Credit card issuer: sales forecasting

We developed a monthly econometric revenue forecasting system for a leading domestic credit card issuer to project revenue lines (finance charge, balance transfer, cash advance, late fee and interchange) as a baseline for targeting and measuring marketing campaign impact. The forecast portfolio was highly segmented across product, spend behavior, credit risk, purchase APR, wallet share, vintage and merchant spend dimensions, and accounted for comparisons across macroeconomic response, behavioral migration and acquisition strategy scenario planning. The revenue forecasts yielded by this system were considerably more targeted for delivering management insight than the de facto system, and after only 3 months of implementation, the system was matching the de facto aggregate forecasts in terms of forecast accuracy.

 

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