Customer Segmentation, Valuations, and Credit Policy

Financial Services, Marketing, Risk Management

We developed application level credit card LTV model for a leading bank and used LTV model to overhaul decision & line policy and evaluate new products


  • Client was a large global bank w/ ~6 Million card customers
  • Indus was tasked with overhauling valuations of the credit card business
  • We developed comprehensive application-level valuation model that predicted revenue & cost drivers at a granular level
  • Behavior-based customer segments were identified for each profit driver; Key month-over-month assumptions were developed for each driver


Profitability Drivers of LTV Model & Calculations


Monthly Loss Rate by Product (#CO/#Open)


Credit Line Utilization by Risk (Product A)


Profitability per Account by Product



  • Identified 2 new segmentation dimensions with differentiated usage patternsLaunched outbound phone sales campaign on target population.
  • Optimized approve/decline policy to increase profitability by ~10% while reducing exposure
  • Currently using the model to optimize initial limit assignment
  • Model being used to evaluate new product decisions & perform macroeconomic scenario gaming