Factor analysis and classification methods: An application to the study of corporate custom

Banks have numerous data available for the management of their corporate customers. But they often only use a small part of it (financial data) and frequently disregard qualitative or subjective information accessible at their branches (capacity to export, flexibility with regard to credit squeeze,…). However, some methods for quantifying and homogenizing the various sources of information can be used in order to best exploit them. After having thus developed a complete profile of each client, factor analysis enables us to extract the most significant variables and achieve a meaningful synthesis. In this way, we get a limited selection of criteria which can be easily updated. A subsequent use of factor analysis and classification methods for the selected variables brings out typologies and gives prominence to customer evolution. Such a methodology is useful in the decision making process and enables us to build up a consistent policy for the management of the whole range of customers.