Bank Hapoalim Offers Investment Decision Support for Individual Customers

The Problem

Bank Hapoalim is the Workers' Bank of Israel and one of the country's major financial institutions. The bank's brokerage service needed to develop an automated system to make reliable investment recommendations for its clients. The problem was critical because the bank’s clients expected timely, valuable investment advice customized to their individual needs. Providing it would require analytics expertise in reviewing numerous investment options, generating potentially successful investment portfolios, and decision making.

The Analytics Solution

The Operations Research department at Bank Hapoalim developedOpti-Money, a model-based investment decision support system for individual customers.

The Value

 
In the period 1998–2002 the cumulative return forOpti-Money users was an impressive 32.4% for customers with conservative investment strategies and a remarkably high 50.6% for less risk-averse customers. This compares with a cumulative return of 15.8% on Israel's Consumer Price Index and 16.7% on the Tel Aviv stock market. In the first three quarters of 2002, buy-and-sell orders given inOpti-Money sessions totaled $21 billion. Bank annual net income directly attributed toOpti-Money exceeded $24 million.