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The future of revenue growth for banks – cost reduction through streamlining operations

Darren Cherry
Consulting Practice Director, EMEA

Oracle Revenue Management and Billing (ORMB) will help you successfully restructure your client services and back-office operations by delivering process automation and removing manually intensive and time-consuming tasks. Many of these processes were developed as temporary stop-gap initiatives that became part of business as usual (BAU) as legacy billing applications were not good enough to encompass all stages of the revenue management and billing process. The blame shouldn’t lie with the back-office, however.  When we apply some root cause analysis to the issue, we find that the problem germinates much further upstream. Poor revenue management is a consequence of poor relationship management, and the two principles must align. Streamlining the end-to-end revenue management and billing process helps banks with pricing optimisation, deal compliance, and improving billing accuracy.

By integrating people, processes, and technology, banks can improve operational efficiency by implementing products promptly, performing ‘what if’ and scenario-based mapping before launching to market, and effectively monitoring deal compliance at all organisation levels.

With experience in delivering solutions to banks, Oracle has three key recommendations on how to streamline operations:

1. People:  product and process focus

Achieving sustainable performance and balance between productivity, effectiveness, and quality gains require strong functional expertise at all stages of the revenue management and billing process.  Efficiencies are gained through greater discipline across products, customer segments, and divisions. The target operating model should ensure the operation is closely aligned to the revenue-driving business units at all revenue management cycles.

Spotlight: Product Management

For example, using a revenue management tool, a product manager can more clearly identify market needs and respond appropriately. Detailed trend analysis identifying client behaviour leads directly to market and product development opportunities. Future product strategy is more confident as roadmaps can be linked to specific KPI’s based on intimate transactional knowledge.  For existing products and services, a product manager can assess the product lifecycle and identify growth opportunities and to decommission underperforming or non-profitable products and services.

As market agility is key to business performance, using a revenue management tool, a Product Manager can deliver high customer value by running proof of concepts to solve client needs and problems and bundle products according to customer needs whilst validating the right price point for the market.  Overall, the product manager has complete control of their portfolio, allowing for a total P&L contribution to the top and bottom line income.

2 Processes: product, price, and customer focus

When undertaking business process redesign, the target operating model ‘to-be’ architecture should be based on the customer experience. It should be driven by how you want to serve your customers and what processes are needed to support that proposition. For example, a Corporate bank’s sales strategy needs to consider revenue acceleration through x-sell/upsell activities which can be done through targeted offerings to client segments.

Using revenue management and billing tool acts as a sales enabler which supports the relationship manager through the Lead-to-Cash process. The revenue management tool has a complete transactional ledger leading to a greater understanding of client’s banking needs allowing the bank to sell the most appropriate and profitable products to their customer base.  A tool such as Oracle’s Revenue Management and Billing application can also look at sales compensation and incentivisation by providing the right tracking level to drive a high-performance sales culture. The bank benefits by increasing the wallet share and deepening their relationship with their clients while having revenue certainty.

Spotlight: Operations

A revenue management tool provides value for operations based on increased efficiency, visibility and agility:

Efficiency

Visibility

Agility

  • Delivering more with less (people, processes, technology)
  • Knowing the current status of all workflows and processes
  • Adapting quickly to changing business needs
  • Reduced process and workflow execution time – streamlined process execution
  • Decreased risk in process execution
  • Reduced time to market for new products
  • Reduced Process Execution costs
  • Increased regulatory compliance
  • More time to react to market conditions
  • Increased process throughput
  • Reduced Process exceptions
  • Increased new revenues
  • Increased user productivity
  • Faster proactive decision making
  • Increased existing revenues
  • Increased cash flow
  • Increased client satisfaction
  • Reduced development, deployment, integration and maintenance costs

Technology: from build to buy

Most banks lag behind global best practices in this area. The build approach to technology infrastructure bears costs: high risk/delivery cost, more difficult to govern, and a real probability of not delivering benefits. Build overbuy also risks low adaptability for future business expansion and product growth. In contrast, packaged applications like ORMB are offered as a commercial off-the-shelf solution, with low risk and real benefits to be realised.

Using an on-premise solution, or by taking advantage of our SaaS and PaaS offerings, Oracle can help you deliver service quality whilst having certainty on your total cost of ownership which will naturally reduce as you decommission your myriad of applications that all play a part in your existing product management, pricing and billing systems.  ORMB is designed to provide integrated revenue management and billing to customers that captures much more of their relationship with the bank, resulting in improved service quality and consistency across global business lines.

Spotlight: Technology

This is my fifth blog post in a series of blogs on how banks can enjoy revenue growth by adopting the right technologies and best practices. To learn more, feel free to message me to explore more or have a conversation.

For more information, please visit:
Oracle Revenue Management and Billing Quick Start Program: Visit solution page
Oracle Financial Services: oracle.com/financial-services

More from Darren Cherry:
Blog #1: The future of revenue generation for banks
Blog #2: End to end revenue management
Blog #3: Dynamic pricing and product cataloguing
Blog #4: Remediating revenue leakage

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