Implemention Technology
Business Intelligence
  MicroStrategy DSS Suite
  SAS Data Mining Tool
Data Warehouse Engine
  Compaq Servers
  IBM RS/6000 SP-2

Over the last decade, the banking industry has seen a wave of consolidations and increasing competition from non-bank competitors. Keeping existing customers happy and finding innovative ways to bring new ones into the fold is more important than ever for financial service companies with a long-term vision.

At First Union, a nationwide financial services provider with $230 billion in assets, long-term growth is a primary objective. To help achieve that goal, First Union developed a Web-based customer relationship management application that provides a competitive edge for building and maintaining vital relationships with customers.

With the help of MicroStrategy, a leading business intelligence software vendor, First Union built and deployed SIGMA, an advanced intelligence solution that pries open the company's vast data warehouse and compiles its bits and bytes into useful information about customers. SIGMA enables executives and managers to quickly and easily obtain a comprehensive view of customer relationships, analyze their current and potential profitability, and improve business relationships with them. The deployment, completed in February 1999, capped a three-year, $33 million project.

SIGMA allows authorized users to analyze critical customer information and create detailed product and marketing reports in a matter of seconds. Managers can generate customized reports to study market trends using the latest customer information.

At 27 terabytes, First Union's data warehouse is the biggest in the financial services industry and one of the largest in the world. The magnitude of the project, and First Union's desire to open up its data warehouse to authorized users, required partnering with a company such as MicroStrategy whose technology platform can support the needs of very large customer groups and scale to handle vast amounts of customer and product data. SIGMA runs on an IBM RS/6000 SP-2 and was developed using MicroStrategy DSS Suite, including MicroStrategy DSS Architect, MicroStrategy DSS Agent and MicroStrategy DSS Web. The solution runs on MicroStrategy DSS Server, which resides at First Union's corporate offices in Charlotte on a Compaq Windows NT Server.

The SIGMA application has three basic components. SIGMA Executive, a custom EIS built on MicroStrategy DSS Web, enables 200 users to analyze high-level information about the company's relationship with its customers. SIGMA Explorer is also built on MicroStrategy DSS Web and allows 100 First Union bank managers to conduct detailed data analysis. SIGMA Analyst uses a SAS data mining tool to let more than 100 users perform statistical modeling.

SIGMA's three components all use a single source of information and share the same data warehouse. The system's key features include a point-and-click interface, comprehensive drill-down capability for deeper analysis, integrated color graphics and unparalleled processing speed. All of the information is online, and boardroom-quality reports can be produced quickly and easily. Currently, more than 150 customized report templates can be accessed by SIGMA users.

Sidney B. Tate,
Senior Vice President of
Enterprise Information Management,
First Union

For example, with a few mouse clicks, SIGMA users can identify how many customers have a high balance checking account and who would likely be interested in asset management services. These sales leads are then automatically sent to First Union's sales and services organizations for direct, personalized marketing efforts.

With SIGMA, managers can more accurately forecast customer trends and assign resources accordingly. SIGMA helps them identify cross- selling opportunities with specific customer sets by profiling the bank's 16 million customers each month. The frequently updated customer snapshots let managers gauge who might be likely candidates for the company's variety of wealth-building instruments. SIGMA bases its analysis on demographic data as well as customer activity. A customer who closes on a mortgage, for example, might be interested in a home equity loan. Again, these leads are automatically transferred to the appropriate sales and marketing organization for immediate action.

Better direct marketing campaigns and increased selling opportunities aren't the only benefits to First Union's bottom line. SIGMA also allows employees to focus on the jobs they were hired to perform, increasing efficiency and productivity.

Prior to SIGMA, First Union relied on a more complex, slower process to transform customer data into useful information. The company retrieved certain portions of data from multiple source systems, turned it into flat files and shipped it to an outsourcer. Once the flat files were delivered, the data had to be processed and organized. Only then was it ready for analysis using a PC/IS tool. The entire process of collecting, shipping, extracting and cleansing customer data took an average of 68 days. With SIGMA, data processing time has been trimmed to just over 20 days; and usable, accurate reports based on that information are now generated in a matter of seconds instead of weeks.

Most importantly, SIGMA translates into superior customer service. The system allows First Union to build and maintain lasting relationships with customers, whether they seek additional capital for business purposes or a consumer checking account. Marketing campaigns are more effective, resources are allocated more efficiently and managers are more productive. The sum of all those things is a fatter bottom line.

To get SIGMA where it is today, First Union started small with a select group of users and specified reporting targets. SIGMA is now being deployed throughout the company as employees are trained. A successful business intelligence strategy based on a multi-terabyte data warehouse like First Union's requires a coordinated team effort that builds on the success and lessons of initial deployments. What is learned from the first tests can then be applied to accomplishing the company's ultimate data warehousing and business intelligence goals.

Working with MicroStrategy, a business intelligence pioneer with years of experience analyzing large customer-centric data warehouses, also facilitated First Union's SIGMA project.

First Union's and Micro-Strategy's commitment to the project is clearly paying off today. The company sees the time and money put into SIGMA as money well invested, and it's already yielding many positive returns. The customer service edge SIGMA gives First Union should build loyalty with its current customers and help it attract new ones to keep growing over the long term.

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