Bank of the West's CIO Is on a Quest for Real-Time Analytics

At Bank of the West, one of CIO Kirsten Garen's missions is to develop better business intelligence, analytics and data management across the organization.

"Like most financial institutions, it's been a huge push for us for years," she says. "We're in a good place because we invested early in a giant central data warehouse that amasses all the data. We're now able to mine the data and we're starting to partner with the businesses on analytics projects."

In one project, the San Francisco bank is creating what it calls “relationship pricing.” By gathering intelligence on all the services a customer uses across the organization, the bank can offer different tiers of prices. The bank uses miRevenue software from Zafin Labs in Palo Alto, Calif. to calculate the relationship-based prices.

The initiative began two years ago and is now being broadened to all channels and all product sets, whereas at first it was only applied to a narrow set of products, Garen says.

The foundation for this and other customer analytics work is the central data warehouse the bank already has in place. Customer data that flows into the warehouse from the bank's retail channels gives it a way to monitor, report on and mine the channels and apps customers use and their navigation patterns. Individual data projects, such as putting a monitoring tool on an online channel to see how customers are using it, all flow back into the central data warehouse, so that the next group can benefit from that work and understanding of usage patterns.

What Garen is striving for next is a real-time, 360-degree view of the customer on which to apply analytics for real-time decisions.

"We want to make sure you have a good experience with Bank of the West regardless of how you interact with us," Garen says. "If you're on the phone talking to the contact center or chatting with a customer service rep online, the rep can get that [customer] information and a holistic sense of how you're engaging with the bank."

The bank does have real-time data for all normal banking transactions; brokerage transactions are logged in near real time. "Everything has a slight sub-second lag time," Garen observes. For the small business segment, that real-time, cross-channel data is not fully available yet.

Regulation has been a big driver for many of Garen's analytics projects. But she sees this as, at least in part, a good thing.

"It's one of these mixed blessings," she says. "Because we're part of a holding company here in the U.S., there are regulatory requirements that require us to do massive investment in CCAR."

The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise by the Federal Reserve meant to ensure that banks plan their capital reserves properly to account for times of economic and financial stress. As part of the CCAR, the Federal Reserve evaluates banks' capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments or stock repurchases. The CCAR includes a supervisory stress test.

The data gathering, mining and reporting required to comply with CCAR has accelerated the bank's efforts at having complete views of customers from all angles available to customer-facing business groups, Garen says. "I don't know that every financial institution would choose to invest at the speed CCAR has mandated for us, but the outcome is a good one," she says.

The bank's existing data warehouse and analytics technology has been sufficient for this.

"The name of the game with CCAR is scale," Garen says. "There's a massive amount of data fields you have to report on, collect, clean up, consolidate with other companies within the holding company structure [Bank of the West is a subsidiary of BNP Paribas] and then ship off to regulators. We're taking a platform that, fortunately for us, scales. We have products and software in place that all make sense of that challenge."

Data quality and data governance have been key, Garen says.

"Data governance is a big issue for financial services," she says. "Is there one definition for customer and account, for each field? In the history of the financial services industry, there would have been many different definitions depending on which business line you interact with."

CCAR calls for consistent reporting across business lines and has forced data governance discipline across the company and across multiple holding companies. "That's a benefit to technology because it makes reporting simpler. It will make any future analytics process easier when you have that single source of truth, one definition in one place," Garen observes.

Something as simple as a vacation address might be set up one way in one system and a different way in another in the past. "The devil is in the details," Garen notes. "If you're a data modeler or a database owner in a technology group, working with the business to get that lined up across all the channels is tough to get through. But then you're in a wonderful place when you arrive."

Ensuring data quality in some cases is as straightforward as building data scrubbing routines into applications. In other cases, there are more sophisticated lookups in external databases.

Overall, there's more sharing of analytics and data across departments and divisions throughout the bank than ever before.

"That's a goal of creating a central enterprise data warehouse," Garen says. The bank is building distributed data marts that support different businesses. "You'll always have the need to do some ad hoc reporting, you want it to be the most robust reporting you can do, but you want to make sure you know the one source of data."