Note: These are my personal views and not those of my employer, Tata consultancy services
Many years ago I was fascinated by building societies after doing some work for Cheshire Building Society. I wrote an article describing the strategies that I felt that such mutually owned institutions should adopt. I now find the article very simplistic, unnecessarily jingoistic, presumptive and not wide-enough in tangible ideas for action. But my reading, thinking and experience has evolved since then. So here are my key illustrative current thoughts on IT strategies for Mutuals
1. Mutuals have a natural advantage compared to non-mutuals in combining data about their customers, since they typically capture the membership number along with every product/service sold/setup for the customer. Using this to maintain consolidated information (with relatively simpler MDM exercises) about the customer can help in classifying customers into tiers. These tiers and customer aggregates can then be used to customize the pricing and customer experience including making special offers to expand the share of the wallet for that customer.
2. Because their customers own them, their customers are likely to be willing to share more data about themselves than customers of non-mutual organizations. This fact can be used by mutual organizations to to identify ways and means to source more information from their customers/members through wearable's, IoT, IIoT and social media and use this information to generate more value for the Mutual and its customers. Such information can help in better risk selection, pricing, exposure management and capital allocation as well as fraud management.
3. Mutuals typical face restrictions on raising funds in wholesale markets due to being a mutual, this typically means that they need to manage cash/funds and risks (including asset-liability gaps) lot more intensively than others. Due to this, they need to implement business policies/processes enabled through IT platforms which manage operations more tightly than others so that
a. The IT platform helps them to generate maximum cash from operations for investment as well as manage these investments better
b. The IT platform helps them in better risk management (risk selection, pricing, exposure management and capital allocation as well as fraud management).
Would appreciate comments.
Regards
Pratap Tambe
Many years ago I was fascinated by building societies after doing some work for Cheshire Building Society. I wrote an article describing the strategies that I felt that such mutually owned institutions should adopt. I now find the article very simplistic, unnecessarily jingoistic, presumptive and not wide-enough in tangible ideas for action. But my reading, thinking and experience has evolved since then. So here are my key illustrative current thoughts on IT strategies for Mutuals
1. Mutuals have a natural advantage compared to non-mutuals in combining data about their customers, since they typically capture the membership number along with every product/service sold/setup for the customer. Using this to maintain consolidated information (with relatively simpler MDM exercises) about the customer can help in classifying customers into tiers. These tiers and customer aggregates can then be used to customize the pricing and customer experience including making special offers to expand the share of the wallet for that customer.
2. Because their customers own them, their customers are likely to be willing to share more data about themselves than customers of non-mutual organizations. This fact can be used by mutual organizations to to identify ways and means to source more information from their customers/members through wearable's, IoT, IIoT and social media and use this information to generate more value for the Mutual and its customers. Such information can help in better risk selection, pricing, exposure management and capital allocation as well as fraud management.
3. Mutuals typical face restrictions on raising funds in wholesale markets due to being a mutual, this typically means that they need to manage cash/funds and risks (including asset-liability gaps) lot more intensively than others. Due to this, they need to implement business policies/processes enabled through IT platforms which manage operations more tightly than others so that
a. The IT platform helps them to generate maximum cash from operations for investment as well as manage these investments better
b. The IT platform helps them in better risk management (risk selection, pricing, exposure management and capital allocation as well as fraud management).
Would appreciate comments.
Regards
Pratap Tambe
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