Preventing Corporate Customer Churn

Challenge

A multinational financial services company manages hundreds of billions of dollars in corporate cash balances, providing standard cash management and banking products to fulfill the payment, receipt and reporting needs for over 200,000 global clients. The bank compensates clients by paying interest on the cash it holds and generates revenue through fees for its banking products and the spread between the rate paid to clients and the rate captured by the bank, often via overnight lending. Increasing the size of its corporate cash portfolio and optimizing its interest rate margin are key objectives for the bank’s cash management operation.

The highly volatile daily fluctuations of corporate operating balances, coupled with the large number of clients covered by each relationship manager make it difficult for the bank to understand client satisfaction with the interest rate, products and services offered. The bank determined there was potential for an AI-based approach to predict which clients are most likely to churn, or permanently withdraw significant balances, and to optimize the rates offered to each client. Such improvements enable the cash management team to maximize customer satisfaction while increasing cash balances and interest margins, driving significant economic value to the bank.

Approach

Using the C3 AI® Cash Management application, the bank is now able to predict customer churn with up to 90 days advance warning. In addition, C3 AI Cash Management detects customer rate sensitivity and provides a comprehensive view of customer behavior. Together these capabilities help the bank’s treasury sales team take targeted and proactive steps to reduce corporate customer churn.

About the Multi-National Bank

  • $100 billion annual revenue
  • $100s of billions in corporate cash balances managed
  • 200,000 corporate cash management clients

Project Highlights

  • 16 weeks from project start to production-ready application
  • 3 years of historical data from 7 data sources
  • Provide up to 90 days early warning for 50% of customer churn
  • $60 – $80 million in expected annual economic benefit to the bank
  • 4,500+ time-based expressions constructed for machine learning models
  • Workflow-enabled user interface to facilitate client reviews and targeted action

C3 AI Cash Management Benefits to Corporate Cash Managers

  • Reduce customer churn leading to a larger portfolio of cash balances and higher revenue
  • Increase rate margin by understanding client rate sensitivity
  • Improve customer satisfaction resulting from targeted action by the bank
  • Analyze client and market activity and other relevant time-series data in a single interface
  • Apply advanced risk analytics and machine learning at-scale
  • Produce interpretable model outputs that explain key contributing features

Results

50%
Correctly predicted balance attrition with up to 90-days of warning
$60-80 Million
Expected annual economic benefit from saved balances and targeted rate change offers

Solution Architecture

C3 AI Suite

Enterprise AI for Financial Services

The C3 AI Suite provides the necessary, comprehensive capabilities to build enterprise-scale AI applications 40x faster than alternative approaches. The C3 AI Suite applies machine learning to all relevant data sources to rapidly generate predictive insights that can be used to enhance rules-based banking systems, improve critical compliance and operational processes, and transform customer experiences.

A recent study of the value chains of three major global banks demonstrated that the annual economic value of the C3 AI Suite deployed across each enterprise could exceed $100 million.

C3 AI Suite

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