Unica wp ebm_financial

Unica Corporation | www.unica.com 1

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OPPOrtUNitY aND iMPaCt

As financial services rapidly embrace mobile computing, one-to-one

customer service, broadband information access, and always-on

communications, increasingly large amounts of information are being

generated and transmitted. Nonetheless, computing costs continue

to drop as computing power increases, allowing financial services

providers to capture and retain an unprecedented amount of infor-

mation about their customers—most notably regarding their specific

transactional activity as well as interactions with branch offices, call

center personnel, and electronic delivery channels.

This large-scale increase in data assembly, as witnessed by the

rapid growth of data warehouses and data-marts in back-end

corporate systems, provides the foundation for a giant leap forward

in managing customer relationships. There is great potential for

advances which benefit both the firm and the customer. Yet crucial

customer and business data often go ignored, and service and

product offerings are generally not optimally targeted—in part due

to the informational riches we have described here—which often

constitute an overload on mission-critical business and communica-

tions systems.

An acute need has developed for solutions that can empower finan-

cial services firms to make more immediate and accurate use of the

data assets they are rapidly accruing.

Competition (and for most financial services firms, regulation) has

created imperatives for increasing scrutiny and rapid response to

changes in customer behavior. For most companies, these demands

reach across the enterprise, creating a need for robust, intelligently

designed, and cost-effective solutions which can be implemented

quickly and used without significant IT “overhead” cost.

Unica’s event-Based Marketing Capability enables Behavior-Based action

Unica Detect for Event-Based Marketing empowers your firm to

turn the vast amounts of information it has captured in the form of

daily financial transactions—ie. disbursements, deposits, trades

and purchases—into customer behavior insights. “Awareness” of

these behaviors can then be used to generate responsive actions

that are specific and highly relevant to your customers—and to your

organization’s business goals. Unica Detect is fast, open, easy to

use, and has vital applications in many domains, including attrite risk

identification, cross-sell, customer text and email alerts, fraud detec-

tion, and web and call center interaction monitoring.

Detect provides a revolutionary new approach to Event-Based

Marketing that empowers financial services providers to take

immediate action based on financial transaction records and other

customer behavior data. This new solution allows the detection

of a wide range of behavior-significant patterns of interaction—

patterns that can be simple or complex in structure; triggered by

single events, or extended over (widely variable) periods of time.

These trigger structures allow you the room to grow your under-

standing and effectiveness as increasingly subtle or complex

behavior patterns are detected, measured, and acted upon. Our

pattern-detection and comparison capabilities can take you beyond

simple “pattern matching” triggers, and into behavior-based analysis

and response to execute these kinds of focused tactics:

Reducing churn by distributing attrition triggers to your sales/•

service force when a customer shows “signs of dissatisfaction”

Creating cross-selling and needs-analysis opportunities from •

relevant dialogue you initiate with customers, triggered by trans-

actional behavior and product-use changes

Modeling and executing a failsafe “on-boarding” experience •

for new customers by closely monitoring product adoption

and usage

Detecting complex or subtle patterns in on-line banking use that •

may signal high risk or unauthorized activity

Monitoring account usage to proactively fit customers into the •

most appropriate product and service bundle

Triggering execution of one-to-one or “right-time” campaigns •

Reporting upon the deeper, more meaningful information that •

lies hidden in your enterprise’s transaction streams

eVeNt-BaSeD MarKetiNG: iSSUeS aND ChaLLeNGeS

The goal of responsive—or even better, anticipatory—action is

shared by many financial services firms today. However, even

cutting-edge providers are finding significant technical challenges as

they attempt to make this objective into a reality.

Making Sense of Data Originating from a Myriad of Sources

Your customers interact with your firm through a multitude of

systems, and these systems were typically not designed to interact

with each other. (This heterogeneity of systems can develop over

time, through acquisitions, or through organic growth, but few

Expanding the Power of Data:Event-Based Marketing in Financial Services


companies are spared from the problem of “technology-diversity.”)

