APRIL 4, 2020

MANAGEMENT INFORMATION SYSTEMS

CASE STUDY

FIDAN SULEYMANLI
UNIBANK
Company Information

Unibank started its activity in Azerbaijan in 2002 by combination of MBANK (1992) and
PROMTEXBANK(1994). It is known as one of the largest private banks of Azerbaijan. The
company has several goals which trigger it to improve day-by-day. The first and the most
important goal of Unibank is becoming the “Best Digital/Innovative Bank” in the marketplace.
Unibank always puts its customers in the first place and provides them with bunch of services like
cash, micro, and mortgage loans, international and local money transferring, digital banking
services, and etc.

Main revenue channels

As in usual banking system, Unibank’s main revenue channels are interest on loans and
investments, fees that bank charge its customers for several actions, forex exchange (foreign
exchange, acting as a broker), commission, and effective data analytics. By effective data analysis,
the bank is able to evaluate data of customers very well and find their needs and wants. After that
analysis, bank become eligible to address new services based on customers need.

Products/Services of Unibank

- Cards: debit, credit, Albali gift, digital card.

- Loans: cash loans, micro loans, mortgage loans.
- Savings: term, accumulation, progressive, interest forward.
- Money transfers: local, international.
- Digital banking: Unibank mobile, Internet banking, Albali personal cabinet, Unimiles
personal cabinet, online loan payment, online loan application, Albali Plus mobile app.
- Other services: private banking, cash and settlement services, deposit cells, POS terminals,
E-commerce.

The Strategic Goals of the Bank:

- To become “Best Digital/Innovative Bank” in the Market

- To increase Customer Satisfaction
- To get new market positions (retail and business) and increase market share
- To develop retail and SME business loan portfolio
 - Strong NPL recovery
- To build strong and effective Business Process Management
- To strengthen risk management framework on each level
- To accentuate and develop human capital and corporate development
-

Market share of Unibank

From the data shared by Azerbaijan Banks Association, we may calculate the approximate market
share of Unibank, and it turns our 3% among 10 top banks.

Organizational Structure

Taken from the official page of Unibank

List of Business Processes

- Cash, Micro, and Mortgage loaning

- Programming and Development
- Internal Auditing
- Customer accounting
- Financial accounting
- Interest processing
- Private Banking
- Charges processing
- Clearing/deferment
- Account opening /closing
- Customer Relationship
- Group Accounts
- Statement processing
- Customer data
- Limits processing
- Loan repayments
- Auto transfers/sweep accounts
- Reports production
- Strategic Marketing and Innovations
- Infrastructure and Technical Support

Main Challenges/Problems of the Company

Collecting and analyzing data

As all financial institutions, banks have very comprehensive data collection. To analyze and extract
all detailed information from this comprehensive system is not easy. To meets customers’ needs
the bank had not any tool to analyze the data of the customers deeply and find out what the
customer really needs. It means that the bank had not any data mining system that generated that
kind of benefits to the company. Lack of this kind of system may seem as a non-problematic issue,
but it actually makes the company lose lots of opportunities. The main impact of it is problem in
fast improvement of the company and unsuccess in finding and meeting customer needs.
Security of Data

Financial institutions’ hugest problem is security of data. As they keep very important and valuable
data for cybercriminals, they are main target of attacks. The cost of this security threat can result
enormous amount for the company- the average cost of data breach is $3.86 million (according to
2018 Cost of Data Breach Study: Global Overview). Also, considering lost reputation and
customer trust, we can say that insecure data may create unrecovered damage for the institution.
Detecting data breaches is very hard. It can take up to 200 days. As we know, time is money-
spending that much time for detecting data breaches makes the bank worse off. Unibank has an
asset of more than AZN 3 billion. Using Payment Card Industry Data Security Standard (PCI DSS)
was not enough for that kind of bank to protect all its information from attacks. This system was
not fast enough in detecting threats and controlling internal suspicious actions (controlling who
wants to reach which data). Also, data security personnel were not so skilled; tricking them with
false offences were easy- as a result of attention on false offence, they missed real fraud and
offence actions. As mentioned before, insecure data affects the reputation of the bank. For the
customers, security is the most important factor while choosing their bank.

Solutions of the Challenges/Problems

Collecting and analyzing data- Strategy Manager

The company’s solution for this problem is obtaining a system which built on data mining. In
2008, the Strategy Manager consumer loan application scoring system which created by the UK
company Experian-Scorex has been launched by Unibank. By this, the company very important
step in implementing business intelligence. The application makes several crucial processes:
analyzing consumers’ creditworthiness in a short period of time, process the needed credit
requirements by itself, and do all processes up to the preparation of credit agreement. Besides that,
the system analyzes customer’s data and offer him/her alterative options.

