In banking, CTG stands for Customer To Group. It refers to a ratio that banks maintain on their portfolio by grouping individual customers, often with their family members, who may already hold accounts with the bank. This grouping allows the bank to manage its customer base more effectively and maintain a comprehensive view of household relationships.
Understanding Customer To Group (CTG)
Here's a detailed look at CTG in banking:
- Definition: Customer To Group (CTG) is a method used by banks to organize and manage customer data by linking individual customers to a defined group, typically family-based. This differs from simply viewing each customer as an isolated entity.
- Purpose: The main purpose of CTG is to gain a holistic view of a customer's relationships with the bank, including family members and related accounts. This allows the bank to:
- Improve Risk Management: By understanding the relationships within a group, banks can better assess the overall financial risk associated with that group.
- Enhance Customer Service: Having a consolidated view of a household's banking relationships allows for better targeted services and personalized customer service.
- Cross-Selling Opportunities: Identifying group members allows banks to discover opportunities to offer new products or services tailored to the entire household.
- How It Works:
- Banks identify family relationships through various means, such as shared addresses, linked accounts, or direct customer declarations.
- Customers are then grouped accordingly.
- The CTG ratio then represents how efficiently the bank is leveraging these grouped customers.
- Example:
- A family of four has different accounts. The father has a checking account and a mortgage, the mother has a savings account, and the two children have their student bank accounts, instead of view each customer in isolation, the bank will group all under the same CTG for a clearer picture.
Benefits of CTG for Banks:
- Improved Portfolio Management: Allows banks to manage their portfolio by considering all related accounts.
- Better Risk Assessment: Provides a more complete picture of the financial relationships and potential risks.
- Enhanced Customer Experience: Leads to more personalized banking services and tailored product recommendations.
CTG and Account Management
The grouping of individual customers and the monitoring of the CTG ratio also helps in account management. This helps in keeping track of:
- The total number of customers in each group.
- The total value of assets under each group.
- Account performance analysis by group.
Summary
CTG in banking is a method of grouping individual customers to create a comprehensive view of households, which allows banks to better manage risk, offer improved customer service, and identify opportunities for cross-selling, as well as more efficiency in managing their portfolio. This practice is crucial for maintaining the health and profitability of banking institutions.
