Using analytics to create more than $1 billion of value in three years is no mean feat. In this interview Jose Antonio Murillo Garza, Chief Analytics Officer at Mexico’s second largest financial group Banorte, and a speaker at next month’s Chief Analytics Officer, Fall event, tells us how he did it and the role of AI.
He also smashes a common myth about the CAO position, reveals the top five traits a successful CAO requires and explains why he’d choose Tom Cruise for the lead role in a film of his life.
Can you explain a little more about your role and how you spearhead the importance of data within Banorte?
“As Banorte’s Chief Analytics Officer my main objective is to increase the customer life time value (CLV) of our customers, i.e. to deepen and extend the business relationship with our customers. This goal is attained by developing a more profound knowledge of our customers. The c-suite understood from the very beginning that Banorte had to transform into a data enhanced organization when we started our analytics journey. The whole company quickly adopted analytics when it started to reap its benefits –the business lines found that they could exceed their targets if their intuition was boosted with data.”
Your responsibility for drilling down into the data of your customers to find new opportunities has seen huge success with the value created by the analytics team equating to a fifth of total net profits within two years. Were you surprised at how quickly that value added up?
“The analytics transformation that Banorte has gone through has been quite rapid. The pace of the transformation accelerated at its inception when the analytics business unit merged the CRM: ideas could be implemented very quickly and an experimentation culture was established. The value created with analytics projects has certainly exceeded any forecast!”
So how much value has analytics created to date?
“The value created by analytics projects at Banorte during its first three years of operations exceeds one billion dollars. Analytics cost cutting projects (risks, operational and financial) are measured by the contemporaneous effects while income generating projects are measured with their impact on the CLV.”
That’s a staggering figure! How did you manage to unlock so much value so quickly and what are the best examples of specific opportunities that unlocking data and using greater insight into the business has enabled?
“We undertake projects based on their ROI potential. Initially we focused on cost-cutting risk strategies and during our first year of operations cost-cutting projects accounted for almost 40% of the value we created. Nowadays cost-cutting projects produce about 15% of the value that the analytics business unit creates. The nice thing about cost-cutting projects is that their impact is directly measured and may be easily audited so they can help in building credibility. As we started having early hits the adoption of analytics quickly spread through all business lines.”
The value you have created is certainly enough to make people sit up and take notice but do you think businesses are placing enough focus on data and analytics and if not what do they need to make it a higher priority?
“At this stage within Banorte most of the business lines are focusing on data and analytics. The incentives are well aligned to have that outcome since analytics is centrally sponsored –it does not add to their costs and make it easier to attain their goals.”
What are the biggest challenges you face as a CAO?
“Improving the communication with our customers so that when we speak with them we can have fruitful conversations. Among the challenges is to approach the customers with relevant value propositions and address adequately their concerns. I think that when we get it right we will unlock the potential to widen and deepen our business relationship with the customers. This is a high dimensionality problem in which artificial intelligence is helping us in cracking the problem.”
What are the biggest opportunities?
The biggest opportunity is to serve our customers where they want, where they want, making them offers which recognize their current and potential value. This requires us to develop a deep knowledge of them.
What are the most common myths about the CAO role and how do you break down such preconceptions?
“Some people might think that CAOs are too academic and do not understand the business. The best way to rule out this preconception is by creating value and helping the business lines to outpace their competitors.”
How should businesses drive a passion for data and analytics at a wider level so that its importance is recognized at all levels of a business and not just by those with data and analytics responsibilities?
“Adoption of analytics is directly linked with the potential of value creation. It is not only about being “smarter” but about being “rich” –a trait specially valued by our stakeholders (customers, stockholders and employees).”
Your panel discussion at Chief Analytics Officer, Fall next month focuses on the proliferation of the CDO and CAO roles and whether they will converge or diverge. How would you define each and what’s your view of the future?
“The CDO and CAO roles are interdependent. A CAO which lacks data is doomed to fail and a CDO without execution has not a reason to exist. In the case of Banorte we work closely together but we have independence. This model has proven to be very successful for us, but I am aware that there are different structures that might work. At the end of the day there has to be a trusting relationship between both roles.”
What are the most important characteristics of an effective, successful CAO?
“I think successful CAOs have at least five traits:
1) Quantitatively deft
2) Business knowledge
3) Good communicators
4) The ability to build consensus
5) Entrepreneurial instincts to challenge inertial processes and tear down silos”
How would you analyze yourself and what’s the most surprising fact that people might not know about you?
“I think the most surprising fact people do not know about me is that I am very shy. Perhaps my best quality is the ability to team up with smarter people than me!”
If you didn’t work in data and analytics what would you be doing?
“During college I worked as a realtor and I enjoyed it a lot. I think sales is where a lot of the action happens for any firm.”
What are you currently watching on Netflix?
“Black Mirror. Great series with a relevant message for the data and analytics industry.”
If there was a film about your life who would play you and why?
“To play me you would need a really handsome and charismatic guy –such as Tom Cruise- for the audience not to get bored with and leave the theatre before the end!”
Jose Antonio Murillo Garza will be a guest speaker at Chief Analytics Officer, Fall which takes place in Boston from 8-11 October. He will be part of a panel discussion at 10.30am on October 9th which aims to analyze the current and future role of the Chief Analytics Officer and Chief Data Officer roles.
Author: Liz Morrell