Customer Management for Retail Banking

Customer Management for Retail Banking - What can it do for me?

The relationship a customer has with a retail bank, where that individual has multiple accounts across a range of products, can be the most complex in the credit industry. 

Traditionally, banks have managed each customer account separately. However, this approach will not reflect the total relationship, which may result in inconsistent and potentially contradictory strategies.

How can we help you?

In today's competitive and dynamic banking market, this quality of customer service is no longer sufficient to attract, and keep customers. With increasing acquisition costs, banks must make the most of every opportunity to build stronger relationships. 

Increasingly, banks are recognising the significant benefits gained by implementing customer-level management to understand and capitalise on existing customer relationships.

A few key facts

Experian’s proposition for customer management in retail banking brings together automated customer-level management, data management, predictive analytics and expert consulting to enable banks to connect with customers as individuals rather than as a disparate collection of accounts. 

Data is aggregated from all the customer's accounts and combined with demographic and credit bureaux data. Using behavioural scoring models at account and customer level, a customer profile is created that encapsulates the individual's entire relationship with the bank.

This profile will incorporate measurement of risk, customer profitability, propensity and lifetime value to ensure the dynamics of the customer relationship are understood and used to drive a wide range of appropriate and relevant customer management strategies. These strategies can be applied at both the customer and account level.

In addition, the customer profile is used to streamline and automate a wide range of activities such as customer reviews, application decisioning for existing customers and collections management.

Business Benefits

  • Identifying the best customers
  • Increasing income with additional lending
  • Increasing sales by making effective use of resources
  • Reducing bad debt write off
  • Reducing collections costs
  • Increasing cross sell
  • Achieving compliance with Basel II requirements
  • Key Benefits
  • Automated customer-level management, data management, predictive analytics and expert consulting, to create a complete proposition for customer management in retail banking.

    • Reduce bad debt levels and manage overall exposure
    • Increase take-up rates with relevant offers
    • Free staff to focus on sales and customer retention
    • Focus limited retention resources on highest value customers
    • Ensure consistency of decisions and communications
    • Turn collections into a customer service opportunity and retain customers by proactive action
  • Product Features
  • Integrated automated customer-level management, data management, predictive analytics and expert consulting, to create a complete proposition for customer management in retail banking.

    Banks are able to connect with customers as individuals rather than as a disparate collection of accounts. The key to effective customer management strategies is a complete understanding of the customer.

    Experian analysis shows that the strongest indication of future behaviour comes through combing all the data about a customer, including cash flow, card spend and other account activity, so this data is aggregated from all the customer accounts and combined with demographic and credit bureaux data.

    Using behavioural scoring models at account and customer level, a customer profile is created that encapsulates the individual’s entire relationship with the bank. This profile incorporates measurement of risk, customer profitability, propensity and lifetime value to ensure the dynamics of the customer relationship are understood and used to drive a wide range of appropriate and relevant customer management strategies. These strategies can be applied at both the customer and account level.

    In addition, the customer profile is used to streamline and automate a wide range of activities such as customer reviews, application decisioning for existing customers and collections management.

    Decision areas across the relationship:

    • Limit management - Proactive and reactive limit increases/decreases based on overall customer and shadow limits. Identifying cross-sell opportunities.
    • Origination of new lending - Incorporate the customer profile into the credit assessment when an existing customer requests a new product.
    • Pay/No pay decisions - Automatically authorise extended credit limits for good customers and reduce Pay / No-pay decisions for overextended customers.
    • Pricing - Implement proactive and reactive pricing and be able to price according to risk.
    • Attrition and utilisation management - Proactively manage attrition and dormant accounts.
    • Marketing - For outbound campaigns for cross and up-sell, respond to inbound requests and tailor messages and offers.
    • Debt control - Carry out regular customer reviews to detect deteriorating trends prior to delinquency.
  • Technical Details
  • Consulting

    Consulting is at the heart of every Decision Analytics delivery by Experian. Consultants work with clients at every stage of the project, firstly to fully understand the business and strategic direction, and then to help design and implement systems and processes that deliver objectives.

    Following implementation, Experian consultants work with clients through a structured and regular review programme to continually evolve and enhance strategies, so that organisations continue to gain maximum value as their needs change and the business grows.  Experian creates a partnership with clients to deliver products and services that address their business challenges for today, and in the future. Bringing a fresh approach and independent viewpoint to every business, it delivers practical solutions that deliver measurable results.

