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Potential Customer Lifetime Value in Financial Institutions: The Usage Of Open Banking Data to Improve CLV Estimation

Author

Listed:
  • Jo~ao B. G. de Brito
  • Rodrigo Heldt
  • Cleo S. Silveira
  • Matthias Bogaert
  • Guilherme B. Bucco
  • Fernando B. Luce
  • Jo~ao L. Becker
  • Filipe J. Zabala
  • Michel J. Anzanello

Abstract

Financial institutions increasingly adopt customer-centric strategies to enhance profitability and build long-term relationships. While Customer Lifetime Value (CLV) is a core metric, its calculations often rely solely on single-entity data, missing insights from customer activities across multiple firms. This study introduces the Potential Customer Lifetime Value (PCLV) framework, leveraging Open Banking (OB) data to estimate customer value comprehensively. We predict retention probability and estimate Potential Contribution Margins (PCM) from competitor data, enabling PCLV calculation. Results show that OB data can be used to estimate PCLV per competitor, indicating a potential upside of 21.06% over the Actual CLV. PCLV offers a strategic tool for managers to strengthen competitiveness by leveraging OB data and boost profitability by driving marketing efforts at the individual customer level to increase the Actual CLV.

Suggested Citation

  • Jo~ao B. G. de Brito & Rodrigo Heldt & Cleo S. Silveira & Matthias Bogaert & Guilherme B. Bucco & Fernando B. Luce & Jo~ao L. Becker & Filipe J. Zabala & Michel J. Anzanello, 2025. "Potential Customer Lifetime Value in Financial Institutions: The Usage Of Open Banking Data to Improve CLV Estimation," Papers 2506.22711, arXiv.org.
    • Handle: RePEc:arx:papers:2506.22711
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    File URL: http://arxiv.org/pdf/2506.22711
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