Leverage Data, Modelling and Behavioural Attributes to Optimize Lending and Deposits

Nomis Solutions today announced that Damian Young, the managing director of Nomis Solutions Australia would be presenting at the ARCA National Conference 2016. The conference, organized by the Australian Retail Credit Association will be held from the 9th to the 11th of November at the Hilton Hotel in Adelaide, Australia.

Young’s presentation titled, “Optimizing Lending and Deposits Portfolios based on Customer Behaviours, Basel III and Profitability,” will begin at 9:00 a.m. on Friday, 11th of November 2016.

Tighter restrictions on investor property lending and foreign investment levels in Australia and New Zealand have introduced new challenges to the home lending market. Home loan pricing is also under pressure as borrowers become more aggressive in scouring the market in search of better deals.d

“In addition to the threat of cutthroat pricing, retention of existing home loan customers is also becoming difficult,” said Young. “There is a ‘leaky bucket’ syndrome at play here where banks’ lending activity is only just barely enough to maintain the status quo as existing customers leave for better deals.”

Since the adoption of Basel III liquidity measures, Australian and New Zealand banks have been focused on growing core deposits to support the funding mix and provide a more stable basis for lending. To compete for deposits, banks are maintaining high-interest rate offers despite the lowering of the Official Cash Rate, putting pressure on banks’ margins and profitability.

“Another challenge for Australian banks is changing customer behaviors, attitudes, and preferences,” said Young. “People want a personal relationship with their bankers. They also want the best deals, convenience, and speed.”

Responding to these multiple challenges without sacrificing bank profitability, shareholder returns, and asset growth is a major hurdle for banks.

“Without a scientific approach to this conundrum, there is a danger that the market will ‘overprice’ deposits and ‘under price’ loans,” said Young. “Solely reacting to the market without an integrated approach to deliver more effective offers and pricing will potentially cause the same P&L issues we have seen in Europe and North America.”

The presentation will share case studies on the use of consumer behavioral information, data analytics, advanced modeling, and portfolio technology to optimize retention and acquisition without eroding profitability and growth. 

About the ARCA National Conference 2016

The ARCA National Conference 2016 will be held from the 9th-11th November at the Hilton Hotel in Adelaide. It will commence on the evening of the 9th November with a cocktail function and formal proceedings will conclude on the 11th November. The theme of the conference is “Optimising outcomes in an uncertain world,” building on the theme from last years’ conference, which was “Harnessing disruption and innovation.” Now in its fourth year, the ARCA National Conference has become the premier educational and networking event for the Australian and New Zealand retail credit industry, attracting over 350 delegates and 11 sponsors in 2015.