 from the Corinium Chief Analytics Officer Conference, Spring, San Francisco. It's theCUBE. Hey, welcome back everybody. Jeff Frick here with theCUBE. We're at downtown San Francisco at the Corinium Chief Analytics Officer Spring Event, about 100 CAOs as opposed to CDOs, talking about big data transformation and analytics and the role of analytics. And a lot of practitioners are really excited to have our next guest. He's up from Mexico City. It's Jose Marillo. He's the Chief Analytics Officer from Benorte. Jose, great to see you. Thank you for having me, Jeff. Absolutely. So for people who aren't familiar with Benorte, give us a quick overview. Benorte is the second largest financial group in Mexico. We, for the last, during the last three years, we were able to leapfrog Citibank and Santander. Congratulations. And as we were talking before, we turned the cameras on you and your projects had a big part of that. So before we get in it, you are a Chief Analytics Officer. How did you come in? What's the reporting structure? How do you work within the broader spectrum of the bank? Well, I moved to Benorte about five years ago from, I was working at the central bank where I spent about 10 years in the MPC, the Monetary Policy Committee. And I was invited by, initially, by the President of the Board. And when a new Chief Operating Officer was named, he invited me to lead a new Analytics Business Unit that he wanted to create. And that's the way that I arrived there. Okay, so you report into the COO? He's the COO slash CFO. Slash CFO. So he's not only a very smart guy, but a very powerful guy within the organization. And does the CIO also report to him? The CIO, the CDO, the CMO report to him. Okay, so you have a CDO as well, Chief Data Officer. I have a CDO who I work very close with him. We could go for a long time. I might not let you leave for lunch. So I'm just curious on the relationship between the CDO and the CAO, the Data Officer and the Analytics Officer, we often hear one or the other, it's very seldom that I've heard both. So how do you guys divide and conquer your responsibilities? How do you parse that out? I guess he provides the foundation that we need to find the analytics projects that are going to transform the financial group. And he has been a very good partner in providing the data that we need. And basically what we do as the CAO, we find those opportunities to improve the efficiency, to bring the customer to the center and be able to deliver value to our stakeholders. Right, so he's really kind of giving you the infrastructure, if you will, of making that data available, getting it to you from all the very sources, et cetera, that then you can use for your analytics magic on top. Exactly. Okay, so that's very good. So when we sat down, you said an exciting report has come out from, I believe it was HBR, about the tremendous ROI that you guys have realized. So you tell the story better than I. What do they find in your recent article? Well, in the recent article from the Harvard Business Review, is how Banorti has made its analytics business unit pay off. And what we have found in the past two and a half years, is we've been able to deliver massive value. And by now we have surpassed a billion dollar seen net income creation from analytics projects made on cost saving strategies and revenue generating projects. So you should pay for yourself just barely. Yeah. I mean, that's great. It's such a great story. Just barely, because it's so important. So as you said, that billion dollars have been realized both in cost savings, but more importantly on incremental revenue. And that's really with the most important thing. Exactly. So how are you measuring that ROI? So basically the way we measure it is on cost saving strategies that are related to risk operational and financial costs. It's the contemporaneous effect. And that can be audited. And on the other side, on revenue generating projects, the way we do it is we estimate the customer lifetime value, which is nothing else than the net present value of the relationship with our customers. So we need to estimate survival rates plus the depth of our relationship with our customers. So I just love, so you do all kinds of projects, you're measuring the value of the projects. What are some of the projects that had a high ROI that you would have never guessed that you guys applied some analytics to and said, wow, terrific value relative to what we expected? Let me tell you about two types of projects. The first project that we started on was on cost of risk cutting strategies. And we delivered massive value and very quickly. So that helped us gain credibility. And the way we did it is like to analyze and the dicing of the data where we had excessive cost of risk. And in the first year, actually that was the first quarter of operations, we yielded about a 25% incremental value to the credit card business. And after that, we started to work with them and started the discovery data process. And from there, we were able to optimize analytically the cross-sell process. And that's a project that has already a three-year maturity. And by this time, we are able to sell without having any bricks or mortars, about 25% of the credit card sold by the financial group. If we were a territory within the financial group, we would be the largest one with a 400 basis points lower on cost of risk, 30% more on activation rates. And it's no surprise that the acquisition cost is 30% less, this would be our most efficient channel. Right. I just want to keep digging down into this, Jose. There's a lot of stuff to go. I mean, you guys have been issuing cards forever. So was it just a better way to score customers? Was it a better way to avoid the big fraud customers? Was it a better way to steal customers maybe from a competitor with a competitive rate that you can afford? I mean, what are some of the factors that allowed you to grow this business in such a big way? I guess it's something that has been improving during the first three years. The first thing that