market campaigns, as well as more rare and profitable “contact” sales opportunities. To achieve the necessary analytic breakthroughs, Elder Research developed a custom association rules software product called QuiltMaker that has since been generalized to address problems in multiple industries.
Improving Credit Card Risk Scoring
Elder Research was brought in to provide an outside perspective to enhance the credit risk scoring results for a client with an in-house team of hundreds of analysts with advanced degrees. Over many years that team had honed models to world-class levels of performance. Astonishingly, Elder Research’s expertise with a dozen modern data science algorithms was able to significantly improve the prediction of bad credit risks over the client’s models. The improved the early identification of credit card accounts likely to default led to tens of millions of dollars of annual gains for the client.
Identifying Risks in Brokerage Firm Applications
Elder Research designed and implemented sequence matching patterns for a regulatory agency to identify risks in brokerage firm compliance, anti-money laundering, and equity trading and market making applications. These technologies were incorporated into a product that operates on large data marts to uncover patterns of suspicious behavior and provide actionable alerts to financial institutions.
Predicting Financial Account Churn
Elder Research partnered with a diversified bank to predict account closures (churn), prioritize marketing interventions, and understand precursors to customer churn. The goal was to improve the predictive performance
of an existing account churn model that was based on heuristics in order to reduce account churn rates by at least 10% using only internal data. We built a predictive model that was 20% more effective at predicting customer churn than the existing techniques.