“The scoring system applied in Unibank combines analytical forecasting, decision-making

mechanisms and the methods of optimizing the strategy of the Bank. These advantages provide
efficient systematization of the data and prompt reactions to the borrower’s inquiries,’ says
Heydar Mirzoyev, the Retail Banking Manager.” (The Financial)

Becoming official partner of Experian-Scorex, first and only partner, has brought huge advantages
to Unibank. Systemization of data make it easy for the company to find needed data quickly. The
application has increased the eligibility of costumer information for 36%. Thus, customer
satisfaction has increased. Time that to search and analyze data has decreased by 51%- and one
more time to remember, time is money. The application decreased need for number of data
analysts. Average salary of data analyst salary is ranged between AZN 1009-9500. This means
that reduction of 5 people resulted AZN 60,540-570,000 save yearly.

Effect of Strategy Manager in Unibank

12

10

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Time spentto collect data Customer satisfaction

Security of Data- ScienceSoft

Unibank always makes differences among its competitors. For achieving data security, Unibank
launched IBM Business Partner ScienceSoft to implement IBM® QRadar® SIEM software in
2018. As we discussed, PCI DSS was not enough to protect the data of company as Unibank.
Therefore, Unibank required a system from IBM which would be compliant both PCI DSS and
QRadar. The software provides Unibank with log monitoring and quick detection of real threats
by built-in analytics and custom correlation rules to detect threats, enabling the bank to spot
anomalies, collect specific audit events, and generate targeted reports for compliance mandates.
IBM started to prepare the project that Unibank needed by learning its needs- all the challenges
mentioned in problems part about data security were taken into consideration. Then, various log
sources and bank’s network assets were connected to the system- including firewalls, an intrusion
detection system (IDS) and an intrusion prevention system (IPS), and a central authentication
system. The third step is very important for achieving internal security. The application has user
role security profiles and network hierarchy system. These prevents outside accesses to the data
that should be reached only certain people. Fourth step of developing the application contains
warning the company about that kind of initiatives as these kinds of initiatives are very suspicious.
Last step of the project is training program for bank’s security team in order to use the software
sufficiently and to get the concept. As a result of ScienceSoft, now, Unibank is able to detect
threats much faster. It is also better tool for preventing inside threats. This system has increased
satisfaction of shareholders and managers of the company.

Health Check Framework (HCF) for IBM Security QRadar SIEM

“Unibank can detect threats at least 15 times faster now — an efficiency gain of 1,500 percent.
During the fine-tuning phase, ScienceSoft reduced the number of unrecognized and unknown
events from 50 million per week to zero.” (Alex Nivin, Security Solutions Leader, IBM Business
Partner ScienceSoft)

By detecting operational deviations and improving SIEM performance and maintenance, the tool
helps to save time and money. Security administrators time spent on investigating fraud and cyber
attacks has decreased by 30% as a result of improved system performance. Also, by using this
software, Unibank avoid the cost of data breach, $3.86 million, mentioned before.
 Speed of detecting threats
50
45
40
35
30
25
20
15
10
5
0
2015 2016 2017 2018 2019 2020

Speed of detecting threats

Conclusion

From the paper, we understand that banks may have huge problems with analysis of data and data
security. Especially, data security is a red line for these companies. Without implementing strong
business intelligence tools, it is impossible to protect the most valuable asset of companies- data.
Unibank is far-seeing and attentive at this point. After 6 years of its operation, the bank took huge
step by launching Strategy Manager application scoring system. Unibank is the first company in
Azerbaijan owning its own scoring system. Also, bringing QRadar to its security system, Unibank
has proved that it has huge advantages over its competitors. These implementations save millions
for the company. I cannot show exact number saved by implementing these systems, but as
discussed previously, it has increased customer satisfaction, decreased time spent on analyzing
data and detecting offences and fraud, decreasing money that spent because of extra time, and
increased reputation.
 References

1. https://www.ibm.com/case-studies/unibank
2. https://www.ihu.edu.gr/tjortjis/Use%20of%20Data%20Mining%20in%20Banking.pdf
3. https://www.finchannel.com/~finchannel/business/banksandservices/20472-
4. https://www.glassdoor.com/Salaries/data-analyst-salary-SRCH_KO0,12.htm
5. https://apa.az/en/finance-news/-133083
6. https://howbankswork.com/core-banking-processes-and-recent-strategies/
7. https://bakuresearchinstitute.org/azerbaijani-2018-ci-ild%C9%99-az%C9%99rbaycanin-bank-
sektoru/
8. https://www-356.ibm.com/partnerworld/gsd/showimage.do?id=41263