Blog · Data quality and reconciliation · Financial services
How a financial services firm handles customers that cross a segment boundary during the year: what the norm was, what it becomes, why product fit and cross-sell measures jump at the boundary, and the reporting rule that shows the movement instead of hiding it as a gap that appeared from nowhere.
A relationship manager's gap list gains a new line in January: a customer whose product fit was fine in December is now four products short of norm. Nothing at the customer changed. Its balances grew past a boundary, it moved from the mid segment to the upper one, and the upper segment's norm is four products higher. This guide sets out how to report segment migration so the finding is the movement, not a phantom gap.
| Segment | Band on balances | Norm: products held |
|---|---|---|
| Lower | under $1m | 2.1 |
| Mid | $1m to $10m | 3.4 |
| Upper | $10m to $50m | 5.8 |
| Institutional | over $50m | 7.2 |
A customer at $9.8m has a norm of 3.4. At $10.2m it has a norm of 5.8. Its holdings did not change.
Record the segment per customer per period. Reassign on a fixed cadence from the period-end measure. When a customer's segment changes, put it on the migration list with:
old segment, old norm, new segment, new norm, products held, gap under each
The gap list shows the gap under the new norm, with a marker that the customer migrated this period.
Customer identifiers only.
| Customer | Old segment | Old norm | New segment | New norm | Held | Gap before | Gap after |
|---|---|---|---|---|---|---|---|
| 4471 | Mid | 3.4 | Upper | 5.8 | 4 | 0 | 1.8 |
| 2210 | Upper | 5.8 | Mid | 3.4 | 5 | 0.8 | 0 |
| 9034 | Lower | 2.1 | Mid | 3.4 | 2 | 0.1 | 1.4 |
Customer 4471 grew and is now under-served for its new size. That is a real opportunity, and the list says why it appeared. Customer 2210 shrank, and a gap that was being worked has closed for a reason the relationship manager should know about, because a shrinking customer is its own finding.
Customers within ten percent of a boundary are shown with both norms and a gap range. Customer 4471 at $10.2m is shown as gap 0 to 1.8, and the relationship manager decides whether to treat it as upper yet. The margin is stated on the report.
Segment reassigned silently. The gap list moves and nobody knows why. The migration list is the fix.
Monthly reassignment on volatile balances. Customers cross and recross. Fix the cadence.
Norm recomputed after migrations. The upper segment's norm falls when a batch of mid customers join it. Compute norms from the segment membership as it stood at the start of the period, then reassign, then report.
Shrinking customers ignored. A gap that closed because the customer got smaller is a retention signal, not a success.
Mapped once, the customer master and the holdings produce the segments, the norms, the migration list and the gap list every quarter, with the boundary customers ranged. Covirage builds this from the exports as they are. The financial services page describes the setup, and the one customer view guide covers the holdings roll-up the norms come from.
On a fixed cadence, quarterly or annually, from the measure as it stood at the end of the period. Reassigning monthly on a volatile measure makes customers oscillate across the boundary and the gap list churn.
The new one, because that is the segment the customer is now in. But the migration list shows both, so the relationship manager sees that the gap grew because the norm rose, not because the customer dropped a product.
Flag them. A customer within a stated margin of the boundary is shown with both norms, and the gap is reported as a range. That stops a small movement in balances from producing a large movement in the gap.