Data-driven approach enables bank to access $20 billion market opportunity

The Challenge

With consumers taking an increasingly active stance in managing all their financial assets, institutions must be ready to adapt targeting and pricing strategies—using data and digital capabilities to differentiate experience and engage consumers.  

This bank believed it had a strong opportunity to grow their non-interest income through an enhanced private banking offering, growing both market share and share of wallet. Executives had varying hypotheses around the potential for such an offering—but the bank lacked data to prove or disprove these theories, hindering its ability to plan effectively. Specifically, executives wanted to understand the potential market size and the factors affecting the bank’s “right to win” among these segments. 

Answering their questions required combining specialized third-party data with the bank’s own data, conducting sophisticated analyses to assess the potential value and costs of serving different customer segments with distinct wealth management strategies—while applying perspectives on leading and emerging industry practices to project potential. That requires an abundance of data and analytics power combined with deep industry Insights—which is why they called West Monroe. 

An undeniably different approach

We rallied a team with retail banking experience and data analytics expertise, helping the bank uncover data driven insights and driving alignment across a leadership team with differing viewpoints. 

Working with distinctive data sets provided to the client by Equifax, we helped the bank create a complete view of customer assets both within and outside of the institution—down to the household level. This collaboration produced answers—including findings that some executives did not expect. 

Here’s what we did to get there:

• Appended Equifax’s data showing total deposit and investable asset levels to records in the bank’s existing customer database. This enabled more accurate determination of penetration levels and relationship primacy for the analysis, but also provided a foundation for other analysis the bank could pursue in the future.
• Defined customer segments based on factors such as overall wealth, depth of relationship with the bank, and demographics—enhancing insight into customer relationships.
• Identified early a significant deviation between client’s assumptions about its share of deposit penetration for high-asset customers and what was proven out in the data. This insight led to a strategic shift in focus.
• Used segment-level analysis to create a financial model dynamically comparing scenarios for expanding reach into the broader market as well as growing wallet share with existing customers. The model incorporated more than 15 broad factors—each with multiple detailed variables and sensitivities—that impact revenue potential and underlying expenses.
• Identified qualitative implications for deposit levels and wealth management opportunities—the “what you must believe to be true”—that impact each potential scenario.
• Led an executive workshop with diverse stakeholders, using data and analysis to reach consensus around the path for increasing the bank’s “right to win” in the wealth management space, specifically, as well as more actively banking mass affluent and high net worth customers broadly. 
  
  
  

Real results

With new household-level insight into available market wealth and current penetration, executives can now make more informed decisions about deposit and wealth products and services.  

We found a significant gap in the bank’s approach to serving customers with high levels of both investable assets and bank-held deposits that would limit the upside potential of a wealth management offering if not addressed. Our analysis also revealed an even bigger opportunity: More than 90% of the bank’s revenue potential lies with customers with a light deposit relationship today—and these customers have 3.5x the average household wealth of those with deeper relationships. While this represented a shift from the bank’s original focus on wealth management, it’s leading to a more holistic set of services for targeting this valuable but underserved customer group. Acting on these recommendations could increase fee revenue by as much as $500 million annually.  

Segmentation analysis also isolated 45,000 specific households with the highest value potential for both fees and deposit growth. This provides clear direction for which customers to target (and which to avoid) for marketing and relationship activities, increasing the efficiency of marketing spend by more than 4x.