Using artificial intelligence to better engage with customers

Daiwa Securities uses analytics and machine learning from SAS to better meet customer needs

As a comprehensive securities company, Daiwa Securities provides meticulous customer support through its branches, contact center and sales representatives. With the slogan “Passion for the Best,” the leading financial services provider aims to distinguish itself by putting customers first. And analytics is helping Daiwa Securities uncover more opportunities to enhance its customer relationships.

To strengthen its proposals, Daiwa Securities wanted to better understand its customers. The company sought an environment that would facilitate advanced customer analysis. It also established an Artificial Intelligence (AI) Office in its Sales Planning Department.

“Previously, we had conducted analysis with tools like Microsoft Access, but they had limitations in terms of processing time and file size,” explains Osamu Hasegawa, Director of the AI Office. “We installed statistical analysis tools to analyze our customer data, but the tools were not readily adopted due to poor usability.”

Executives at Daiwa Securities knew it was time to re-evaluate their approach, and find a better way to connect with customers and grow their business.

User-friendly analytics

After evaluating several vendors, Daiwa Securities chose SAS. “We have a high opinion of SAS for its advanced analytics and machine learning capabilities,” Hasegawa says.

“SAS has a rich track record with financial institutions, including domestic and foreign banking and securities,” adds Takashi Ohori, Assistant Director of the AI Office. “SAS also provides highly specialized consulting services and was a reliable partner for us when we were starting from square one.”

Soon after Daiwa Securities licensed SAS^® Analytics, its AI Office began collaborating with SAS consultants and the Daiwa Institute of Research.

“Members of the AI Office come from different backgrounds and areas of expertise,” Hasegawa explains. “I have experience leading the planning sector and overseeing the launch of new projects. Ohori has experience as an IT specialist, and the other members have held positions in a variety of departments. Diversity is one of our strengths, and our different perspectives help us better evaluate the data from multiple angles.”

Impressive results and ROI

In parallel with data management, Daiwa Securities created a recommendation support system for sales representatives using SAS AI technology, which analyzes and predicts changes for each customer. Based on the results, it recommends the most suitable product offers for each customer or customer follow-up messages to engage and reduce churn.

For example, a sales representative’s CRM system screen displays lists and details pertaining to customers who require support now, such as customers who have had significant price fluctuations in their products, or customers who are approaching the time for initial mailing of investment reports. And when a customer calls Daiwa Securities or visits a branch, the system also displays a list of relevant products and information that the sales representative can propose.

“Some customers don’t read the investment reports mailed to them,” Hasegawa says. “But when we give them appropriate advice before sending the investment reports, their level of satisfaction improves greatly. It allows us to support their decisions more effectively, like whether they should continue holding or replace a product with a new purchase.”

Since Daiwa Securities began using this CRM system, the customer purchase rate increased 2.7 times, and the customer departure rate decreased by half. The level of satisfaction among sales representatives is also at an all-time high.

“Our sales representatives use the product recommendations as a starting point to connect with customers, to better understand their circumstances and appropriately meet their needs,” Hasegawa says. “We pay close attention to the expression and wording of the advice, and to the granularity of the products we recommend. We also trust the judgment of our sales representatives. When meeting with a customer and discussing their particular circumstances, our sales representatives have the freedom to recommend a product based on their interaction with the customer, rather than solely rely on the specific products listed on the screen.”

“By incorporating sales representatives’ feedback from this CRM project, we are moving forward by being mindful of the balance between results of AI analysis and on-site expertise,” adds Tatsuhiko Harada, Assistant Director of the Daiwa Institute of Research Frontier Technology Department.

Aiming for practical application of AI

When SAS Analytics was originally introduced, it was used exclusively by the AI Office. Less than two years later, SAS has expanded across multiple departments at Daiwa Securities, and future expansion plans are in the works. Now SAS influences nearly all financial product offers, helping the company pinpoint products to suggest in accordance with a customer’s preferences and financial records.

Furthermore, the need for data science and the necessity for practical application of technology are at an all-time high. “We are currently focusing on support within the group, but we plan to provide services proactively beyond the group in the future,” says Tsuguto Morioka, Senior Acting Manager of the Daiwa Institute of Research Frontier Technology Department.

With analytics, Daiwa Securities is well-positioned to serve its customers and maintain their loyalty. “We want our customers to have peace of mind that they can access us, and we’ll be there for them,” Hasegawa says. “There is always ‘a person on the other side,’ whether in a Daiwa branch or on the phone. Understanding the customer and streamlining their experience with the use of technology, including AI, is essential to our commitment.”