It’s very likely both you and your competitors are faced with making

these diverse systems and data work together so that you can

formulate a whole picture of your customer and respond in a coher-

ent way. Two common approaches for addressing this problem are:

enterprise application integration: • In this approach, you tie

your applications together using something like Web Services

or Enterprise Java Beans. This involves intricate planning and

complex programming with the possibility of skewing the end

result towards the desired outcome. Future changes can also be

time consuming and expensive.

Data Warehouse:• In this approach you build a single repository

for all your corporate data with the goal of creating a consistent

data environment for all your enterprise applications. The ware-

house is invaluable for storing data, but there may be, because

of its size and structure, limits to the speed with which your

various applications can mine and make timely use of this data.

With either approach, there is the constant demand to keep your

framework current with new sources of data and new destinations

for its output. The ongoing challenge of these integration efforts is to

keep pace with the rapid evolution of your customer-facing business

strategies. What is required is a flexible mechanism for intuitively

manipulating and acting on your integrated information.

Choosing the right technology

“Action-enabling software”—which detects customer events as they

happen and triggers actions that are on-target for your business—

creates some unique requirements. If the system is to be adopted

and used by your marketing group, it must be intuitive and relatively

easy to navigate and control. Since the system will have to manipu-

late the vast amount of transactional (e.g., DDA, loan, card and

trading; on-line activity and call center) data that arrives each day—

and do so in very small processing windows, it must also be power-

ful. Since you already have made a huge investment in technology

that executes all of its specific assignments, the new component

must also be non-intrusive and non-replicative. And most important-

ly, because you will rely on this solution to “feel the pulse” of your

customers, and provide or execute recommended response-actions,

it must be fast and accurate with transparent business rules.

In evaluating the current state of the art, you might consider any of

the following technical alternatives:

rules-Based “expert” System.• In order to build a system

that is flexible and meets the needs of the marketing users,

you might evaluate a commercial expert system as a technical

foundation. But while promising a methodology for building pre-

determined (declarative) business rules, expert systems require

a multitude of non-business rules to control basic functions and

to prevent malfunctions. And since an expert system is really just

a software library, it will require extensive IT expenditure to open

your code and integrate the library into your environment. This

may require rethinking your entire architectural framework.

Neural Network.• In order to build a system that quickly detects

patterns within your volumes of transactional data, you might

consider a neural network. This technology has the drawback of

being the ultimate black box—it either gives an answer (without

explanation) or it does not—which can be frustrating to market-

ing users who want to be reassured that the customer indica-

tions are accurate, reliable, and reproducible. A neural network

can also be intolerant of the addition of new input feeds, thus

failing to meet your requirement that the system be able to adapt

to a constantly evolving data environment.

Data Mining. • In order to take advantage of your data ware-

house, you might consider data mining. Data mining is useful

for the discovery of new behaviors, but it has limitations when

used for the real-time detection of the patterns underlying those

behaviors. Data mining often works upon data that has been

removed from its transactional business structure, and it typically

requires experts to translate marketing requirements into results.

Operationally, data mining is almost always an off-line activity, so

it is not able to deliver a quick turn-around of results.

Unica Detect extends the rules-based, expert system approach

with a unique “state-engine” paradigm which facilitates exceed-

ingly efficient provisioning of transactional data, indexed to a single

subject (generally, an individual household, customer or account)

and allows the rules to be developed and executed to use time and

time-bounded aggregates, as variables. Our solution can also treat

patterns as “ranges,” which reflect typical behavior (or, outside of

the ranges, atypical behavior) in regards to the individual subject

and the specific variables being analyzed. Maintaining the custom-

ers’ “state” eliminates significant data bottlenecks, and significantly

expands the logical flexibility of the solution, without surrendering

simplicity of control for users. The result is a flexible, fast capability

that allows you to optimally leverage your transactional data assets.

the UNiCa eVeNt-BaSeD MarKetiNG PLatFOrM: UNiCa DeteCt

Unica Detect is a powerful Event-Based Marketing (EBM) Platform.