we made like a very simple cascade on seeing why we were not that efficient in our cross-sell process. And we kind of fixed every part of it, like on the income estimation models that we had with the risk department to improve them, up to the information that we had on our customers to contact them. And we partnered with data governance to improve those. And finally on the delivery process and all the engaging process with the customers. And it seemed that we were going to find something that was going to be more costly, but it was something that was, we had the center of the customer so that it was more likely for them to go and pick up the card and we deliver it to their homes. And finally that process was much more efficient and the gains that we had, we shared them with our customers. And after three years, we've done things with artificial intelligence to have much better scripts so that we are better able to serve our customers. We do a lot of experimentations, the experimentation that we didn't do before. And we use some concepts from behavioral economics to try to explain much better the value proposition to our customers. So I just, I love this point is that it was a bunch of small, was optimizing lots of little steps and little pieces of the pie that added up to such a significant thing. It wasn't like this magic AI pixie dust. Initially it was a big bang. And then it has been something incremental that has since it's a project that at the end of the day we own. And it's something that we are tracking. We are willing to put all the effort to have all the incremental efficiency within the process. So people process and technology. We talk about those are the three pieces always to drive organizational change. And usually the technology is the easy part. The hard part is the people in the process. So as you and your team have started to work with the various lines of businesses for all these different pieces, promotional piece, customer retention piece, risk and governance piece, cross-sell piece. How has their attitude towards your group changed over time as you've started to deliver inside and all this incremental deltas into their business? I guess you're hitting on the, just on the spot. The building the models is the easy part. The hard part is to build the consensus around to change a process that has run for 20 years. There's a lot of inertia. And there are a lot of silos within organizations. So initially I guess the credibility that we gained initially helped us move faster. And at the end of the day I think what happens is that we, the way that we are set up is that the incentives are very well aligned within the different units that need to interact in the sense that we are a unit that it's sponsored by the, corporately sponsored. And we make it easier for our partners to attain their goals. So that's, and they don't share the cost of us. And those are the goals they already had. So you're basically helping them achieve their objectives that they already had better and more efficiently. Yeah, and you're pointing out correctly, it's the people. And it's, besides the math, it's a highly, you could say diplomatic or political position in the sense that you need to have all the different partners and stakeholders aligned to change something that has been running for 20 years. Right, and I just love it's a ton of little marginal improvements across a wide variety of touch points. It's so impactful. So Woody, as you look forward now, is there another big bang out there? Or do you just see kind of this constant march of incremental improvement and or are you just going to start getting into more different businesses or kind of different areas in the bank to apply the same process? Where do you go next? Well, we started with the credit card business, but we moved to all the verticals within the financial group, from mortgages, auto loans, payroll loans, to we are working with the insurance company, the long-term savings company. So we've increased the scope of the group and we moved not only from cost to revenue generating projects, and so far it has been on, we've been on an exponential increase of our impact. I guess that's the big question. The first year we were able to do 46 times our cost, the second year we made 106 times our cost, the third year we were close to 200 times our cost with an incremental base, and so far we've been on this increasing slide. At some point it's, I guess we're going to decelerate, but so far we haven't- Right, a lot of big numbers. Hit that point. Eventually you've got to see it. The ground curve will slow down a little bit. All right, well yeah, I'll give you the last word before we sign off here. Kind of tips and tricks that you would share with a peer for sitting around on a Friday afternoon on the back porch, you know, as you've gone through this journey three and a half years and really sold you and your vision into the company. What would you share with a peer that's kind of starting this journey, you're starting to run into some of the early hurdles to get past? Because there are two things that I could share. And once you have built a group like this and you have the already the incentives aligned, and you have support from the top in the sense that they know that there's no other way they want really to compete and be successful. And suppose that you have all these preconditions set up. And suddenly you have a bunch of really smart people that are coming to a company. And so you need to focus on ROI, high ROI projects. It's very easy to get distracted on non-impactful projects. And I guess the most important thing is that you have to learn to say no to a lot of things. Speak of my language, I love it. Learn to say no, it's the most important thing you'll ever learn. All right, well Jose, thanks for spending a few minutes and congratulations on all your success. What a great story. Thank you for having me, Jeff. Absolutely, he's Jose, I'm Jeff. You're watching theCUBE from the Corium Chief Analytics Officer Summit in downtown San Francisco.