Use Cases for Text Analytics in Finance and Insurance

Amenity Analytics offers an innovative approach to text analytics, combining machine learning with NLP and other forms of artificial intelligence. Our technology is guided by industry experts, with the idea of solving actual business problems.

Finance
ESG

Monitoring ESG Trends & Performance with NLP News Analytics

Systematically evaluate and quantify the materiality of ESG in the news on companies in your investment universe.

Challenge:

The corporate Environmental, Social, and Governance (ESG) team within a large banking client was tasked with creating a workflow to monitor ESG developments across the financial services industry and quantify their performance against their peers.

Solution:

Amenity's ESG model was configured to surface all ESG stories impacting banks worldwide, generating data-driven insight on emerging ESG topics and the client’s performance across each event type.

Amenity’s NLP can be applied to a global news feed in addition to earnings calls and 10K filings from financial services companies to enable data driven insight that answers questions such as: What news events are most impacting public sentiment around the banking industry? What business factors are driving sentiment in banks’ latest earnings call? What topics are my competitors focusing on in their communications?

Outcome:
  • Unbiased and transparent data with contextual analysis and language pattern applications that captured and analyzed all critical events across a rich dataset of thousands of news sources
  • Accuracy and scalability, with the ability to analyze and monitor developments related to ESG themes across watchlists, portfolios, and individual equities.
Earnings Sentiment

Equity Screening on Key Drivers

Factor-based equity screening systematically identifies key fundamental factors.

Challenge:

In Q2 2020, an Amenity client hypothesized that margin and market position would be the key drivers for success in the IT sector, and needed a way to systematically identify companies positively discussing these topics on their latest earnings call.

Solution:

Executing on that hypothesis in the Amenity platform, a screen was created for IT companies most positively discussing those margin and market position during their Q2 2020 earnings call, identifying 15 standouts on which to begin their analysis.

Research teams, portfolio managers and analysts use Amenity to screen for equities based on earnings commentary around key factors including Margin, Capex, Guidance, Market Position, M&A, and Headwinds/Tailwinds. The end result is an efficient, scalable way to monitor exposures, generate ideas, and quickly validate investment theses.

Outcome:
  • Increased returns with informed investment decisions that reflect the fundamentals of a business
  • Position to manage risks and exposures in equities
  • Gained analytical Insights from anomalies based on fundamental company drivers that were undiscoverable elsewhere
VoC

Insurance Company Voice of the Customer

Increased customer satisfaction and retention. User profiling that leads to improved service offerings.

Challenge

Companies are sitting on a massive trove of customer data in the form of phone transcripts, emails, and surveys. The challenge lies in extracting, analyzing, and summarizing this type of data that is not easy to process.

Another consideration is keeping the customer’s personal data secure in order to remain compliant with company and government data protection policies.

Solution

Advanced forms of NLP are designed to handle the unique syntax, vocabulary, and other nuances of human language.

An NLP vendor can provide an on-premises solution to eliminate the complications of transferring data to a third party vendor and ensuring that vendor processes and handles the data according to the insurance company’s data protection policies. With on-premises, the client hosts the software on their own servers; the insurance company is responsible for processing and storing all data.

The insurance company supplies the NLP vendor with a taxonomy of topic areas that they are most concerned about, such as whether a service representative was rude or nice, or if a representative resolved an issue quickly or slowly. The NLP can be built to take into account various forms of language that relate to the various topics. It can also identify multiple sentiments and events within one call.

Example: "My first rep was great, but he transferred me to another rep, who then transferred me to another rep. It took two months for my claim to solved."

The NLP vendor can develop a model that quickly extracts, categorizes, and summarizes these various events, and also provides a sentiment score for those events.

Outcome
  • From the dashboard, account managers can easily identify customers who are more likely to leave based on sentiment scores and the extracted data behind the scores.
  • Armed with this information, managers are able to respond more effectively when they reach out to these individuals.
Risk

Underwriting and Claims Text Analytics

Revenue generation based on pricing decisions and loss mitigation from not underwriting a company who later is hit by a huge lawsuit.

Challenge

At the start of the decision-making process, underwriters are generally provided with only two main data sources: the client-provided information in the application form and previous claims led against the applicant’s insurance policy. From there, they may use Google search, social media, and online news sites to locate any red flags that would impact the final evaluation.

Because the research methodology is manual and ad-hoc, there is a strong likelihood for unknown risks in the portfolio.

Solution

The insurance company can use NLP technology to automate the risk monitoring process.

