SBBN SME Presentation v4 0

CONFIDENTIAL – DO NOT DISTRIBUTE © Small Business Banking Network 2013

Introduction to Analytics for

Small Business BankingSBBN Webinar Series

19th September 2013Srinjoy Sen


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

mailto:[email protected]

http://www.sbbnetwork.org/my-network/videos

http://www.sbbnetwork.org/my-network/videos


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

http://www.sbbnetwork.org/resource-center/events


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


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


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


Collecting Data Isn’t New, Applying It Is

What will the state of the economy be next year?


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


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



Improvement in Brand Engagement

Identifying Client Potential

Building Customer Loyalty and Value» Retention Rate» Upgrade / downgrade migration» Product cross-sell propensities » Customer communities



Advancing Data-driven Customer Marketing

Channel Optimization

Automating Marketing Decisions


Marketing Decisions and Analytics

What software or manual reports is your banking using to define and determine marketing decisions?



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?


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?


Developments in Bank Risk Rating Processes

Function of Credit Risk Rating Process

Credit Approval & Underwriting

Loan Pricing

Relationship Management & Credit Administration

Capital Adequacy


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


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


Credit Risk Analysis

Financial Statement Analysis

Cash Flow

Ratio Analysis & Benchmark

Analysis of projections

Other repayment sources


MIS Reports

Should all reports be automated or are some manual/excel reports helpful?



Reports (MIS) – An Overview


Business Intelligence (BI)

Financial and Operational Performance Management

Customer Profitability Management

Profitability Management

Credit Analysis

Regulatory Compliance

Operations Management


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


Thank you for your attention!

Any Questions?

Introduction to Analyticsfor Small Business Banking

SBBN SME Presentation v4 0

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