Blog article
See all stories »

In their own words: Relationship pricing in retail banking

On Wednesday, November 13, we hosted a webinar on enhancing retail bank revenue and profitability with product bundling and relationship pricing.

Two key themes emerged from the discussion, including the need for banks to transition from product-centric to customer-centric propositions and provide customers with a meaningful value exchange.

Also, time-to-market is a clear consideration, as our informal poll suggested that about half of the webinar participants require somewhere between six to twelve months to bring new products to market, with some requiring more than a year.

We’d like to extend a special thanks to Tom Groenfeldt, contributor to Banking Technology and Forbes, for moderating our webinar.

Highlights:

“It is a common theme across small and large banks that many bank systems were really not designed to give them a flexible product design and pricing functionality across the customer relationship. This makes it hard for lines of business to price their products across the relationships, so there is a real struggle with systems and organizational structure.”

-Glenn Grossman, Solutions Consultant, Zafin

“Typically, our systems don’t allow us to look across the customer level. If the customer has two, three, five products with you, you don’t really have a place to get that view. It’s critical to think about a customer as a customer, as opposed to a sequence of products.”

-Alex Roddy, Senior Vice President, Bank of the West

“Banks are facing marginal erosion pressure and there is new competition, no or slow interest rate growth, new customer demands and regulatory pressure. Banks are really needing to rethink how they operate – not just differently, but in a cost-effective way.”

-Seth Rosensweig, Managing Director, AlixPartners

“The cost of switching banks is starkly low and now more than ever, customers and regulators have been sensitive to these value exchanges. Essentially, customers are paying more attention and they are expecting more value for service. So the more I can speak the language of the customer, the more I can offer products and bundling and specific prices on what they client particularly wants. This is really at the heart of this discussion.”

-Seth Rosensweig, Managing Director, AlixPartners

“Just about anyone can make a hamburger, but can you make it profitably? To me, it’s important to pull both parts of the equation together around revenue enhancement and capturing customer wallet, but doing it in a profitable way. How do you do it without investing hundreds of millions of dollars to replace the legacy systems, but being strategic and practical to give the client what he or she needs without breaking the bank?”

-Glenn Grossman, Solutions Consultant, Zafin

“Pricing is a science. There are tools to help you make good pricing decisions, but pricing is a science. It is proprietary and we are very thoughtful and careful about how we price things – how we understand price/volume trade-offs and what is value creative versus value destructive.”

-Alex Roddy, Senior Vice President, Bank of the West

2411

Comments: (0)