A comparison of the single-product offering approach to the multi-product approach. An application in retail banking.

Abstract

The main objective of this doctoral thesis was to present a new approach to provide customers with a retail bank product offer. The solution developed is the opposite of what has been used in the financial institution so far. To be more precise, the solution is to change the current singleproduct offering to MPO approach, which in practice means that a bank customer does not receive the letter with a single-product offer with the highest probability to buy (very often the same product every several months), but receives offer consists of those bank products, for which customer probability to buy score is the highest. The estimated scores are determined by the propensity-to-buy econometric models created for all bank products.