Based on extensive industry review, the tables below show the most commonly used applications of predictive modeling for selected industry groups.

Financial Services
Healthcare
Telecom & Utilities
Government / Education / Non Profit
Manufacturing, General Business, Transportation & Logistics

	Banking & Mortgage Lending	Credit Cards	Insurance	Securities / Brokerage
Customer Relationship Management (CRM)
Precision Marketing – Acquire New Customers	New customer acquisition	New customer acquisition	New customer acquisition	New customer acquisition
Retain Customers – Enhance customer loyalty	Lifetime value analysis Loyalty programs	Lifetime value analysis Loyalty programs	Lifetime value analysis Loyalty programs	Lifetime value analysis Loyalty programs
Defection and Churn Management	Proactive programs to deter defection and churn	Proactive programs to deter defection and churn	Proactive programs to deter defection and churn	Proactive programs to deter defection and churn
Cross Sell / Up Sell	Design of cross sell and up sell programs	Design of cross sell and up sell programs	Design of cross sell and up sell programs	Design of cross sell and up sell programs
Risk Management
Fraud Detection		Detect and deter fraud directly in the transaction stream in real time.	Manage fraud in claims – especially health, auto, and workers comp.
Credit Scoring	Custom credit scorecards for retail and business lending	Custom credit scorecards for retail and business lending	Custom scoring of underwriting risk.
Billing Review			Prevent accidental under billing
Planning & Optimization
Forecasting	Forecast prepayments Forecast interest rates Forecast defaults		Forecast specific liability types	“Quants” are major consumers of predictive models in constant search of alpha opportunitie

top

	Healthcare Providers
Customer Relationship Management (CRM)
Retain Customers – Enhance customer loyalty	Wellness programs – pay for performance planning Impact of clinical practices on finance
Risk Management
Fraud Detection	Identify potentially fraudulent claims before they are sent to payers
Billing Review	Review patient billing for unintentional under billing prior to issue
Planning & Optimization
Forecasting	Capacity prediction – when divert situations are likely to arise
Optimization	Self-pay returns optimization – prioritize claims most likely to pay in a timely manner
Claim Denial Management	Predict in advance claims likely to be rejected before they are sent to payers.
Other	Payer negotiations – identify key drivers for underperforming payers

top

	Telecom	Utilities: Electric, Gas, Water
Customer Relationship Management (CRM)
Precision Marketing – Acquire New Customers	New customer acquisition
Retain Customers – Enhance customer loyalty	Lifetime value analysis Loyalty programs
Defection and Churn Management	Proactive programs to deter defection and churn
Cross Sell / Up Sell	Design of cross sell and up sell programs	Identify customers most likely to accept conservation rewards programs
Risk Management
Credit Scoring	Custom credit scoring for major business customers	Custom credit scoring for major business customers
Billing Review	Detect and correct unintended under billing.	Detect and correct unintended under billing.
Time to Failure		Predict time to failure on generation equipment, transformers, or other capital intensive mission critical equipment subject to variable operating conditions.
Planning & Optimization
Forecasting	Forecast demand by the (hour / day) over the coming (24 hours / week / month) to balance loads and maintain service levels.	Forecast the price of (gas / electricity / water) by the (hour / day) over the coming (24 hours / week / month) to optimize wholesale purchases. Forecast demand to prevent outage.
Optimization		Optimize the output of a network of generating plants for least cost.

top

	Banking & Mortgage Lending	Credit Cards	Insurance
Customer Relationship Management (CRM)
Precision Marketing – Acquire New Customers	Attract citizens to specific programs	Student recruitment	New donor acquisition
Retain Customers – Enhance customer loyalty		Alumni giving and loyalty programs	Loyalty programs
Defection and Churn Management		Identify students at risk of dropping out
Cross Sell / Up Sell		Design of programs to increase alumni year-over-year contributions.	Design of programs to increase year-over-year contributions.
Risk Management
Fraud Detection	Tax return audit evaluation Social services claims evaluation	Manage fraudulent aid requests
Billing Review	Property tax billing review
Planning & Optimization
Forecasting	Demand forecasting for municipal services
Optimization		Evaluate student success and outcomes

top

	Manufacturing and General Business	Transportation & Logistics
Customer Relationship Management (CRM)
Precision Marketing – Acquire New Customers	New customer acquisition	New customer acquisition
Retain Customers – Enhance customer loyalty	Lifetime value analysis Loyalty programs	Lifetime value analysis Loyalty programs
Defection and Churn Management	Proactive programs to deter defection and churn	Proactive programs to deter defection and churn
Cross Sell / Up Sell	Design of cross sell and up sell programs	Design of cross sell and up sell programs
Risk Management
Fraud Detection	Detect fraudulent warranty claims
Credit Scoring	Custom credit scorecards for commercial and retail credit	Custom credit scorecards for commercial credit
Billing Review	Prevent unintentional under billing in business with high volumes of periodic billings.	Prevent unintentional under billing in business with high volumes of periodic billings.
Time to Failure	Predict time to failure on capital intensive mission critical equipment subject to variable operating conditions.	Predict time to failure on capital intensive mission critical equipment subject to variable operating conditions.
Planning & Optimization
Forecasting	Forecast supplier costs Forecast end user demand Forecast raw materials and energy prices	Forecast supplier costs Forecast end user demand Forecast raw materials and energy prices
Pricing	Forecast price / volume relationships to establish pricing for existing and new products. Especially useful in automotive.	Forecast price / volume relationships to establish pricing for existing and new products.
Optimization	Model the operation of continuous process plants or operations to optimize output based on different input and operating constraints. Optimize the supply chain. Utilize predictive modeling to bring new levels of sophistication to statistical process control	Optimize routing Optimize rolling stock utilization

top