Rural Bank in the Philippines secures +21% income from exiting customers

The banking industry becomes more and more competitive every day. Brick-and-mortar banks cannot differentiate their offering anymore, so they go into a price war and lower their fees. At the same time, a new wave of neobanks and fintechs challenges old players by offering their customers modern technology that greatly improves customer experience and reduces the time people need to spend banking. If it is hard to attract new customers, where else can the bank look for potential revenue and profits? This post will help you understand the real benefits of becoming a data-driven organization.

One of our first clients (name not disclosed since the post touches on financial results) that implemented our Cloud Core Banking and Business Intelligence Dashboard was able to optimize their loan product portfolio and generate 21% more income from existing customers. On the very first day, they created several test products that they were able to offer on a limited scale (for specific customers in specific branches only) and they carefully measured success KPIs via Nextbank Business Intelligence Dashboard, and month after month, they were getting to the point where they were offering products with the optimal balance between the profitability and easiness to sell.

Change in total principal released

Looking at the numbers below, it is clear that the total monthly principal released, which is a volume of money that bank lends has not changed much. To be precise, it was 1% higher compared to the same month a year before.

Change in number of loans released

You might wonder now if the reason behind higher income is not a higher number of loans, but with a smaller principal amount per loan, cause in such an approach bank can potentially earn more through a higher number of fixed fees per loan. If you look at the chart below, the number of loans being offered was actually decreased by 18%, which basically means the same total amount of principal released, but with less paperwork and operational effort!

Change in income earned

Finally, the chart below presents how month after month, the bank was able to increase the monthly profit through the increase of unit profit per released loan. 

This shows how much potential still lies with data and how important it is to implement a centralized data and start monitoring it. Remember, data is the king! 

Ready to rock?

If you want to learn more on how you can make your business a data-driven organization with our help, visit our product pages at http://nextbank.ph

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