• Background
  A top 10 U.S. bankcard issuer.
• Challenge
  Improve data integrity to reduce credit risk, potential fraud and marketing expense while improving affinity and co-branding programs.
• Solution
  Identified customers with multiple accounts and households with multiple customers, using Initiate technology to link cardholder and household data.
• Results
  Of two million customers, 10% held cards under multiple identifiers, some with as many as 5 accounts, violating business rules designed to limit credit risk. Also found that 23% of the cardholder accounts shared an address with another account, enabling significant reductions in marketing expense.

Millions of Americans carry credit cards issued by this leading bankcard issuer headquartered in California. Serving 20 million customers, this company is ranked among the top 10 bankcard issuers nationwide.

To stay competitive, this bankcard issuer maintains long-term customer relationships by delivering excellent customer service, consumer credit education, and a wide range of financial products that fit the unique needs of its customers. The company’s flagship product, its branded platinum card, gives cardholders unprecedented access to their FICO® credit scores, as well as retail and restaurant coupons, discounts, and other industry leading benefits. The company’s four distinct rewards programs are also innovative firsts, offering cardholders the highest level of flexibility in how they choose to earn and redeem their rewards points.

Like most financial institutions, this bankcard issuer faces the daunting challenge of accurate, up-to-the-moment master data management (MDM) within and across databases. Constant data updates, such as address and area code changes, as well as the steady flow of new data pouring in from multiple touchpoints, all add up to increased risk of data entry error and deliberate customer fraud. Lack of clean, accurate data also makes it difficult for the company’s underwriters to make informed decisions when processing new applications for credit, increasing the risk of incurring bad debt. In addition, regulations such as the Sarbanes-Oxley Act and privacy issues can put this company at legal and financial risk if customer data is not managed accurately, not to mention the risk of lost customers as a result of poor service due to poor data quality.

This bankcard issuer identified its cardholders by Social Security number. However, data entry errors, customer fraud and identity theft issues made it nearly impossible to accurately identify customers by Social Security number alone. Moreover, this lack of accurate data made it difficult to manage the company’s four industry leading rewards programs effectively. These are essential to customer loyalty and the company’s competitive edge.

The company also suspected that it could save significant marketing costs by reducing the volume of duplicate direct mailings to the same household. However, it did not have an effective way to identify customers in these “duplicate households.” In addition to cost savings, identifying household relationships could help the company customize its marketing campaigns and rewards programs to enhance the value of its cardholder services and boost customer loyalty.

To overcome its MDM challenges, this bankcard issuer engaged Initiate Systems to perform an InitiateJumpStart^SM . This short engagement provided a thorough analysis of data quality residing in the company’s source systems, as well as its policies and processes. Initiate’s data scientists worked closely with the company to not only profile and quantify data quality, but also help the company make the critical direct connection between its data and its business objectives.

During the Initiate JumpStart, Initiate analyzed two million of the company’s 20 million credit card accounts using name, phone number, and address in addition to Social Security number. Data was verified with Initiate’s advanced probabilistic matching algorithms. The analysis revealed that one percent of the customers held accounts under more than one customer identifier—signifying a potential of 200,000 misidentified accounts across the enterprise. Many cardholders within that one percent had as many as five accounts with the company, a situation that violates the number of accounts one person may have with this lender.

The Initiate JumpStart also revealed that this bankcard issuer could save significant marketing dollars by reducing the number of direct marketing mailings. The analysis showed that 23 percent of cardholder accounts were at the same address. By linking cardholder data by address, the company can identify households with multiple cardholders and send only one direct mailing to that address instead of two or more. The company estimates that it could potentially save a significant amount on marketing mailing expenses.

Based on the significant results of the Initiate JumpStart, the company decided to implement Initiate software for streamlined, on-demand MDM.

In addition to internal marketing savings and improved customer service, this bankcard issuer realized that improved data integration capabilities could help quickly evaluate potential affinity and co-branding partners, which is a primary strategic initiative for the company. By accurately comparing its customer data with that of potential partners, quicker and more effective decisions can be made in this arena. In addition, the same solution can be applied to evaluating merger or acquisition targets. Using Initiate software, the company can determine the best prospect for a successful and profitable merger or acquisition.

In a few short weeks, Initiate JumpStart provided this bankcard issuer with a thorough understanding of the potential business benefits of MDM. It also provided a clear roadmap for realizing those benefits.

The bankcard issuer chose Initiate in order to improve the integrity and integration of its customer data. With Initiate, the company has complete, accurate and up-to-date cardholder profiles enterprise-wide, available to people and systems on demand.

As a result, the bankcard issuer can:

• Reduce business risk by better identifying individuals with too many cards
  • Reduce the risk of not detecting attempts at deliberate fraud
  • Reduce the risk of bad debt
  • Reduce the risk of poor underwriting decisions
• Saved significant marketing dollars by reducing the number of mailings per household
• Manage its reward programs more effectively by better understanding its cardholders
  • Understand the total volume of business each cardholder and household represents
  • Improve customer service with a trusted, single view of each customer across the enterprise
  • Evaluate potential value-added features, such as affinity and co-branding opportunities, quickly and more confidently

Initiate JumpStart is a fast, affordable, low-risk way to gain an in-depth understanding of your data today and a plan to get the results you crave. In just four weeks, you'll have the baseline information you need to implement a master data management solution for your organization.

When Initiate JumpStart is complete, Initiate will work closely with you to take the next logical step given your business priorities, plans and budgets.