Innovation of Customer Experience Value - Data Strategy of Shinsei - - PowerPoint PPT Presentation

Innovation of Customer Experience Value

• Data Strategy of Shinsei Bank Group

February, 2018 Hiroyuki Torigoe President & CEO Shinsei Financial Co., Ltd.

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 Lake ALSA will keep pursuing the maximization of customer experiences and

their lifetime value (LTV).

Creation of Customer Experience Value and Growth with Lake ALSA

LTV (Lifetime Value ）

写真を探して張り付ける

Essential Depth of Customer Experience

・Mass Marketing (TV) ・ACM ・Web Advertise- ment ・Convenience Store ATMs ･Introduction of credit scores ・Manual credit ratings ・Calling centers ・E-mails/SMS

Web+Automated Stores (ACM)

Marketing ・１to１Marketing ・Smart-phone transaction ・UX/UI ・ChatBot/API Credit Rating/ Collection ・AI Score ・Digitalization of accumulated human expertise Operation ・IVR ・RPAｘOCRｘAI ・API Operator Support

Utilization of Digital Technology

・TV CM ・ATM

TV CM+Branches with Clerks

・Manual Credit Ratings ・Branches with clerks

YUI Platform

Lake ALSA

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“YUI Platform” to Support Shinsei Bank Group’s Data Strategy



YUI Platform is an analytics platform created by combining an Artificial Intelligence (AI) and the Group-wide Customer Database.



YUI Platform is capable of expecting the needs and credit ratings of each customer through AI, allowing us to keep improving our marketing and credit risk assessment capabilities to a higher level.



The Group aims to continue upgrading the Platform so that we can always fulfill the true needs of the customers, targeting also the customers outside of the Group in the future.

YUI Platform

AI keeps learning though continuous utilization and acquisition of the new data

Individual Credit Rating

AI/Analytics Platform

Marketing Scores Data Inquiries

Corporate Credit Scores

Fraudulent Scores Intricate Credit Ratings Appropriate Product Recommen- dation New Lendings to New Customers Varieties of Transaction Methods

Consumer Finance Customers

Transaction- based Lending

Varieties of Lending Method

Corporate Customers

…

Affiliates with Individual Customers

…

Affiliates with Corporate Customers Group Customer Database （Identification, Anonymization）

Appropriate Product Recommend- ation

Shinsei Bank APLUS Shinsei Financial Showa Leasing Shinsei Bank APLUS

Total: about 10 million customers

A

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Essential deepening

• f customer

experience with digitally savvy customers (UX/UI)

Lake Brand

(I) Sophistication in Digital Marketing

 Shinsei Financial will gradually upgrade the credit rating / digital marketing method with AI learning ability, acquiring the young generation with high digital literacy while retaining current customers of the Lake brand.  Shinsei Financial, simultaneously, will optimize its operational cost with digital technology, namely, using OCR and RPA.

Innovate Business with Digital Technology and Acquire the New Customers

Realize cost

• ptimization by low-

cost operation using digital technology

(II) Sophistication in Credit Rating/Collection

Additional acquisition of potentially qualified customers (Upgraded AI Scores)

Potential Market

B C D

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Branding and Marketing Concept of Lake ALSA

 Shinsei Financial aims to create a brand value which can differentiate itself from competitors, by taking over the sense of safety and convenience of a big brand, Lake, and with advanced technology and customer support.

• Agility

On-time service with high-end AI technology

• Linked

Build a new customer base utilizing the integrated database (YUI Platform)

• Security

Always behind the customers

• According to our vision*

*Build a proud “financial service provider for ordinary citizens,” sincerely engaging with customers and offering values needed by society.

