At many corporate banks, sophisticated capabilities such as risk alerts and trackers might be mere fantasy. Finally, banks must put the right performance incentives in place to underscore the importance of retention management and reward RMs for success in mitigating attrition.
See Exhibit 1. For instance, small businesses that have relatively simple banking arrangements account for the greater share of total exits, while large-cap clients, with more complex banking needs, are more likely to signal their discontent by reducing the volume of business conducted.
For example, classification and regression tree analysis, random forest modeling, and neural networks can be used to tease out subtle signals and patterns. An analytics team of data scientists and business analysts should test different predictive algorithms, working first with a control group to get a more detailed baseline on how clients respond to known attrition triggers.
Back in the Good Old Days, a consumer looked to one banking provider for their checking account, savings account, home mortgage, and maybe an auto loan. A higher attrition rate causes panic among employers and the direct impact of a higher attrition rate comes in hiring costs," Kumar added.