The profitability of one

Article Abstract:

Data mining for targeted marketing requires considerable resources and effort as a data warehouse must be developed and built up. Although the concept of database marketing is potentially lucrative, its concrete applications have proven to be disappointing for a number of banks. Three guiding principles are believed to be key to effective data mining in banking yet can be applied to other businesses. First, profitability information must identify the individual clients who create or destroy value with their behavior and determine the reasons for this. Secondly, customer profitability must be calculated by matching expenses and revenues account by account, with no line-of-business bias. Thirdly, profitability information must be in line with organizational profitability but need not exactly balance with it, from an accounting point of view.

Marketing Management, Market Targeting & Approach, Methods, Marketing, Target marketing, Market strategy, Database marketing

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Defending the Fed's presence in retail check processing

Article Abstract:

The criticisms of professors George J. Benston and David B. Humphrey against the involvement of the Federal Reserve System in retail check processing do not adequately support their proposal for the privatization of such operations. In their article 'The Case for Downsizing the Fed' in the Jan/Feb 1997 issue of Banking Strategies, they argued that the Fed payments processing system has outlived its usefulness, that the Fed has been lagging behind in technological innovation and that privatizing the retail check processing operations would allow the Fed to focus on its 'most vital public functions.' However, these arguments are poorly supported. In addition, the authors failed to acknowledge that the agency's involvement in retail check processing plays a vital role in strengthening the US banking system.

Checking & Savings Services, United States. Federal Reserve Board, Production processes, Powers and duties, Letter to the Editor, Checks, Check collection systems

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Digitizing the document

Article Abstract:

Electronic document management systems (EDMS) offer several benefits to banking institutions. EDMS, for instance, allowed Comerica Bank to do away with costly proof-of-deposit operations and check processing functions. Another bank was able to reduce its loan processing cycle time by about 60%. However, experts caution that the migration to EDMS can be a difficult process. User workstations can cost between $5,000 to $8,000 each. A lack of planning and project management can also lead to system failures and soaring project costs. Nonetheless, a number of steps can be taken to ensure a smooth EDMS implementation. These include careful planning, conducting an internal needs assessment to ensure that a system will respond to user needs and providing user training.

Technology application, Document management systems, Bank automation

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