    Customer management with Probe SM

    Probe SM is the advanced customer management system that combines data management with segmentation, scorecards and strategies to drive customer management throughout the organisation. It aggregates data from account management systems and other sources with historical data (sourced from the built in repository) and uses it to calculate the unique set of decisioning variables used in the strategy setting process.

    The customer and account-level management strategies are controlled centrally by the business user and then deployed across the organisation, for every customer contact and through every channel.  Business users have operational and strategic control with lending strategies managed on the desktop.  They have complete control to define, test and manage business strategies without the need for programming resource.

    Through simulation in the analytical environment and Champion- Challenger facilities in the operational environment, strategies can be evaluated, evolved and proved for maximum performance and then deployed across the organisation. The system improves operational efficiency by enabling the automation of manual processes and the redeployment of key resources.


    Statistical modelling of information about how a customer has been running their accounts provides powerful data for predicting what they will do in the future. Experian uses world-class analytical capabilities to create statistical models that turn data into intelligence, helping organisations make informed decisions about customers.

    Customer-level scorecards bring together all of these account behaviours into a single, highly predictive score. Experian is the market leading supplier of customer level scoring for retail banking organisations, including using innovative variables that analyse customer data such as cash flow and borrowing trends to provide new insights into customer behaviour.  Generic and custom scorecards are developed using pooled data for robust and highly predictive models, according to a client’s requirements, data availability and timescales for delivery. Generic scorecards, based on industry data, are highly predictive, and fast to implement for immediate benefits.

    Business intelligence with integrated monitoring and reporting

    The integrated tools enable operational reporting and strategic monitoring to support both day to day management control and longer-term business improvement.  Business users can gain access to monitoring and reporting at every level of the organisation to create valuable business intelligence. Expert reports have been specifically designed to meet the key business requirements of customer management monitoring.  This includes customer and portfolio performance, profitability, and strategy and scorecard effectiveness. Each report provides high-level statistics, indices and alerts to highlight divergence from business goals.


    Integrated with customer management are the requirements to meet Basel II compliance. Models for probability of default, loss-given default and exposure at default are implemented to satisfy the ‘use test’ requirements of the Accord. The integrated reporting contains the key management reports and Basel II measures and, in combination with the analytical simulation capability, meets stress-testing requirements.

    Modular technology with flexible delivery options

    The system has been designed and built for rapid implementation, with all the elements required for effective customer management, but with the ability to customise elements to suit individual business requirements.  The functionality in the technology has been designed to be modular so it can deliver the functionality needed today, and meet the needs of the business tomorrow.

    The systems can process portfolios on a regular basis, for example, running in batch mode at statement cycle point and also when triggered by other significant events. It can also be configured in an online environment to drive the strategy at other key touch-points with the customer, for example, during the online authorisations process, a customer service call or a branch transaction. Interfaces are flexible for rapid deployment against both new and legacy systems. The fully scalable systems are capable of processing millions of customer decisions rapidly.

  • Testimonials
  • Achieving customer management and Basel compliance

    “We have been able to rationalise the customer definition by bringing together all products into one system for the first time. Permanent tsb is now leveraging many benefits from the single customer view and this solution will play a crucial part in helping to define and implement the bank's strategic direction for many years to come.”

    Permanent tsb, Irish Retail Bank

    Permanent tsb, like many similar organisations, realised that Basel II would provide substantial benefits for its operation. With the emphasis on ‘risk related’ regulatory capital requirements, Permanent tsb, with a relatively low risk customer profile, could potentially achieve significant capital reduction by adopting the IRB approach. The bank also realised that they could also enhance the risk and credit management infrastructure and so improve the overall operation and achieve compliance at the same time.

    The bank issued a tender for the provision of a solution that could help it implement a targeted approach to achieve compliance with the New Capital Accord (Basel II).  The solution needed to include both Retail IRB and Foundation IRB for its Bank, Sovereign and Corporate exposures.

    With a short time frame to implement the solution, there were a number of business and IT challenges to address, including achieving compliance with ‘use test’ requirements, creating a suitable infrastructure and developing a data solution which efficiently collected, stored and used the data for compliance.

    Permanent tsb selected a Decision Analytics solution for Basel II from Experian, which is integrated into the customer management system, Probe SM for Retail Banking. This decision followed an evaluation and was based on a range of criteria, including the solution, delivery and experience offered by Experian.

    The solution provided delivered capability to the bank far beyond Basel II compliance, but was cost effective compared to other vendor offerings. By adopting the Experian system, Permanent tsb knew that they could achieve compliance and also implement a best practice customer level behavioural scoring solution that could be used to drive customer focused strategies throughout their retail business.