This power is easily harnessed through its rules-based user inter-

face, which allows the user to define sophisticated patterns of

activity in an incoming stream of transactions. Each pattern can be

configured to fire appropriate triggers to systems external to Detect


to achieve the desired event-driven functionality. The rules are

capable of capturing and responding to rich and complex behavior

patterns, yet they are easily created by aggregating simple subcom-

ponents into the desired detection patterns.

This event and pattern detection process can be applied in a wide

variety of situations ranging from the triggering of cross-sell op-

portunities and attrite risks to fraud detection and customer alerts.

Unica Detect’s unique strengths lie in:

Its ability to rapidly detect complex patterns in customer •

transaction streams

Its ability to rapidly detect complex trend and pattern •

aberrations in customer transactional data over time

The ease with which it can be configured for any type of trans-•

actional input, and also for any type of existing product package

and customer profile data

Its intuitive browser-based interfaces that allow the business •

user to easily create and modify the rules which control the

Engine’s detection and response behavior

The following sections provide a more in-depth introduction to these

and other distinctive features of the product.

the CritiCaL DiMeNSiONS OF eVeNt-BaSeD MarKetiNG

The three key aspects of an Event-Based Marketing platform are

speed, openness, and ease of use.

Speed

Unica Detect is fast because:

It is highly efficient in how it analyzes the incoming transaction •

data: it never analyzes the same transaction twice.

It only retains information about the customer that is relevant to •

the existing rule set; hence, the product is efficient in maintaining

state across sessions. (An explanation of the significant benefits

realized from this capability appears below.)

Unica Detect is engineered to solve two performance related

problems:

restoration of rule state:• Detect saves state within the rules,

and it saves that state in such a way that it can be quickly

restored when a customer returns to interact with the enterprise.

This creates huge performance benefits when compared to a

system that must continually reprocess old information when

new information arrives. One may consider it in this way: a

system that continually reprocesses its knowledge store gets

slower as it accumulates more information, whereas Detect

shows no such decline. The Engine holds various pieces of

information such as history, profile information, and product

information within a database and retrieves that information as

efficiently as possible. Its real innovations, however, are within

the dimensions of data handling, not database retrieval.

Manageability:• Because Detect saves transactional information

in a way that is relevant to the rules using this information,

it does not need to generate additional information about already

consumed data. In traditional rules-based systems or any

system that holds all relevant information within a database,

restraint mechanisms need to be put in place to prevent the

system from continually reproducing the same conclusions.

Open architecture approach

The current emphasis on systems that are built upon a multi-tiered

architecture has shifted the focus away from data-centric applica-

tions and toward applications that exhibit a flexible and adaptable

business purpose, thus allowing organizations to preserve their

investments (time, money, and knowledge) resident in existing tech-

nologies. The emergence of XML as a standards-based vehicle for

sharing data within the enterprise and beyond is a significant indica-

tion that current architectures require a broad and open approach to

data usage.


Consistent with this open approach, Detect makes minimal assump-

tions about the nature of the data that it uses. Through the use of

intuitive graphical interfaces which allow the user to map raw post-

ing data to a business-centric vocabulary, Detect can be configured

to simultaneously accept inputs from various databases, flat files,

open input streams, and other information sources.

Detect readily accepts external data sources in their native formats:

relational databases, XML feeds, text files, etc. This flexibility

eliminates the IT overhead required for conformance to a rigid data

model. The “meanings” of the fields in the external data sources are

defined within Detect at installation time. From that point forward,

the content of external data sources appear to users as relevant

business objects (“account,” “customer,” etc.)

ease of Use

Unica Detect’s unique data-flow architecture naturally partitions the

work of configuring the system into different stages designed for

different users—users with varying degrees of domain expertise and

decision-making responsibility.

Unica’s ability to refine this relatively broad problem-space into

manageable components has produced a system that can be

configured, modified, and monitored with minimal intervention of

IT personnel. To a significant degree, the solution can be used and

controlled by a marketing analyst who wishes to implement revenue-

generating processes and programs.

