The date was April 17, 1970. Everything was going like clockwork on the Apollo 13 moon mission when all of a sudden it wasn’t. Oxygen tank #2 blew up, causing tank #1 to fail as well. The command module’s normal supply of electricity, light and water was
lost, and the crew were about 200,000 miles from Earth.
Getting the men home safely was one of NASA’s most extraordinary feats ever. You can just imagine everyone linked with the mission thinking, “if only we found the leak sooner.”
Bankers probably ask themselves the same question with respect to revenue. After all, identifying leaks can be a make-or-break factor in determining success. But this is the reality:
- Disparate legacy systems contribute to leakage.
- Once leakage starts, it’s hard to stop it.
As a rule of thumb, the only time you hear from the customer is when they’re being overcharged; undercharged customers never speak up. And whenever you’re overcharging, you also undercharging.
"Unlocking Cash and Revenue Opportunities with Revenue Assurance" by Brice Lecoustey from Ernst & Young highlights how several industries face the same difficulties in safeguarding their revenues, and they all have a few things in common. They have huge
transaction volumes, a large number of customers, small revenues per client, complex and interfaced environments and third party involvement.
Ernst & Young also says recent studies have revealed that leakages range from 1% to 7% of gross revenue, depending on the level of maturity of the processes and controls environment.
Ironically, pricing transparency is often a root cause of leakage. By law, banks must pre-notify certain customer segments of their service fees. But confusion sets in when disparate legacy systems can’t recognize missing transactions and pricing.
Banks tend to address the problem with short-term fixes and quick wins. But revenue leakage is like rust: once it starts, it spreads. Short-term fixes or repairs only hide the real problem until it appears again in the same spot. The same is true with repricing
to fix the leakage. Revenue degradation just starts to occur again, and you’re in the same spot within two years.
It may seem like stopping revenue leakage is like trying to bring stranded astronauts back from the moon. But it can be done by replacing decades-old point solutions with a single, automated billing platform.
- Obtain a single view of the truth.
- Identify where leakage is occurring.
- Figure out how to decrease it.
- Generate revenue quicker.
You can see what the customer agreed to pay, what they’re actually being charged, and how much revenue and profit is generated from the account. You can eliminate pricing and billing mistakes, comply with regulations and drive customer satisfaction.