Implemention Technology
Business Intelligence
Data Quality
  Trillium Software System
Data Warehouse Administration
  RODIN by Coglin Mill
Warehouse Engine
  IBM DB2 for AS/400
  IBM AS/400

In 1865, Hongkong and Shanghai Banking Corporation Limited was formed with offices in Hong Kong and Shanghai. HSBC Holdings plc has grown into one of the world's largest banking and financial services organizations, headquartered in London, with more than 5,500 offices in 82 countries and territories, and assets totaling nearly $500 billion (Canadian). Hongkong Bank of Canada (HKBC), a subsidiary of HSBC Holdings plc, is the largest foreign bank in Canada and the seventh largest bank overall in Canada with more than 140 offices nationwide, assets of more than $25 billion (Canadian) and more than 1 million accounts. HKBC's net income was $182 million (Canadian) for the fourteen months ended December 31, 1998, an annualized increase of 13 percent from the previous year.

HKBC offers a variety of financial services from daily banking to long-term investment offerings and funds management. HKBC recently added a number of new services, including discount stock trading, a full service brokerage, asset management, personal trust management and estate planning services. Our goal is to move beyond traditional banking services to offering a broad range of products and services that meet every conceivable financial need of our customers. But to achieve this, we must first understand who our customers are, which products they are currently using, what their needs are and which additional products might be appropriate for them.

Our current operational systems are very effective in automating business processes but, unfortunately, are very ineffective at allowing access to a total consolidated customer view. For example, if a customer had checking accounts and held the Bank's mutual funds, a manual process was necessary to collect the information because it resided in separate systems.

We needed a consolidated portfolio for each customer in order to see "total" customer profitability, not just customer profitability within a specific product. We must effectively consolidate and analyze information from a wide variety of applications and data systems for each product offering to understand the mix of customer relationships, products and distribution channels. The goal was to develop a consolidated view of each customer's total portfolio with HKBC ­ banking products, investments, trusts and estates, and so on.

A Data Warehouse Solution

As HKBC implemented its data warehouse, it selected the Trillium Software System. Trillium not only cleansed and validated the data, but its powerful matching capabilities allowed us to consolidate a customer's myriad portfolios into a single customer view. We now see a complete picture of each customer and which products they use across all of our businesses. In addition, it created household files so we could see the customer profiles and the products used within an entire household. Being able to see the financial picture of a customer not only as an individual but also as a member of a larger household provides a much different picture of a customer's needs and what products might be appropriate for them.

Our data warehouse deals with a high mix of English- and French-speaking Canadian customers and a large number of Asian customers, owing to the relatively high minority population of Asians in some parts of Canada. With some fine-tuning, the software has proven very adept at handling multiple languages.

The data warehouse was implemented in January 1998. The IBM DB2 120GB database resides on an AS/400 Advanced Server Model S30. RODIN by Coglin Mill is used to manage and process the data that populates the data warehouse. BusinessObjects is our OLAP tool. At the time we selected the Trillium Software System, it was only available on Windows NT. We originally ran the application on an NT server. The results were excellent, but it required over 36 hours to complete processing. Trillium ported the code to the AS/400 platform. Once the system was migrated to our AS/400 servers, the same data cleansing and consolidation processing ran more than three times faster. HKBC was the first implementation of the Trillium Software System on the AS/400 platform.

Trillium is used to extract, match, cleanse and validate the customer data as it is acquired from a number of data sources. It filters and processes the data which is then migrated into the enterprise data warehouse. The warehouse data feeds a front-end customer relationship management system which is accessible to all 140 branches of HKBC across Canada. In addition, the data warehouse generates a data mart, providing the framework for household customer and product marketing analysis and sets the stage for further analytical initiatives such as data mining and campaign management.

Records that Trillium cannot match are placed into a "suspects" file. These are returned to the individual branches for cleansing directly in the source systems. This has enabled us to improve data entry procedures and standardize data field formats, reducing data errors.

A Strategic Differentiator

One of our key corporate objectives, as well as a key strategic differentiator for HKBC compared with our competitors, is to deliver the best customer service possible. This means understanding the needs of our customers and finding the best product mix to meet those needs. The additional business challenge is to identify emerging trends and anticipate the changing needs of our customers. To achieve this, we need to understand not only each individual customer, but also the financial profile of the household in which they live. Until the implementation of our data warehousing solution, there was no way to do this.

HKBC now fully understands "the total present and future value" of each customer to the bank. We know not only which services each customer is using, but which additional services would be an appropriate fit for that customer. Products can be marketed much more efficiently, targeting customers who best fit the profile for a given product and thus have a higher "propensity to buy."

In terms of business processes, the system provides more accurate, timely and actionable information for decision making. Reports and analysis that used to take weeks to prepare now can be done in a matter of minutes. Analysis can now be done across an entire household, rather than at the individual product level, providing both a high-level summary as well as detailed information. Product managers can manage their product lines more effectively. For the first time, our relationship managers who handle customer service at all the branches have a common, consistent view of all their customers.

Hongkong Bank of Canada is extremely pleased with the results of building the data warehouse and implementing the Trillium Software Solution. Our data cleansing and matching platform has been adopted as the worldwide group standard for data warehouse and decision support systems. Within HKBC's parent company ­ HSBC Holdings plc ­ subsidiaries in 10 countries are actively working on similar projects.

Practical Advice

Have a clear goal in mind. I believe we were successful largely because we understood our primary goal was creating a single, consolidated profile of each customer/household across all businesses, products and services in order to have a greater understanding of customer relationships, products and distribution channels. This accomplishment helps us maintain our competitiveness in the marketplace.

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