All Detect user interfaces are browser-based and provide remote-

update capability to all users. The user interfaces are easily custom-

ized to reflect the structure of a specific business domain, e.g.,

deposits, loan, credit card or web channel. End-users can graphi-

cally select from intuitive transaction types, data attributes and

values to construct rules using a vocabulary of expressions naturally

familiar to them.

Contrary to the traditional rule-based system that becomes clut-

tered with too many rules, Unica’s system is focused expressly on

the business problem being modeled. In other words, rules built

with Detect are keyed to business content and not on “rule-control”

thus preventing misfiring, defining suppressions, and the like. This

greatly reduces the number of rules required and makes the installed

system more manageable.

accuracy and effectiveness

The combined effect of Detect’s unique approach to pattern detec-

tion, its flexibility and speed, along with its ease-of-use, is much

greater accuracy for detection of circumstances relevant to your

business and to your customers. Whether you’re using the solution

to generate text messages directly to your customers, or to provide

reasons-to-call for your bankers, brokers, sales and service staff,

you’ll drive a greater volume of high quality leads, and establish a

proactive dialogue with your customers. The improvement you gain

in the quality, responsiveness, and relevancy of dialogue with your

customers is a significant benefit in itself. Upgrading the accuracy

and quality of opportunities delivered to your frontlines provides

both intrinsic benefits (better quality opportunities), and comple-

mentary improvements: heightened engagement and buy-in at the

front-line with your marketing programs. Together these improve-

ments will usually drive better follow-up activity—and success rates

on both retention and selling opportunities will improve as a matter

of course.

CUStOMer BehaViOr aND triGGer CreatiON

Unica Detect discovers significant behaviors in transaction data as

it happens and uses historical information to generate triggers for

high-value interactions.

The activity of building and managing these trigger rules is carried

out within the graphical rule development environment described

below. The process is simplified by being broken down into a series

of discrete steps that involve first characterizing customer behavior

and then transforming it into business-significant actions.

The customer behavior identified by Detect consists of business-

relevant activity that can be inferred from the current and historical

calling habits and known characteristics. Customer behavior

consists of events, patterns, and attributes.

Events are occurrences within a transaction stream, such as a •

card purchase, a paid check, a log-on, or an equity trade. An

event meets a set of predetermined conditions relevant to your

customer’s behavior.

Patterns are business-relevant groupings of current and histori-•

cal events that contribute to a characterization of customer

behavior. They include not only what a customer has done,

but what he or she may not have done. Complex patterns may

include in their input simpler patterns that are already defined.


Attributes are collections of ascribed customer characteristics •

gathered and derived from existing data sources, such as a

customer profile database. An attribute is an aspect of customer

behavior which serves to qualify transactions.

Detect highlights significant changes in customer behavior and

sends action triggers to external customer management systems,

which perform the relevant actions, e.g., the creation of a lead or an

email, appropriate to the trigger type.

Every aspect of the creation of triggers is supported through the

configuration environment, which presents an organized way for

using lower-level rules as building blocks for higher-level activities.

The program’s organizational facilities allow a rule creator to restrict

use of specific “building blocks” to rules that meet specific criteria

(such as campaign-type, priority, rule author, rule start date, etc.)

Detect offers a variety of other features that make the activities of

rule creation, maintenance, and reuse much easier. Specific to the

activity of rule identification and reuse, a multitude of structured

methods are provided to tag rules and then selectively access them

using flexible criteria. For example, a rule creator is able to indicate a

rule’s intention (detect cross-sell opportunities, asset retention risk,

etc.) and then utilize that information both to access that rule when

using it as a building block and its performance when doing reporting.

trigger Libraries

To assist you in developing your trigger processes quickly, Unica

also provides a variety of prepackaged trigger libraries for specific

industry verticals and processes. Our libraries for financial ser-

vices, like our libraries for telecommunications, reflect the common

terminology and use-cases for the industry. Of course the library is

flexible and can be modified and augmented as you implement the

solution to reflect your firm’s specific processes and procedures.

