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Unlock hidden value in existing customer relationships

Is relationship pricing and billing on your radar for 2013?

Did you know? For every $1 billion in annual revenue generated by global transaction services, banks can “leak” upwards of $25 million – revenue they should be collecting.

Let’s face it. There’s no shortage of challenges currently facing global transaction banking. Against a backdrop of increasing competition, tightening regulation and limited resources, it’s becoming more and more difficult for cash management banks to source and retain new revenue. Relationship managers are looking to hit their sales targets, while product managers want to make sure those targets are profitable.

As you review your plan of attack for 2013, consider looking inward first. Are your current product and service offerings relevant and profitable? Are your internal systems and processes synchronized and streamlined? Perhaps most importantly, are you making the most of the relationships with your existing customers? How can you bring these opportunities together and harness their potential? To answer the questions, we want to shift the paradigm from “What is possible?” to “What would be ideal?”.

In the global cash management space, each of your customers is truly unique – from internal structure and geographical representation to business objectives and supporting technologies. Within the current banking environment, the challenge of facilitating long-term revenue assurance requires a comprehensive strategic vision, including optimizing your pricing and billing capabilities to cater to each individual customer effectively.

With a strategic relationship pricing and billing platform, you can empower your organization with a consolidated, ‘360 degree’ global view of your customer. Offer flexible pricing and billing options to your customers based upon the entire relationship, not just a single product line or business unit. By enforcing contractual agreements on fees that currently are not billed correctly – or perhaps not billed at all – you can address revenue leakage issues and maximize profitability, all without signing any new customers.


Comments: (2)

A Finextra member
A Finextra member 03 February, 2013, 00:07Be the first to give this comment the thumbs up 0 likes

Thanks Kyle,

Your questions about the “possible” and the “ideal” are good ones.  In any competitive event we would like to line up and over-power the competition.  In reality that is seldom the result.  Rather, we find that each party brings to the table science and art.  Some people tend to emphasize the power of science and some the finesse of art.  I observe that those who blend both together are ultimately sustainable winners.

I noted the term flexible pricing in the last paragraph.  I find too often “flexibility” is interpreted by someone at the table as compromise.  It strikes me that tools that bring the science of efficiency and effectiveness to the front line banker to promptly determine equivalent options through dynamically adjusting structure and accordingly price are the ones who deliver the win-win solutions.  Otherwise “flexibility” is detrimental to the bank’s goals.

As you consider the broader customer relationship, I urge bankers to be mindful of growing the value of the total relationship rather than purging value in pricing the next transaction.  There are times when maintenance and even some deterioration of total relationship value is preferred to loss of the relationship.  If you have the science at your disposal to measure the present, ideal, and compromise alternatives, then it becomes an opportunity for the art of negotiation.  Without tools like you describe the financial professional is at a disadvantage.  Today’s banking environment is too competitive for bank executives to leave their people with this type of vulnerability.


A Finextra member
A Finextra member 04 February, 2013, 17:42Be the first to give this comment the thumbs up 0 likes

Thanks for sharing your thoughts, Neil. I particularly like the reference to the need for balance between the power of science and the finesse of art.