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Strategic customer management for business banking portfolios

Strategic customer management for business banking portfolios

A practical decisioning approach to improve portfolio management

Customer management (or account management, as is often the case) for consumer lending portfolios has been a defining feature of financial institutions for many years. However, in managing business banking portfolios, this feature has been adopted in a less uniform manner, going from some of the most sophisticated and leading-edge practices within the financial institution industry as a whole to very rudimentary practices with offline scores created but utilized infrequently.

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This white paper is targeted toward those wishing to improve their capability for business banking customer/account management by making greater use of decision tools.

It examines each of the areas within the decision tool environments, highlights how these help and provides practical examples relative to business banking decision- making processes. The document covers:

  • The nature and type of the business banking segment that is suited to automated decision making.
  • What an automated business banking customer management decision-making environment might look like.
  • The many data sources that add value in business banking decision making.
  • Understanding the use of models, segmentation and strategy setting for business banking.
  • The benefits that early adopters already have achieved.

Using automated tools for customer management has enabled retail lenders to materially reduce the cost of lending and improve service to customers while maintaining portfolio quality within the lenders’ risk appetite. Typical results include:

  • Time to decision reduced by 20 percent to 30 percent.
  • Cost efficiencies of 5 percent to 10 percent.
  • Improved bad debt rates of between 1 percent and 5 percent.

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