The Value of Lake The New Value to be Created

• Sense of safety

Lake as a big consumer finance brand

• Convenience

No ATM handling charge, and no interest for the first 180 days

Enforcement of Multi-Function to Create the Brand Value

 Card-less withdrawal/repayment service with Seven Bank ATMs.  Better response with Web-API, optimization of web members’ site and forms (AB Test, PDCA cycles)  ChatBot services with Smart phones/tablets  24h wire transferring services (from Fall, 2018）

B

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Upgrading the Credit Rating and Collection Procedures with AI Scorings



Expecting better performance through the application of sophisticated hybrid of AI and logit scores to the various financial products of the Group.



Expecting higher accuracy of prediction by combining the big data and the AI’s deep learning technology.



Expecting better credit scoring performance by utilizing AI analysis of the credit position in fund collection area.

Data

AI Scoring the Group is Working On

Integrate and utilize not only credit and attribute information, but also all structured, non-structured and open data within the Group for scoring

Algorithm

• Maximize the impact of the big

data by hiring the high-end mechanical learning models such as deep learning and ensemble learning

Area of Application

• Utilize AI for the credit ratings

as well as for the fund collection area, upon evaluation of the credit position(as they are two sides of the same coin)

Higher Credit Scoring Performance Lower Credit Scoring Performance “Approve/increase” when AI finds blue-chip customers, regardless of low logit scores “Decline/decrease” when AI finds inappropriate customers, regardless

• f the high logit scores

AI Scoring Traditional Logit Scoring

High Medium Low Low Medium High

Hybrid Credit Ratings Utilizing AI and Logit

C-1

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Digitalization of Human Expertise in Fraudulent Control



Share the expertise of Shinsei Personal Loan’s skilled staffs within the Group by replacing manual credit screening of fraudulent detection with AI.



Digitalization of manual credit screening techniques in collection centers are carried out simultaneously.

Future

Scoring

System System Extraction Tool

Manual Credit Scoring

Operations of Experienced staffs

AI Credit Ratings

System

Contract Decline Application

Current Status

Scoring

System System Manual Operations

Manual Credit Scoring

Operations by Experienced Staffs Decisions of Experienced Staffs

Contract Decline Application

Information Collection/ Checking Tools

Toward the higher accuracy/credit rating support through AI’s learnings of the past manual credit ratings

Extract Applications Subject to Manual Credit Scoring Extract Applications Subject to Manual Credit Scoring

Decisions of Experienced Staffs

C-2

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Phases of Robotization with Robotics Process Automation (RPA)



The Group is promoting its robotization by introducing RPA and OCR technologies mainly in back

• ffice operations in Shinsei Financial



The Group almost completed their preparation processes to implement them in FY2018



We are expecting 50% reduction of workload in the selected 19 operations in FY2018, and will expand its application through modularization going forward.

Phase 2-1 Design Each Operation/ Carry Out Product Selection PoC

Consideration Period October - November 2017

April 2018

Phase 2-2 New Process Introduction

December 2017 – March 2018

Phase 3 Start Utilizing

Specify Tasks for sampling Share Views

Support Detailed Designing of Operations

Project Decision Making Check-point

Details of Tasks

Reflect Characteristics

Starting-up Program of RPA Support Establishment of Rules for Robotics Management Tools Introduction Plan

Trial Calculation

• f

Effectivene ss

Design Each Operation （List of New Operation, New Operation Flow Chart)

RPA PoC Operation Check RPA Product Comparison

Concept

• f New

Process Set Evaluation Axis

OCR PoC

OCR Product Evaluation /Selection

Consideration of Management Policy/ Set Introduction System

Get Estimates and Select Tools

Preparation for Utilizing Phase/Adjustment of OCR

The Operation Starts

D

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Disclaimer

• The preceding description of Shinsei’s Medium-Term Management Plan contains forward-looking

statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and

• assumptions. Should one or more of these risks or uncertainties materialize, or should

underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements.

• Unless otherwise noted, the financial data contained in these materials are presented under

Japanese GAAP . The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis.

• Information concerning financial institutions other than the Company and its subsidiaries are

based on publicly available information.

• These materials do not constitute an invitation or solicitation of an offer to subscribe for or

purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.