FIRST UNION DEVELOPS INDUSTRY'S LARGEST DATA WAREHOUSE; DATA MART TO TAILOR MARKETING TO 16 MILLION CUSTOMERS

First Union Corporation announced plans recently to triple the capacity of its customer data warehouse to 27 terabytes, a banking industry record, in its quest to deliver customized marketing to its 16 million customers.

Upgrading the massive system, one of the largest commercial installations of an IBM supercomputer of its type in the world, will enable the company to add customer information from its 1998 acquisitions and expand the warehouse to include small business and commercial customers. The amount of disk storage in the data warehouse will be equal to 27 million floppy disks.

The data warehouse, an IBM RS/6000 SP running on Informix Corporation's relational database, stores up to 24 months of customer transactions with First Union. Analyzing customers' behavior, such as how often they contact the company in person, by phone or ATM, enables First Union to better understand each customer's needs and tailor its marketing strategies. Using software from SAS Institute Inc., First Union's business analysts perform high-end data mining, modeling and other analyses.

Expansion of the warehouse comes just as First Union is deploying its new data mart, Sigma, throughout the corporation. Sigma gathers customer data from the warehouse to reveal trends. Using MicroStrategy's DSS Web, executives and sales managers can package the data for simpler, faster reporting and analysis, enabling them to focus on the best long-term interest of the customer rather than individual product lines.

"This is the technological engine behind First Union's 'Customers for Life' strategy that allows us to anticipate and meet the individual needs of every customer," said John Georgius, First Union president and chief operating officer.

"We now have at our fingertips technology that enables us to truly know our customers and anticipate their needs," he added. "This knowledge allows us to deliver exactly the kinds of products and services that customers need, based on their patterns of interactions with us."

"With the RS/6000 SP, First Union has one of world's most powerful computers, which provides the enormous computing power required to maintain its 27 terabyte data warehouse," said Rodney Adkins, general manager of IBM RS/6000. "This is a prime example of how the computational scientific technology behind Deep Blue translates into direct business value and the ability to offer customers better products and services."

Sigma allows authorized users to analyze critical customer information and create detailed product and marketing reports in a matter of seconds. Managers can generate customized reports to study market trends using the latest customer information.

"Sigma is lightning fast, delivering information in seconds that formerly took days or weeks to obtain, or wasn't available at all," said Naras Eechambadi, First Union senior vice president of Enterprise Information Management. "It will give First Union a significant competitive advantage to anticipate and respond immediately to market trends."

Customer data in the warehouse is updated monthly. Driven by an Informix Dynamic Server, the warehouse gathers data from customer information legacy systems within First Union. Data from the warehouse is fed into Sigma, which users can access using a flexible, easy-to-understand point and click interface on First Union's Intranet. Thousands of reports can be customized by users at the corporate level or by state, city, or branch, by customer segment, or product.

Sigma also serves as the company's Customer Relationship Management system for marketing analysts using Prime Response's Prime Vantage software. For example, the system can recommend the "next best product" for a customer. By looking at a customer's stage in life, whether that person is buying a home, raising a family or approaching retirement, First Union can anticipate that customer's next likely financial need. This information is then sent to customer sales and service representatives for follow-up with customers and is used to help coordinate customized marketing efforts.

The system enables First Union to do more targeted marketing, thereby improving the response rate to direct mail, and reducing the amount of unwanted mail that hits customers' mailboxes.

First Union is also customizing its service to small business customers. By studying the trends of small business customers' interactions with the company, First Union can determine which delivery channels are most popular (such as telephone service or certain financial centers) and enhance small business services in those channels. The company can also determine which delivery channel is used most frequently by each small business customer and then assign First Union consultants to work with those customers.

Using its new technology, First Union is also introducing a new program to identify its most valuable individual and small business customers. Employees are given strategies to retain those customers and deepen First Union's relationship with them. Customer relationship managers make personal calls to make sure these customers are satisfied and ask what else First Union can do for them. These customers come from all life-style and economic segments. Forty percent of them use three or more First Union products or services.

First Union Corporation is a leading financial services company with assets of $237 billion. Ranked as the nation's sixth largest bank and eighth largest brokerage, it serves 16 million customers, who can access account information and purchase financial products at 2,400 financial centers, at 3,500 automated teller machines, through the Internet at http://www.firstunion.com or by calling First Union Direct at 1-800-ASK-FUNB.