CRF Segmentation

Credit card centers underwrite and process thousands of applications every day. The applications are from various channels: branches, departmental cross-selling, internet marketing, outsourcing agents, co-branding channels etc. These applicants are all in different life cycle stages and exhibit different consumption, lifestyle and payment behavior. If one can apply data mining to segment applicants from different channels after pre-screening, then we can tailor individual underwriting strategies to different customer types. This process greatly improves upon the current manual-based underwriting decisioning process still practiced by most Mainland Chinese banks.
The same is also true for portfolio management. Portfolio management is a great way to identify risky accounts, active accounts and potentially profitable accounts so that different strategies, treatments, and cross selling possibilities can be developed and applied to differing customer segments.

CRF segmentation is then developed based on the above requirements. The customer segmentations are multi-dimensional to cover social, financial, and behavioral characteristics. Through advanced data processing and statistical technologies, CRF segmentation can classify millions of customers in a credit reporting database into the following segments:

·Luxury customers
·New consumer finance customers
·Generation X
·Stable revolving customers
·Debtors who do not carefully manage/understand credit
·Most risky

There are additional sub-categories for each core segment for commercial banks to assign credit strategies based on their own business requirements.