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Introduction to Analytics for
Small Business BankingSBBN Webinar Series
19th September 2013Srinjoy Sen
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Technical Problems?
During or after the webinar, contact David Sheffieck at [email protected], or SKYPE: dsheffieck
This webinar will be also be made available as a video on our web community. http://www.sbbnetwork.org/my-network/videos
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Upcoming Webinars
17th October - Incentives for Small Business Officers: Building
Appropriate Goals to Best Serve Your Clients
14th November - Performance Benchmarking and Management for
Senior Managers
10th December - Advanced Analytics: SME Loan Origination and Risk Management
View local times and register at: http://www.sbbnetwork.org/resource-center/events
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Agenda
What can data do for a Bank?
Why do we need Analytics?
Benefits of Data Driven Analytics
Need for Credit Analysis
Credit Risk Rating Process
Credit Risk Analysis
Management Information System
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Data, Data everywhere...where do banks start?
Most banks keep track of data…
BUT…..
70% of banks report that they don’t leverage data to the best of their ability
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Data Analytics
What data does you bank keep track of and how do you currently use analytics?
Write your ideas in the Questions/Chat box
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Collecting Data Isn’t New, Applying It Is
What will the state of the economy be next year?
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Why do we need Analytics?
To Manage risk effectively
Track and monitor sales, margins and operational performance
Analyze results and identify and predict trends in channels, regions, products, demographics and customer behavior
Dynamically adjust plans to achieve profitable growth
Help meet regulatory demands
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Best practices for collecting and analyzing
Critical Data Inventory Data Integration Data Profiling Data Quality Metadata Management Master Data Management Data Integration Reference Data Management Data Privacy
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Benefits of Data Driven Analytics
Improvement in Brand Engagement
Identifying Client Potential
Building Customer Loyalty and Value» Retention Rate» Upgrade / downgrade migration» Product cross-sell propensities » Customer communities
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Benefits of Data Driven Analytics
Advancing Data-driven Customer Marketing
Channel Optimization
Automating Marketing Decisions
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Marketing Decisions and Analytics
What software or manual reports is your banking using to define and determine marketing decisions?
Write your ideas in the Questions/Chat box
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Credit and Analytics
Assessment of loan applications» Are you assessing loan applications manually?
SME is a large sector» Is your SME and Retail department the same?
Quality of data» Do you have the relevant data?
Knowledge of Industry» How do you analyze conditions revenant in specific
Industry?
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Better Data = Better Risk Management
Central Bank’s guidelines» Concerns about the magnitude of credit risk exposure
taken by the banks
Asset Quality» Most banks had some sort of in-house rating system,
applying a quality rating to an asset.
Resource Management» Return of Earnings
Rating Agencies» Is their rating assessment relevant?
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Developments in Bank Risk Rating Processes
Function of Credit Risk Rating Process
Credit Approval & Underwriting
Loan Pricing
Relationship Management & Credit Administration
Capital Adequacy
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Identifying and Rating Credit Risk
MIS & Reports
Expectation from Bank’s Credit Risk Rating Processes
Development in Credit Risk Rating Processes
Linking Internal & External Ratings
Scoring Models
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Risk Rating Process Controls
These controls include:» Board of Directors & Sr. Management» Staffing» Reviewing & Updating Credit Risk Rating» MIS» Credit Review» Internal Audit» Back Testing
Rating Credit Risk
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Credit Risk Analysis
Financial Statement Analysis
Cash Flow
Ratio Analysis & Benchmark
Analysis of projections
Other repayment sources
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MIS Reports
Should all reports be automated or are some manual/excel reports helpful?
Write your ideas in the Questions/Chat box
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Business Intelligence (BI)
Financial and Operational Performance Management
Customer Profitability Management
Profitability Management
Credit Analysis
Regulatory Compliance
Operations Management
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Challenges in Regulatory Reporting
Enhancing accountability and the quality of referential and transactional data reporting
Automating regulatory reporting processes to minimize manual processes and adjustments
Improving regulatory reporting rule interpretation and personnel training.
Optimizing the governance structure and control environment around regulatory reporting