A vendor with the ability to customize and quickly execute their technology can build a platform that captures news from a wide array of cloud-based documents, whether it is news on private or public companies, SEC filings, or earnings call transcripts.

The platform then scans the content for the insurance company’s specific view of risk. If there is a news story about the applicant in the context of that risk, the underwriter can factor that information into his or her decision.

The build-out process may involve several stages in order to reach an automation process that is an improvement on the existing process. After the vendor creates the initial model, the insurance company will assess the data results to determine which areas need fine tuning. The vendor then adjusts the model. There may be several iterations before finally arriving on a custom solution that automates risk detection according to the specific way the insurance company views risk.

Outcome

The underwriter can now log onto the platform dashboard, select the relevant company, and see the number of mentions around the associated risk topic over a period of time.

  • For example, the underwriter may see that a pharmaceutical client had 35 mentions around the risk topic cannabis over the past year.
  • Based on that information, they can decide whether to not underwrite the policy or adjust the pricing because of the risks associated with the account.
Supply Chain

Quantifying Supply Chain Risk

Automatically surface emerging risks across financial, operational and sustainability factors.

Challenge

The Third-Party Risk Management team from a large corporation was tasked with understanding the risk exposure of their suppliers created by the COVID-19 pandemic.

Solution

Amenity created a customized NLP model to identify any news story about the impact of COVID-19 on any of 1,200 suppliers to the corporation – turning extracted data into analytic dashboards, and enabling real-time email alerts for emerging risks.

The NLP model automatically surfaced risks according to three distinct categories:

  1. Financial: Business Factors; Business Commentary; M&A; Guidance: Deals: Employement
  2. Sustainability: Climate Risk; Pollution Management; Diversity & Inclusion; Reputational Profile; Product Quality
  3. Operational: Cyber; Product Liability; Legal; Technology; Pandemic
Outcome
  • Creation of an effective enterprise risk management system.
  • Actionable and accurate business intelligence in real-time from various data sources.
  • Filtering the noise and separating meaningful insight from a sea of volatility.
Operations

Sales Process Text Analytics

Grow and retain customer base; maximize profitability.

Challenge

Key account executives are looking to arm their sales reps with timely, relevant lead intelligence on a broad area of topics related to their customers—business trends; company reputation; competitive intelligence; product launches; market insights; deals; financial and legal news; and so on. This information helps reps to determine why, when, and how to approach companies for ad placement.

Executives may task a strategic insights group or another department with gathering and distributing this information. In either case, the process is ad-hoc and manual. They often perform research using Google Alerts, web searches, and social media, and record and track this information in MS Word documents or spreadsheets.

It is difficult to cut through the noise in order to identify trends.

In addition, executives have no systematic way of measuring and scoring this information for overall sentiment (how positive or negative was the story) and impactfulness (is it a big or small story). A news story about the recall of a client’s product is a critical event—one that the sales rep should jump on—as opposed to a story about the client winning an award.

Solution

A cloud-based, NLP solution can be used to track specific names and sectors; scan the news, major publications, social media, and wire services for relevant insights; and surface those articles through an interactive dashboard.

Based on the information provided by the media company, the NLP vendor creates a specific taxonomy that allows company to watch for commentary from trusted online sources that talks in a very specific way about their clients and their products. The NLP then compares the quantity of these highlights along with the sentiment over time. It can also compare the performance of its clients to the clients’ competitors and to the industry sector average.

The NLP technology integrates with customer applications like Salesforce so that sales teams have a holistic view of client intelligence where they are accessing and tracking customer data.

Users can also access this information directly from a web-based platform. The platform is interactive and allows for filtering by company, sector, and topic. It can also send emails that are customized to the users.

Sales reps are able to understand fairly quickly how their clients are being discussed or perceived in the media. They can provide recommendations on campaigns, including which media areas to consider for ad placement, so that they can enhance or counteract media mentions.

Reps can even be specific with the product or service being advertised, given the topics in the news. For example, there may be an article about the efficacy of a face cream in a high-profile publication that is fairly positive about that brand’s face cream.

The sales rep could reach out to this advertiser client to inform that they have media with the outlet that had published the article and to pitch ad placements there—since the placements would be contextually relevant and land favorably relative to the content.

Outcome
  • Creating consistency in terms of the expectations that management, strategic, and research teams have of sales.
  • Giving all departments a tool with which to be consistent.
  • More actionable and accurate business intelligence.
  • Drive corporate strategy with data points that are the closest (and hardest to capture) to customers and end users.

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