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An Event Driven Approach to Customer Relationship Management in e-Brokerage Industry. Dickson K.W. CHIU Wesley C. W. Chan Gary K. W. Lam Franklin T. Luk Dept. of Computer Science & Engineering, Chinese University of Hong Kong ,

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An event driven approach to customer relationship management in e brokerage industry l.jpg
An Event Driven Approach to Customer Relationship Management in e-Brokerage Industry

Dickson K.W. CHIU

Wesley C. W. Chan

Gary K. W. Lam

Franklin T. Luk

Dept. of Computer Science & Engineering, Chinese University of Hong Kong,,,

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Introduction and Motivation

  • CRM

    • Helps a firm to streamline customer services

    • Centralize its customers data for analysis purposes

    • Critical to the success of a business

  • Most recent CRM work

    • Concentrate on data mining

    • Construction of customer behavior models

  • This paper

    • Turns knowledge into business action

    • Carry out appropriate actions effectively and efficiently

    • Detailed system architectures

    • Implementation methodologies for CRM activities enactment

    • “Event-driven approach”

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Event-driven Approach

  • Motivated by the active database paradigm

  • Event - occurrence of something interesting to the system itself or to user applications

  • Event driven execution of rules in event-condition-action (ECA) form

  • ECA (active) rules: On event if condition then action

  • Exceptions and alerts are events too (action = handler)

  • Ensure efficiency and timeliness

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Brokerage Industry in Hong Kong

  • Has high potentials in collecting valuable client information (HKSFC requirement) - brokerage must keep client transaction records for 5 years

  • little room to increase its revenue through cross- or up-sale trading

  • Changes in industry

    • Endorsement of removal of minimum commission rule

    • Extension of trading hours of stocks and futures

    • Tightened requirements of liquid capital for margin trade loan – CRM for risk management

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SME Brokerage in Hong Kong

  • Most are SME firms (therefore our target of study)

  • Competition from big firms and banks - drop of market share from 23.01% to 19.04%.

  • Reduce operational cost

  • Increase revenue

  • Reduce client attrition rate

  • Move to e-commerce Internet platforms

  • Become more robust and cope with the changes

  • retain existing clients and to increase their satisfaction through effective coordination and enactment of CRM activities

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An Event Driven Approach to CRM


ICQ / email / SMS

Internet Alert Sender

CRM System



Active Rule


Environment Listener







Analytical Engine







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Heart - Active Rule Engine

  • Separate the active rule engine from the analytic engine

  • Knowledge discovery in the analytic engine is resource intensive and computational expensive

  • Triggering events from external sources - detected by the environment listener, the analytical engine or user input from the front-end subsystems

  • Time events generated by the system clock helps tracking deadlines (e.g., payment due dates)

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Backend - Data Warehouse

  • Oracle 8.1.7 Database Server on a Windows 2000 Server platform

  • For Online Analytic Processing (OLAP)

  • Client transaction and holding records retrieved from OLTP system

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Backend - Analytic Engine

  • Important changes or alerts are detected, these events will be forwarded to the active rule engine for processing

    • Client Value Estimation - expected profit from a client (Domingos and Richardson)

    • Client Attrition Alert - account balance, statistical behaviors

    • Client Risk Analysis - related to margin trade

    • Client Segmentation - transaction amount, frequency, recency, stock type, risk shouldering and other demographic data

    • Client Channel Analysis - trend of client contact channel and specifically for web presence by studying clients’ click-through

    • Marketing Campaign Analysis - studies the successfulness of a marketing campaign

    • Key Performance Indicator (KPI) measurement

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Backend - Environment Listener

  • Input from different marketand news data sources

  • E.g., Reuter’s services via Java Message Service (publish-and-subscribe mechanism)

  • Relevant data are stored into the data warehouse for later processing by the analytical engine or other retrieval purposes

  • Relevant events are passed to the active rule engine for processing.

    • Evaluation of several variables and of several values per variable

    • Related attributes can be evaluated similarly for speeding up (Cheung et al 2002)

    • Need to take in account of the dependencies among the issues

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Front-end – Broker Call Center

  • Relevant alerts - notify the broker to carry out follow-up actions

  • Demographical data, estimated trade limit, event logs

  • Follow-up service activities, personalized recommendations

  • Exploring cross-selling opportunities of stock derivatives

  • Record clients’ complaints, common queries, special requests

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Front-end – Managerial Application

  • Common reports with pre-defined queries / customized reports

  • Events and alerts related to high-valued clients directed to managers too

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Front-end – Client Portal

  • Consistent style and usability instead of eye-catching effects

  • Avoid graphical and multimedia interactive contents

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Lessons Learnt

  • Change of workflow and information management procedures

  • Should roll the online CRM web interface to the clients only after the CRM system’s operation has become smooth internally

  • Phased approach in system development and deployment

  • Verification of the required data from the legacy system is difficult and time-consuming

  • SME brokerages in Hong Kong are not quite familiar with advanced information technologies

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Benefits of Event Driven Approach

  • Business rules, in general, can be naturally modeled as ECA rules, which can be used for activity enactment, monitoring and exception handling

  • Implemented with JMS or other contemporary technologies, such as Web services

  • Rules can be added to, deleted from and modified for a system more easily than traditional software development approaches

  • Business environment keeps changing, users expect new features or functionalities

  • Abandon of a pure artificial knowledge discovery approach - turning understanding into action is the key to deriving real benefits

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  • Pragmatic event driven approach to CRM for the e-Brokerage industry

  • Practical system architecture and a working prototype – unified platform for automated actions and human expert attention

  • Discuss the use of different categories of business events from the clients, the firm and the market environment

  • Focus on efficient and timeliness of CRM activity enactment

  • ECA-rule paradigm

    • systematic specification of handling asynchronous business events

    • enables effective enactment of the specified handlers (actions)

    • deliver the most appropriate care to clients

  • Suitable for implementing CRM system for other e-commerce sectors by turning knowledge into business actions

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Future Work

  • Scale up CRM solution with J2EE

  • Mobile CRM with J2ME

  • Application in other service industries, e.g., insurance

  • Integration with workflow management system

  • B2B integration / Electronic Contracting

    • A Data-driven Methodology to Extending Workflows Across Organizations over the Internet (HICSS36)

    • An Architecture for E-Contract Enforcement in an E-service Environment (HICSS36)

    • On e-Negotiation of Unmatched Logrolling Views (HICSS36)

  • Enterprise Document Management

    • A Watermarking Infrastructure for Enterprise Document Management (HICSS36)