eFFeCtiVe USe OF eVeNt-BaSeD MarKetiNG

Maximizing the effectiveness of Your trigger rules

Once the triggers have been created, Unica provides a prototyping

environment that enables the user to cycle through the process of

building, testing, and modifying trigger rules. The prototyping

environment offers the ability to:

Create and modify trigger rule sets •

Run sample data through the trigger rule set •

Verify the results of running sample data using the reporting •

mechanisms and the output of Detect

Restore Detect to a certain past state with the intention of •

rerunning sample data

Ramp-up new rules to allow them to enter the system with •

pre-existing state information

Within the prototyping environment, the user has full control over the

set of triggers, test data, target environment (test/production), and

the actual results. The user can change any of these elements, rerun

the system, and compare the varying outcomes. As a result, the

test environment can be used to test various “what if” scenarios on

a predefined targeted population. The outcomes of these “what if”

scenarios can be analyzed and compared using Detect’s built-in re-

porting capabilities to determine which strategy to use in production.

Downstream Manipulation of triggered actions

Actions that are triggered by Detect move to a dispatching compo-

nent where they can be targeted to a variety of downstream sys-

tems. The current destinations supported include databases, files,

email, or messages to a downstream process.

Targeting of actions is done in the action editor, which supports ei-

ther static or dynamic routing. Dynamic routing entails using trigger

attributes in conjunction with real-time parameters and a history of

past firings to dispatch actions to multiple channels with great flex-

ibility. Some of the capabilities enabled by dynamic action routing

include:

Suppression of action triggering based upon the history of past •

triggering

Prioritization of action triggering based upon the entire set of •

actions that have triggered

Delay of triggering based upon geographic area •

Taken together, these capabilities provide the means of managing

all interactions with the customer to avoid needlessly replicated

notifications across different channels, or excessive contacts result-

ing from different pattern activities that are detected closely in time.

envisioning Your results

Unica Detect includes a comprehensive package of reports providing

value to all areas of your organization. Using a browser-based

reports interface, users can customize queries with any one or all of

a number of available filters, delivering a high degree of flexibility for

report results in any one of the following areas:

Measures of Effectiveness provide a means for management to •

determine effectiveness of specific triggers and their potential

impact upon target populations. Used in conjunction with the

test environment, these reports can also be used to analyze the

feasibility of new test strategies. Equally important is the ability

of these reports to identify which customers or target populations


have not yet generated triggers, sometimes signaling faulty

rule definition, an overly ambitious campaign, or sluggish target

population.

Transactional Verification provides a means for operations •

personnel to verify that engine processing has occurred.

Because these reports include transaction volume, processing

start and stop times, along with overall processing performance,

this information is also useful in developing peak and off-peak

metrics and may be used in performance planning and optimization.

System Verification provides a means to monitor rule manage-•

ment activity, such as when rules were created, changed, or

deleted for active processing use. This information is useful for

tracking rule author, rule intent, and rule applicability at any given

point in time.

aBOUt UNiCa

Unica Corporation (NASDAQ: UNCA) is the recognized leader in

marketing software solutions. Unica’s advanced set of enterprise

marketing management and on-demand marketing solutions

empowers organizations and individuals to turn their passion for

marketing into valuable customer relationships and more profit-

able, timely, and measurable business outcomes. These solutions

integrate and streamline all aspects of online and offline marketing.

Unica’s unique interactive marketing approach incorporates cus-

tomer analytics and web analytics, centralized decisioning, cross-

channel execution, and integrated marketing operations. More than

1,000 organizations worldwide depend on Unica for their marketing

management solutions.

Unica is headquartered in Waltham, Massachusetts with offices

around the globe. For more information, visit www.unica.com.

Unica Corporation

Worldwide Headquarters

Reservoir Place North

170 Tracer Lane

Waltham, MA 02451

USA

t +1.781.839.8000

F +1.781.890.0012

e [email protected]

www.unica.com

Unica is a registered trademark of Unica Corporation with the U.S. Patent and Trade-mark Office. The Unica logo and MARKETING SUCCESS STARTS WITH U are trademarks of Unica Corporation. All other trademarks are the property of their respective owners.

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