Banking & Financial Sector

Industry Requirements:
In order to improve bank capital adequacy and liquidity, the third of the Basel Accords was developed in a response to the deficiencies in financial regulation revealed by the global financial crisis. Basel III proposes many newer capital, leverage and liquidity standards to strengthen the regulation, supervision and risk management of the banking sector. The effective management of credit risk is a critical component of a comprehensive approach to risk management and essential to the long-term success of any banking organization. Most financial institutions globally are required to identify and report transactions of a suspicious nature to the financial intelligence unit in the respective country.Know your customer policies are becoming increasingly important globally to prevent identity theft fraud, money laundering and terrorist financing.

Banking and Financial Services industry organizations also face number of challenges to stay on top of each other in the industry competition. Higher funding costs, Risk of customer attrition, complying with stringent statutory regulations, and lack of a comprehensive check on customer risk profile lead to operations in an uncertain business environment . They not only need to retain existing customers, but also to attract new customers. This leads identifying and supporting profitable customers, improved operations and action-oriented intelligence.

Pain Points:
Know your customer (KYC) is the due diligence that financial institutions must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them.As different business units approach the same customer through multiple channels , repetitive customer data creates a huge data quality problem for the institutions. Traditional Identity Resolution techniques like fuzzy logics based on simple phonetics and match codes employed or embedded in numerous banking products (such as Core Banking, Retail and Lending, AML and Compliance, Credit Scoring , Customer Analytics , Business Intelligence solutions, etc) do not scale up to large volumes and require large hardware for processing and performance is a business critical problem. Due to this the organizations resort to rudimentary identity check and thus expose the organization to a risky customer as well as lost opportunities in cross sell / up sell of their products to a good customer.

How Posidex addresses the pain points:
Posidex has created a number of solutions each designed to address effectively the customers pain points.

Posidex External List Check Solution
This solution enables the banking and financial organizations to match on a negative list or an external watch list of the institution. Currently in many organizations, each business unit and their application processing system independently interact with the negative or external watch list . These leads to mutiple copies of watch list all of which may not be updated at all times. Also there is a risk of each application processing system having its own set of matching rules leading to loss of integrity of the matching system while posing big risk for the AML compliance. Posidex External List Check solution enables the institution a seamless way of interacting with various application processing system to provide a single comprehensive match against the negative or a watch list. This enables the institution to govern the watch list or the negative list effectively and enable consistency of matching rules across all parameters.

Posidex External List Check solution is built on PrimeMatch^® , a very innovate and powerful entity resolution technology to deliver realtime processing on millions of records with utmost precision. The whole effectiveness of AML compliance ultimately depends upon the underlying entity resolution.

Single View of the Customer
Many of the banks and financial institutions have distinct business units to handle retail loans each catering to a different product for example, Credit Cards, Personal Loans, Motor Loans, Farm Equipment Loans, Housing Loans etc. Since each of these units have multiple channels of customer acquisition and each of them operate independently.Due to lack of comprehensive realtime check , the bank or the financial institution does not get the real time exposure of the customer during the credit check process and might end up in giving multiple loans to the same customer. It is also seen that sometimes if the loan is rejected in a POS and before the details can be percolated across other POS , the customer takes the advantage of lapse of time and end up in getting the credit at another POS.

Traditional Identity Resolution techniques like fuzzy logics based on simple phonetics and match codes employed or embedded in numerous core banking products act on their own databases and are not designed to work across multiple CAS. Therefore to know the overall customer exposure , the organization has to have a centralized system which can interact with each CAS database and bring out the single view of the customer which can help the credit risk manager of each of the retail unit to take a sound decision.

The SVC Solution from Posidex is designed to address the pain point of the customer .The solution helps the banks to create a centralized repository of the customer from across all the CAS databases . It provides the integration interfaces and the controls through which each CAS can interact with the databases of other CAS for a real time exposure of the customer. The solution also allows for realtime field update of the customer data so that the information available is upto date and accurate.

Posidex Clean Customer List solution for marketing campaingns
Banks and Financial Institutions often rely on the BI solutions to perform analysis of their portfolio to improve operations. This portfolio is usually a set of customer data taken out of their data warehouse. However the BI solution does not look into data quality aspect and are focused only on the process of analysis on the data available at hand. Therefore there is a need for the institutions to identify a accurate and unique set of data for the purpse of BI. As the volumes increases to ten of millions of customer master records, identifying unique set of customer data is challenging and a gigantic task.

Posidex Direct Marketing solution helps the organization to quickly deduplicate the set of customer records and match them with the negative list to create a clean and unique customer list. This data is then linked with their transactional data and fed into the BI systems for a accurate analytics and scoring.

Benefits of Posidex Solutions

• Substantial improvement in credit decisioning process
• Accurate data for BI analytics and credit scoring
• Effective compliance of AML regulations and risk mitigation
• Integration with core customer acquisition system to meet KYC in real time.
• Integration with core lending to detect number of attempts made by applicant and overall customer exposure.
• Creation of clean list of customers for marketing campaigns (Cross Sell /Up Sell) .
• Address key business issues in target customer profiling, identifying cross/up selling opportunities and reducing customer churn leading to higher profitability with minimum default risks.

Client Testimonial "This is to certify that a customer database was deduplicated using PrimeMatch^® engine of Posidex. Matching rules were formed on different combinations using the Name, Father Name, Address, DOB, Phone, Mobile, Voter ID, PAN. The rule engine and the inbuilt data dictionary is configurable and allows us to determine the confidence of matching. We are fully satisfied with the quality of output. The support of Posidex Technologies is commendable "

Testimonial in PCQuest "...This has resulted in an average dedupe percentage of 47% with Posidex as against the 21% with the older logic. The total estimated savings will be US $5 million PA assuming a 5% increase in approval and decline rates under the Posidex dedupe match logic and US $10 million PA with an assumption of 10% increase in approval and decline rates. All this has led to an almost 10 times improvement in processing speeds with minimal hardware requirements."

Testimonial by a consumer finance company "As a part of our attempt to an improved credit quality process, we have successfully inte-grated PrimeMatch^® with our core lending system for entity dedupe, property de-dupe and found it to be extremely useful to support our credit decision process and business risk management. The performance of the search engine in terms of quality of matches and the speed of the response is excellent for even large volumes of data. We are also very satisfied by the support of-fered by Posidex Technologies."

For more details, refer to Benefits of Posidex products and solutions