THE BOTTOM LINE

StonehamBank uses Datawatch Monarch Report Analytics to extract and combine data from its customer information system and other data sources. In examining the bank's use of Monarch, Nucleus identified benefits in two areas. First, insights from Monarch reports enabled higher customer service levels, better cross selling, and increased adoption of mobile banking, which led to reduced call center costs. Second, by improving productivity, Monarch enabled the bank to grow without adding new staff.

• 25 percent increase in mobile banking adoption rate
• 80 percent reduction in the time required to refine and analyze daily operational reports
• 90 percent reduction in time required to test homegrown integration assets

THE COMPANY

StonehamBank is a cooperative bank located 15 miles north of Boston and has been in operation since 1887. Retail services provided by the bank include checking accounts, savings accounts, certificates of deposit, residential mortgages, mobile banking, and debit card services. The bank also provides lending, deposit, and cash management services to small and medium-sized businesses in the local community.

THE CHALLENGE

As a cooperative bank competing with larger regional and national banks, StonehamBank is under intense pressure to maximize its revenues and customer satisfaction levels while minimizing operational costs such as labor. One way the bank achieves this objective is by mining its operational data sources for information that employees use to deliver more products and services to its customers. Although employees were skilled at learning about customers and products by analyzing data from the bank's various systems, including a document imaging system, a customer information system, reporting from third parties, cloud-related data sets, and even data stored on laser discs, a lack of integration among these data sources often caused analytical projects to be more labor intensive and costly than the bank wanted.

THE STRATEGY

Requiring as much visibility into its customer base as its larger rivals have, the bank had three alternatives for overcoming its integration challenges. First, the bank could create a significant amount of custom code for migrating and integrating data from its various data sources. The bank could also have created new workflows and dedicated personnel to the hand coding of new reports based on existing reports. A third alternative was to broaden its use of Datawatch Monarch Report Analytics platform which could automate new report creation and analysis by extracting data from the banks existing reports.

Viewing the manual creation of either integration assets or new reports as too costly and error prone, the bank opted to overcome its data integration challenges by broadening its use of Monarch, which had been used for accessing and extracting data from existing CIS reports. By broadening use of the application to include data from additional data sources and reports, decision makers in a variety of bank roles would be able to more rapidly obtain information about transaction activity, products, customers, and their preferences. For example, instead of manually combing through a standardized 200-page report from a third party vendor supporting the bank's mobile application, an employee wishing to identify all customers not enrolled in mobile banking would use Monarch to extract only the slice of data relevant to mobile banking and complete their analysis with just a 3- page report. Extracts from the bank's CIS system would then be added to plan a marketing effort.

Three steps were taken in order to broaden use of Monarch and increase returns on both this application and the bank's CIS system. First, Monarch was integrated with the company's various data sources, including the document imaging system, a customer information system, reporting from third parties, cloud-related data sets, and data stored on laser discs. Second, a training program was created and given to all existing employees as well as newly-hired employees. Trainees were taught how to use Monarch to extract and analyze data from the bank's various data sources. Trainees were also taught about the importance of using Monarch, rather than manual processes for reporting and decision making. Third, mid-level managers used face-to-face meetings with decision makers to create a culture that promoted the use of Monarch to accelerate report building and analysis and frowned upon manual workflows in support of these tasks.

KEY BENEFIT AREAS

Monarch is used in a variety of StonehamBank's departments including auditing, finance, deposit operations, and loan servicing to automate the extraction of data from the banks existing reports, customer information system, cloud-based assets, and third party data sources. By using the application to improve decision making and increase productivity, the bank has been able to increase its revenues and profits without adding new staff.

Direct benefits

Direct benefits achieved as a result of Monarch included:

• Reduced call-center costs. By using Monarch to examine data in the bank's customer information system, staff was able to identify customers who had not adopted mobile banking. After targeting these customers with promotions prompting them to adopt this more cost effective way of interacting with the bank, call center volumes were reduced.
• Avoided headcount. With a customer information system that creates reports that are typically 200 to 300 pages in length, the bank's reporting area receives a significant volume of ad-hoc requests from analysts seeking a narrow slice of data within a much larger report. By using Monarch to extract data from larger reports, rather than manually creating reports in Microsoft Excel, the reporting department was able to meet the bank's growing reporting and analysis needs without hiring a new report builder. Indirect benefits By using Monarch to expand reporting and analysis capabilities, the bank achieved indirect benefits that included:
• Reduced application testing. Whenever the bank adopts a new integration tool or reporting application, project team members need to test all of the data points in the new reports before going live. By using Monarch to automate the creation of reports for use in parallel testing, deployment teams reduced the length of time required for an average application test from several days to several hours.
• Improved analyst productivity. By automating report creation, Monarch has increased the productivity of analysts outside of the bank's reporting team, in departments such as loan processing and marketing, by approximately 10 percent.
• Avoided partner fees. The bank has numerous relationships with outside vendors and partners in which the exchange of large data volumes is required. By using Monarch to automate the creation of reports required in these relationships, the bank has been able to avoid customization fees typically charged by such partners.
• Increased customer satisfaction. By using Monarch to rapidly build reports for learning more about the banks customers, changes have been made which broaden customer relationships. For example, by using Monarch to identify customers who do not use mobile banking, the adoption rate for this service was significantly increased, making it less likely that customers would switch to another financial institution. Monarch has also been used to better understand which products and services customers want. By accommodating these preferences, the bank achieved important, though unquantifiable increases to customer satisfaction and customer retention levels.

BEST PRACTICES

One reason StonehamBank has been so successful with Datawatch is that the bank has encouraged its employees to use Monarch to eliminate manual processes and improve their decision making. Whereas most organizations achieve high returns on analytics by first deploying this technology on a project or department-specific basis, and later broadening its use on an as-needed basis, StonehamBank was far more active in extending the adoption of Datawatch Monarch to new user groups and decision making processes. Best practices that the bank has applied to promote the use of Monarch include:

• Identifying pain points. Champions of Datawatch in the bank's reporting area regularly visit with analysts and managers to identify processes that are labor intensive or error prone and find ways to improve them with Monarch.
• Allying with users. The reporting department and members of senior management regularly acknowledge that employees are often asked to do more with less. By acknowledging this difficulty with both managers and their direct reports, and promoting Monarch as a solution, the bank is able to elicit new productivity-improving applications of Monarch.
• Promoting productivity. Unlike many corporate cultures, where technology is viewed as a threat that can result in layoffs, technology is viewed as an asset at StonehamBank. The bank's CEO has the publicly stated goal of using technology to achieve productivity improvements that enable the bank to grow without adding staff. As a result, midlevel managers at the bank use face-toface meetings and training to encourage employees to find new ways to improve their productivity and decision making so that they can spend less time on reporting and analysis and more time on banking activities such as deposit gathering and loan underwriting.

CONCLUSION

Increased productivity was the key benefit to StonehamBank's use of Datawatch Monarch Report Analytics platform. By using the application to extract slices of data from reports created by the bank's customer various data sources, employees are able to create new reports and complete analyses faster while improving their decision making. Identification of cost-reduction opportunities by senior management was also important. By creating a culture in which employees were rewarded for using Monarch to eliminate manual processes, the bank enabled significant improvements to productivity and decisions impacting revenues and customer retention.

© 2011 Nucleus Research, Inc.
Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leading provider of bottom line-focused technology research and advice.
NucleusResearch.com
December 2011 Document L125

Nucleus Research Inc.
Corporate Headquarters
Nucleus Research Inc.
100 State Street
Boston, MA 02109
Phone: +1 617.720.2000

Download PDF

Listen to podcast