Akbank's Analytics Initiative Improves the Customer Experience

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Customer Experience
Customer Experience
The Turkish bank is leveraging customer data to help it become a more customer-centric organization while also improving its bottom line.
Customer Analytics

Business Boost: A 1.5 million investment resulted in approximately 3.6 million in profits in 2012, an ROI of around 140 percent in the first year.

Data has become a very precious commodity for organizations, and business leaders are putting a lot of focus into developing sound analytic strategies that will help their firms get an edge over the competition. The ability to turn data into actionable insights is often a major differentiator among companies.

Akbank is committed to leveraging data to create a customer-centric organization. The Turkish bank was collecting huge amounts of data from its customer database, which holds more than 19 million records of customers and sees up to six billion transactions every year over eight channels, including the branches, call center, ATM transactions, and Internet and mobile banking.

However, making sense of this huge amount of data was challenging. In order to compete in the tough financial market, Akbank wanted to make the most out of its colossal amounts of data, allowing it to accurately predict customer banking and transactional behavior and provide customized solutions for multiple customer segments. The bank wanted to use the information to create more targeted and customized actions for its customers through real-time rules, customer-based and portfolio-based targets, and lifetime events, among others. Further, the bank wanted to leverage data to increase cross-sales, NPS, and profitability, while decreasing attrition, notes Attila Bayrak, Akbank's senior vice president for CRM.

The bank's goals required extensive work in analytics that would allow Akbank's decision-makers to better understand their customers using data insights, including product and channel propensities, churn and retention behaviors, and cross-sell and up-sell opportunities. These had to be calculated in an environment with multiple channels, segments, and products and the aim was to provide more optimized solutions through the different channels.

In order to make the most out of its data strategy, Akbank set up a cross-functional team made up of members from the CRM, strategy, marketing business, operations, and IT departments, which, under the watchful eye of Bayrak, embarked on an initiative to make the most out of data. The company wanted to use these insights to better know its customers.

The CEM initiative required the CRM department to undergo structural changes, almost doubling its staff and extending its single analytics team to three, which worked in collaboration with two campaign management teams. With more than one team, the analytics experts were able to carry out unbiased checkpoints. The analytic initiative provided Akbank with additional information on which to make decisions. Both sales and marketing as well as strategy and operations teams benefitted from continuous insights. The analytics team ran various customer segmentation models every quarter, changing the services per any changes in customer behavior. "The initiative is helping us segment and treat customers in a clearly defined way," Bayrak notes. He explains that the bank uses customer responses to learn about its clients' needs and can then send them relevant campaigns and offers in their preferred channels. Offers, campaigns, and communications with individual customers are designed according to analytics insights.

Akbank put a lot of emphasis on customer feedback, gathering insights regularly both before and after the initiative was launched. This showed that NPS went up by 43 percent between January and December 2012. Further, the number of customer complaints went down by 6 percent during that year.

The bank decided to implement geocoding technologies within its analytics initiative, including geographical coordinates for 42 million customer addresses, 300,000 merchants, 950 bank branches, and approximately 3,750 ATMs. Further, Akbank's analytics teams added 800,000 points of interests, including hotels, restaurants, and other retailers, in its data mart. The insights allowed Akbank to optimize its network, develop new mobile applications for customers, and helped in segmentation and analysis. Akbank launched a pilot customer acquisition campaign in the last quarter of 2012, leading to 52,000 calls with a response rate of 27 percent.

Akbank invested around 1.5 million in the initiative, which resulted in approximately 3.6 million in profits in 2012, an ROI of around 140 percent in the first year based on a three-year period. Between January 2012 and January 2013 the initiative helped Akbank increase the cross-sell ratio of active customers by 3.4 percent, equivalent to 1.6 million new products for active customers. Cumulative customer profitability went up by almost 18 percent, generating an extra 287 million in gross profits last year. Customer retention ratio has also gone up from 17 to 18 percent.

The initiative has helped Akbank gain 19.5 percent of the credit card market in Turkey, becoming the leader in the field. A total of 19 credit card sub-segments were created and used in the call center for 336 different retention offers.

Increased insights are allowing Akbank to provide customers with appropriate real-time offers, with 2.5 million created systematically every month for inbound channels. As a result of the analytics initiative Akbank increased the products and services sold by 2.4 million through 2012.

EXPERT OPINION
EXPERT OPINION