Better Revenue Management and Billing:Hedging against “Too Big to Fail”

As global banking leaders prepare for Sibos in Boston, regulation and compliance is top of mind. As noted by the Sibos blog itself: “When Boston last hosted Sibos, Bear Stearns and Lehman Brothers were still in business and concerns about the US sub-prime mortgage crisis were only just beginning to assume wider significance for the global financial system. Returning seven years later, Sibos delegates will undoubtedly reflect on the nature of the global financial crisis, the regulatory response and the competitive challenges that lie ahead as the banking industry looks to find new ways to serve retail, corporate and institutional clients.”1

Bank capital requirements such as Basel III (The Third Basel Accord) are one way that regulators are seeking to restore faith in the banking industry. Stress testing exercises implemented by regulators world-wide indicate whether these capital cushions are performing.

There have been some predictions that Basel III will negatively impact banks and bank customers, as well as the economy in general, by driving up the cost of lending as banks seek to maintain the capital required by these global rules by passing the costs on to their customers. So while Chief Compliance Officers at banks and others in the compliance matrix need to ensure that their institutions are able to meet the capital requirements, and comply with KYC and other rules the conundrum is how to do that without alienating bank customers? 

While certainly not a simple answer, much of the underlying challenge is rooted in a bank’s data: data management, data sourcing, data integrity and consistency of data sets. Chief Compliance Officers know that they need better access to data and have wasted no time in asking their operations teams to centralize the banks data in order for it to be analyzed as needed for forecasting. Better data – especially on how customers are transacting business, what they are buying from the bank, and what they are paying 2  – is absolutely essential for driving client behavior and understanding product profitability.

Another way that banks have adjusted to new capital requirements is in their pricing models for transacting in risky markets. It is crucial that banks be able to implement better dynamic pricing for products and services based on risk-based rules. Accurately reflecting the cost of risk in product pricing could go a long way in helping banks to meet the regulatory requirements, while selecting which businesses they want to be in 3

Additionally, data related to bank revenue should be actively monitored to ensure accuracy and reduce risks. Legacy billing systems with manual inputs leave a lot of room for error, thus marring the data sets and increasing regulatory risk 4.Oracle Financial Services Revenue Management and Billing (ORMB) provides true relationship pricing to provide a single view of the customer and can be leveraged as authenticated golden source data. 

Avoiding “Too big to fail,” is a key goal not just for regulators, but for the banks themselves. Restoring customer trust and offering services that help their customers grow their businesses is the objective of transaction banking. In the last seven years, understanding the crucial nature of data within the bank, how to leverage it both for business and compliance has taken a tremendous leap forward. Perhaps by the time the next Sibos in Boston rolls around, banks will be talking about the new products and services they were able to give customers due to better data, better compliance, and reduced risk. 

At SIBOS 2014, Oracle invites you to visit us @ Booth #A29 and join us at a session featuring Akshaya Kapoor to learn more about how Oracle is helping banks with revenue management in the current era of economic uncertainty and regulatory change. The session will be taking place at Sibos on 9/29 at 10 a.m. ET in Open Theater 1. 

Darren Cherry is a Director at Oracle; he can be reached at darren.cherry AT

Related Resources:

•For more information visit Oracle Financial Services Revenue Management and Billing

1Jamie Forese, “The Road to Renewal,” Sibos, 22 July 2014 <>

2Steven Lewis, “For Banks, Customer Data is the New King,” Ernst & Young and Retail Banker International, September 2013$File/EY-The-upside-of-compliance-Steven-Lewis.pdf

3PwC, “Modernize Billing and Revenue Management for Agility, Value, Compliance, and Competitive Advantage,” PwC, 2013

4PwC, “Modernize Billing and Revenue Management for Agility, Value, Compliance, and Competitive Advantage,” PwC, 2013


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