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July 26, 2010updated 04 Apr 2017 1:10pm

Accenture and SAS strike analytics deal

Edwin Van der Ouderaa, global managing director of financial services analytics at Accenture, and Duncan Ash, financial services marketing manager at SAS, tell Farah Halime about the venture.

By Farah Halime

Accenture and SAS have agreed to jointly develop predictive analytics solutions in a first for both companies. Edwin Van der Ouderaa, global managing director of financial services analytics at Accenture, and Duncan Ash, financial services marketing manager at SAS, tell Farah Halime about the venture.

 

Edwin Van der Ouderaa, AccentureAccenture, the consultancy, technology and outsourcing firm, has struck a deal with SAS, the analytics software and services firm, to expand their strategic relationship. The firms will jointly develop, implement and manage next-generation predictive analytics solutions, a first for both companies.

Predictive analytics takes the information made available through standard analytics and combines it with more sophisticated statistical modelling, forecasting and optimisation techniques to anticipate the impact on business outcomes.

Under the deal, the two companies will make “significant joint investments” in developing solutions based on industry-specific predictive analytics applications. Starting with financial services, including banking and insurance, the agreement will expand to health care and the public service sector.

The move comes as an extension of a long-term partnership between SAS and Accenture, which began in 1998.

For Duncan Ash, financial services marketing manager at SAS, it made “obvious sense” to work together on a new project.

Neither company would talk about specific banks involved in the partnership but it is likely the firms will tap into the relationships it has already built across the globe.

Intesa Sanpaolo, HSBC and Bank of America (BofA) were among the case studies referred to by SAS and Accenture with relation to either fraud, risk management or segmentation software.

 

Return to the forefront

According to Edwin Van der Ouderaa, global managing director of financial services analytics at Accenture, the field of analytics has returned to the forefront of the strategies of top-tier banks.

Van der Ouderaa told RBI: “Analytics is a booming field. We see there is an enormous uptake of interest for our clients. Analytics are being used in a strategic way.”

Van der Ouderaa, who has been with Accenture for 16 years and a senior executive for the last 10, added there was also a strategic reason for the firms to get involved in providing analytics to retail banks.

With the arrival of Basel III, which will implement stricter capital requirements from banks, capital will become more expensive and scarcer putting pressure on banks. For Van der Ouderaa, analytics helps to optimise the capital banks use and be as efficient as possible.

“[Analytics] used to be a cryptic segment dealt with only by the chief risk officer, but now it is a central part of the strategy,” he said.

In a further note of optimism, Van der Ouderaa said his work with “high performers” during the credit crunch had made it clear that for the next generation of top tier banks analytics will be key.

“This is the field where it is going to happen,” he said.

William Green, Accenture’s chairman and chief executive, reiterated at the time of announcing the agreement that companies using analytics technology will “substantially outperform competitors over the long-term”.

The key to the latest analytics update, for Van der Ouderaa, is that it has become real-time and predictive, as opposed to a calculation that was done “on the side” with a report produced the next day at the earliest.

This technology fundamentally changes the way a retail bank is run. For example, in terms of marketing campaigns, a bank has paid 25% less for a campaign for the same return, or gained 15% more return for the same cost.

“This is really huge. Since we have all those frameworks about how to run a high performing bank it allows us to go one step forward,” Van der Ouderaa said.

Both Ash and Van der Ouderaa drew attention to the part analytics plays in customer segmentation.

Using social media as a backdrop the firms agreed that analytics goes a step further to segment customers. Social networking sites like Facebook and LinkedIn provide a pool of information about people and their values, but Accenture and SAS claim to take this a step further.

“What we start doing is modelling trends, belief systems – not religion or anything – but are they young, urban, ecologically driven, goes to park and eats fairtrade chocolate, versus a bit older, lives in the countryside and drives a Jaguar?” Van der Ouderaa said.

“You can micro-segment much further down and you understand what drives these people and therefore what is important in terms of brands and products.”

Ash added: “What we are seeing a number of our customers doing is getting quite sophisticated in the way they take products to the market and the way they segment.”

He added that the richer the data that is gleaned, the more accurate analysis and therefore the more successful the business outcome for the client.

BofA, the largest US bank by deposits, is cited as a winner after using customer-targeted analytics.

It has been able to segment all the way down to a single person by taking into account a range of complex factors.

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