    • Prepare fully for compliance with Basel II accord and achieve IRB accreditation
    • Reduce regulatory capital requirements with accurate risk measurement
    • Enable better portfolio management with consistent and systematic capital requirements
    • Enable strategic control of customer behaviour and management strategies
    • Increase revenue and reduce costs and losses with a single customer view for consistent and effective control.

    Learn More

    Effectively managing customers with a partnership approach at a time of major business change

    “Customer management is an area of key focus for the performance of our business. Probe SM has delivered the capabilities and control we needed, and in combination with the TSYS processing platform, we now have a high degree of strategic control over the management of our portfolio.”

    “This project is a great example of how the partnership between Experian and TSYS can deliver significant benefits to clients.” Said Kelley Knutson, Executive Vice President of TSYS International. “Together we can provide efficiency gains and increased profitability, coupled with speed to market.”

    Paul Hirst, Head of Risk, Home Retail.

    With around two and a half million revolving credit accounts in its portfolio, Home Retail is committed to driving performance and customer service.

    As part of this commitment Home Retail engaged in a programme with TSYS ( to provide full outsourced card processing services. TSYS is the one of the world’s largest providers of outsourced payment services.

    Home Retail was a user of Probe SM for customer management prior to the TSYS migration. They recognised the need to ensure that their existing, highly segmented decisioning strategies and processes would continue to be supported as part of the migration to the TSYS TS2 account management system.

    Any failure to achieve this would result in a significant loss in customer value to the business and would have a detrimental effect on customer service.

    In migrating to a new decision management system there were also operational risks and business risks which required consideration and management.

    Home Retail chose Experian’s Probe SM customer management decision system to control customer scoring and decision strategies on the TS2 platform. Probe SM for customer management has been fully integrated with the TS2 platform since 2002.

    Probe SM is used to manage and maximise key aspects of the customer relationship including risk scoring, exposure management, collections and transaction authorisations.

    As part of the migration process, TSYS and Experian worked closely with Home Retail to understand credit risk management requirements for the migration and to identify any system customisations required to ensure that ‘Business As Usual’ continuity was successfully achieved.


    • Home Retail was able to continue to use Probe SM’s customer management capabilities migration to the TS2 platform. The loss of this capability would have led to a significant cost to the business in terms of diminished customer value generation and a deterioration in customer service levels.
    • The design partnership approach adopted by Home Retail, TSYS and Experian to convert all Home Retail decision management strategies onto the TS2 Probe SM system was a key component of ensuring that business continuity would be maintained post-migration.
    • Business continuity in credit risk management capabilities was successfully achieved from day 1 of the migration of the Home Retail portfolio onto the TS2 platform.

    Learn More
  • Papers and Articles
  • The issues of customer management for retail banking

    Retail banks are continually striving to improve their risk adjusted return on capital. Bank profitability is driven by revenue, costs and bad debt losses whilst maintaining high levels of customer satisfaction and regulatory compliance. All of these are directly influenced by the daily decisions made in managing relationships with customers.

    These decisions are powerful levers in managing the ultimate profitability of the bank. In many cases growth strategies have sought to strengthen relationships by increasing the number of product held by each customer, however this increases the complexity of the customer relationship.

    Most banking organisations have some level of automated decisioning in place but few do this in a holistic way. Banking organisations have tended to develop on a “silo” or product level basis, with risk (and other) managers within each silo being responsible for decision-making, scoring and strategies for their silo alone. Whilst this gives clear line of sight to roles, responsibilities and objectives at the product level, it has often led to a confusion of approaches to decision-making for customers when looking across silos.

    The fact is that a customer’s performance on their current account gives the organisation meaningful insights into the customer’s likely performance on their credit card or their personal loan, and vice versa. And yet, how many organisations take the full customer view into consideration when making credit risk and other decisions and interacting with their customers? Those that do, report that the potential benefits can be realised across a range of profit drivers. To make these decisions accurately it is essential to truly adopt a customer-focussed approach. In practice this involves gathering all the information on the performance of the customer together and using analytics to drive customer focused strategies.

    The implementation of a customer level decision-making approach is a major change programme given the product silo legacy in many banks, but one with significant rewards. Overall the bank is able to make better and more consistent lending and management decisions as well as delivering a high standard of customer service, because decisions are made based on the relationship the bank has with the individual customer.

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