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April 23, 2024
Wanna know how a leading full-service commercial bank like HDFC Bank might be using customer demographic & product fit analysis method to improve financial performance? Read here! :)
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You've probably heard about HDFC Bank, right?
It's this giant in the Indian banking world that pretty much has a credit card solution for anything you can think of - from everyday purchases to building a financial safety net for those rainy days.
HDFC Bank, one of India's premier banking institutions, showcases impressive financial health and operational strength in the banking sector.
According to the Reserve Bank of India data for November 2023, HDFC Bank’s cards in circulation stood at nearly 19.51 million as compared to 19.18 million cards in October 2023.
HDFC Bank is followed by SBI Card, ICICI Bank, and Axis Bank, in terms of the number of credit cards issued.
1. Credit Card Issuance: HDFC Bank has issued over 14 million credit cards to customers.
2. Market Share: Holds an estimated 24% share of the Indian credit card market by volume of transactions.
3. Annual Spend: Credit card transactions through HDFC Bank are estimated to exceed INR 1.2 trillion annually.
4. Digital Engagement: Over 85% of credit card transactions are conducted digitally, via online or mobile platforms.
5. Fraud Incidents: Maintains a fraud incident rate significantly below the industry average, at less than 0.02% of transaction volume.
6. Customer Satisfaction: Scores above 80% in customer satisfaction surveys, particularly in categories such as customer service and rewards redemption.
7. Rewards Redemption: Customers redeem rewards points valued at over INR 5 billion each year through the bank's credit card rewards program.
Let’s Inspect our Credit cards sales Data. The dataset consists of six entries capturing credit card transactions, each delineating key attributes such as customer details, transaction specifics, and financial terms. It includes fields like customer name, advisor handling the transaction, annual fee, commission earned, transaction category (predominantly "CREDIT CARDS"), and transaction dates. Additionally, managerial hierarchies, including national heads, zone heads, and sales managers, are documented alongside location specifics such as city, state, and PIN code. The dataset provides insights into credit card transactions facilitated by advisors, detailing associated fees, commissions, and payment cycles, as well as the specific credit card products and banking institutions involved.
The Customer Loan Data contains over 15712 rows and 12 of our Columns have String Data type, 3 of our Columns have Integers Data Type, 2 column have Float Data type and 2 of the columns have Date Data Type.
To start with the analysis of demographics and product analysis, it is necessary to follow the 4 factors of Data Analysis and that are :
1. Identify the users or stakeholders for the dashboard.
2. Design Empathy Map to define Users' Goals and Challenges or pain points.
3. Identify Metrics or KPIs Matter the Most.
4. Understand the Objectives and Goals.
5. Ask Business Questions
I know it looks a bit overwhelming, that's why in this article, we'll lay the foundation for a top-notch Workforce analysis.
Define the User or stakeholder who will use the customer demographic & product fit data story. In our case, We’ll use a Financial Services Manager. Recognizing their diverse needs, challenges, and priorities becomes the cornerstone for tailoring an effective data story.
To truly connect with the experiences and expectations of a Financial Services Manager, the creation of an empathy map is invaluable. This visual tool allows for a deeper understanding of the emotions, aspirations, and pain points of users.
By empathizing with their perspectives, we can design a data story that not only meets functional requirements but also resonates with the human elements of their roles.
Once an empathy map is ready. As a data analyst, you need to decide on the most important things to keep an eye on, called KPIs (Key Performance Indicators).
The heartbeat of any analysis lies in KPI’s and their Metrics. It's crucial to identify the KPIs that matter most to achieving the defined objectives and by focusing on the most relevant metrics, organizations can gain actionable insights into demographics and product analysis.
Now, on the basis of Empathy Map and KPI’s, we need to define our goals and objectives of the Users. So, that it will align with the data story functionalities to ensure decision making. Here are the Key Objectives & Goals :
Enhance credit card product alignment with customer demographics, ensuring product relevance and appeal. Aim for improved financial performance through strategic advisor engagement and optimized commission structures, leveraging insights from KPI analysis.
Beyond KPI’s, organizations must engage in business-driven inquiry. This involves asking strategic questions that directly align with overarching business objecti
We can infer that while HDFC Bank is offering high commissions and has a significant market share with its HDFC Signature cashback credit card variant, it's not efficiently monetizing its customer base, resulting in a shortfall in revenue compared to commission expenditure. Additionally, Kotak Bank's efficient processing of advisor commissions suggests good operational efficiency in that aspect.
The analysis suggests a significant opportunity to optimize credit card product offerings and advisor incentives based on customer demographics and financial performance metrics. By addressing the misalignment between annual fees and commissions, particularly with certain banks, and leveraging demographic insights for targeted marketing, there's potential to enhance sales volumes and financial efficiency. Moreover, focusing on high-commission products and refining commission cycles can improve advisor motivation and performance, contributing to overall business growth and customer satisfaction.
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