THE TEMBERTON APPROACH

Financial Services Solutions

Despite a series of crushing blows over recent years, financial institutions are focused on recovery. Companies looking for ways to cut costs and increase revenues are seeking more effective risk management, stronger customer relationships, and enhanced compliance with governmental regulations. Temberton can help clients achieve these goals by providing strategic solutions developed over 20 years of experience in the industry.

The financial services industry has been demonstrating its resilience in the face of sustained economic turbulence. Many companies continue to strengthen their business models by investing in business intelligence solutions.

Credit Risk Management

In the wake of the credit crisis, effective risk management processes are more essential than ever to the health of lending institutions. Temberton provides end-to-end solutions across the credit life cycle, managing loans from origination to servicing through collection and recovery. Our systems allow companies to:
• Acquire and maintain customers more effectively, using insights achieved through data analytics
• Manage portfolios more profitably by keeping track of performance, detecting trends, and identifying customer needs
• Protect themselves from potential credit risk exposure with our comprehensive account monitoring service that aggregates credit data across multiple sources and integrates with existing risk mitigation processes in the organization
• Optimize collection and recovery efforts by using our mathematical algorithms to design a high-yield, cost-effective strategy

Marketing and Customer Relationship Management

In an age of eroding customer loyalty, intense marketing, and fierce competition, financial institutions must rely on best practices and sophisticated analytics to grow customer relationships.
Temberton has been helping banks, credit unions, and other financial organizations to make optimal use of their customer information to build, nurture, and maximize lasting customer relationships. Our business intelligence tools, customized for financial services companies, can dramatically improve marketing outcomes when it comes to acquisition and retention, cross-selling, profitability, and customer service. Our services include:
• Skillful customer data management that guarantees clean, consistent, accurate, and timely data
• Powerful data mining and analytics that predict customer behavior, such as likelihood to attrite or
likelihood to buy
• Customer segmentation based on demographic, geographic, and behavioral data
• Easy-to-use reporting tools that keep decision makers apprised of the latest information

Regulatory Compliance

In an environment of intensified government scrutiny and tightened regulatory controls, banks are under constant pressure to ensure that their regulatory systems are up to date and in compliance with the latest legislation.
Temberton’s credit analytics and reporting platform, based on quantitative risk management algorithms, enables clients to respond to the changing regulatory requirements and enhances their competitive positions with all counterparties. Most important, it allows them to minimize their risk capital requirements.

x Financial Services Case Study 1

Strengthening Customer Relationships for Financial Advisors

Challenge

Our client, a financial advisory services firm, was looking for ways to maximize their relationships with valued customers. Having already implemented the basic elements of customer analytics (i.e., scoring their customers for profitability and evaluating their overall satisfaction), they wanted to go beyond their existing capabilities and invest in a stronger, smarter CRM strategy. Temberton was asked to help our client determine which activities were most crucial in creating a positive customer experience and a profitable relationship.

Solution

Temberton developed a Financial Advisor Scorecard model, using key activities within the financial advisory process as metrics for a successful client relationship.

Outcomes

Working with this scorecard, we were able to support our client’s strategic CRM efforts by using insights derived from their customer data. Our deliverables included:
• Defining the combination of products, services, and behaviors essential for nurturing a strong advisory relationship with clients
• Assessing the strength of the advisory relationship between individual clients, Financial Advisors, and the client company
• Demonstrating how the scorecard could be used to support the development of business strategies for Financial Advisors and Branch Managers

x Financial Services Case Study 2

Mitigating Credit Risk with Comprehensive Account Monitoring

Challenge

Lending organizations have seen their loss rates grow to unprecedented levels as economic turbulence has impaired many borrowers’ ability to make good on their loan payments. Our client, a major lending institution, needed to shore up its credit risk management system in response to the financial crisis. The company was receiving customer credit data from the major credit bureaus but faced challenges in using this information effectively across the organization to monitor accounts, predict exposure, and collect on debts. Temberton was called in to establish a risk mitigation process that best fit into the organization’s credit and operations workflow.

Solution

Combining organizational and technological approaches, Temberton designed a comprehensive risk mitigation system that keeps the bank’s credit organization up to date with the credit health of their lending portfolios and integrates seamlessly with the underwriting and collections organizations to initiate line reduction, closure and workout processes. The Temberton solution also tracks the results of the loss mitigation efforts, providing the risk management team with a full set of key performance indicators.

Outcomes

Temberton’s system facilitated more effective account monitoring for the client by providing timely credit information and performance indicators to risk executives, as well as maintaining a smooth workflow with other departments involved in risk mitigation. As a result, our client was able to save over five million dollars of annual losses and workouts.

x Financial Services Case Study 3

Minimizing Risk Capital Requirements with Enhanced Regulatory Reporting

Challenge

The Basel II efforts are geared towards improving risk management, providing accurate risk measurement, communicating those measurements to senior management and the public, and relating risk to capital requirements and to the supervisory focus. The Basel II accords require sophisticated quantitative risk management algorithms to reduce the buildup of excessive unintended credit risk. Banks that develop their own customized risk measurement systems are rewarded with potentially lower risk capital requirements. In an effort to minimize its required capital reserves, our client – a major U.S. bank – asked Temberton to develop a credit reporting system to support the development and implementation of sophisticated quantitative risk management algorithms.

Solution

In response to the client’s requirements, Temberton developed a data repository that features:
• Extraction from multiple data repositories
• Consolidated loan level views
• Reconciliation to financial and risk reporting
• Detailed documentation and data traceability across the entire process to track down anomalies and address regulator inquiries
• Full process automation to complete the monthly cycle within hours of data availability

Outcomes

Temberton’s credit analytics and reporting platform allowed our client to shift toward a more proactive approach to risk management. It facilitated our client’s flexibility to respond to the changing requirements and numerous requests from the federal and state regulators and enhances their competitive positions with all counterparties. Most important, it allowed them to minimize their risk capital requirements.