Business Banking

Predictive analytics drive better business lending

Over the years, banks have focused primarily on building business banking relationships by allowing relationship managers to price loans, deposits, and fees charged. But with increased pressure on revenue, banks are looking at a more analytical approach to pricing, with an eye to expanding revenue streams. While banks have made significant progress bringing data and analytics to consumer segmentation and targeted marketing, they generally lag behind in applying that same analytical discipline to understanding the behavior of the business customer.

The missing ingredient for most business banking executives is being able to model client behavior and understand the relationship between price and volume. The Earnix software was designed for just this purpose – to enable banks to quickly derive insights from large data sets and put those insights immediately to work by increasing margin, optimizing fee income, achieving volume targets and improving the business customer experience.

Business deposits and services

The business customer is no different than the consumer. Businesses have varying sensitivities to rates and fees. However, the situation is made much more complex because typical product bundles are composed of Earnings Credits and complex service fee structures. To make matters more complicated, business bankers are given discretion over pricing, backed by claims that they “know the customer.” At Earnix, we believe predictive analytics is the only way to truly understand customer behavior – data should drive results, not real or perceived relationships.

The Earnix platform has the flexibility to optimize all facets of the business banking relationship, from individual deposit and cash management accounts to complete product bundles and Earnings Credits. Once the data is incorporated into the software, business banking executives have the ability to run what-if, forecast and optimization scenarios in just seconds – turning data into actionable insights. Equally important, the Earnix software seamlessly integrates with business banking origination platforms and provides a comprehensive suite of BI and reporting tools.

Business lending

By leveraging advanced analytics, the Earnix platform incorporates behavioral analytics of business clients and turns the art of pricing business loans into a science. Earnix provides a single, powerful platform combining the ability to optimize business loan pricing with the ability to adapt each individual loan interest rate, fee, principle amount and terms in accordance with available market data. Moreover, these insights can be easily integrated with business deposits and services to optimize the entire business banking relationship – whether at the individual business or segment/rate sheet level.
Predictive analytics enables any bank to centrally manage business lending profitability, while providing relationship managers with the flexibility for exceptions. Exception guidelines can be adjusted based on client profile, risk, business relationship or aligned to lending goals.

Earnix also provides a real-time platform that enables immediate deployment of new pricing strategies and business logic, connected directly to the origination system, irrespective of channel.

With Earnix, SME lenders can increase sales while keeping their costs down. They can leverage predictive analytics to ensure that their profitability, risk and volume goals are achieved in a predictable manner.