This is the 3rd Blog in the series on “The Future of Revenue Growth for Banks”. Stay tuned for more insights from Darren by subscribing to our Blogs.
Building the case for change: Dynamic pricing and product cataloguing
The end-to-end revenue management cycle should be viewed as a client-centric infinity loop of business activities. These business activities provide dynamic pricing options that deliver bottom-line revenue. With Oracle Financial Services Revenue Management and Billing (ORMB) solution your target operating model allows you to provide your customers with a range of aligned and integrated products and services. These products and services coalesce to provide you with a global view of the total overall relationship. The ORMB solution links together and automates the complexities of the end-to-end revenue management lifecycle for all key operational areas, including product management, sales, operations, and finance.
For the bank, ORMB provides increased visibility and control around deal compliance and becomes key to driving customer behaviour. Customer transactional activity is closely monitored against the terms and conditions of sale with alerts and exceptions being generated for those customers who transact outside of reasonable tolerance. At the same time, sales and account managers are aligned to customer behavior, and overall profitability and incentive payments can be adjusted based on actual customer behaviour.
The application also gives banks a comprehensive infrastructure for placing command and control within all steps of the revenue management infinity loop and maintains full audit and traceability of all user actions. The resultant effect is that ORMB improves the ability of banks to manage financial risk and regulatory exposure in today's risk-averse world.
It is common for all banks to charge service and transaction fees. However, there is often disparity and inconsistency between products, lines of business, and regions. This is usually a result of inconsistent and siloed product lifecycle management practices and poor pricing administration. The increase in competition, customer demand, and regulation means that banks must look to deliver new products to the market more quickly than their competitors and at a manageable cost. This is challenging for banks operating on decades-old business and IT infrastructure. ORMB allows banks to manage their product and pricing hierarchies in one place. This enables them to react immediately to continually changing market conditions and increase speed to market for new products and services.
The key to this agility lies in being able to configure new products and pricing agreements while having the power to enforce eligibility rules. This means that products can be bundled in innovative ways and quickly tailored to specific customer segments or industry sectors. The flexibility to deliver product bundles against dynamic pricing rules means that products can encourage cross-selling and up-selling. This allows opportunities to grow and deepen customer relationships, and share of wallet. The result is higher customer satisfaction through reward for using more products, less attrition, and confidence that revenue leakage remediation is well managed.
Implementing standard rate cards or dynamic pricing also allows for conditional rules to be set in ORMB. These conditional rules include discounts, tiers, volume, and value-based pricing agreements with the ability to pro-rate during a charging cycle. With ORMB, across the board, pricing for customers using one or more products and services regardless of relationship, or profitability is a thing of the past.
Bank management staff have greater control over pricing decisions and automated configured workflows safeguard against unauthorised, or out of tolerance pricing over-rides with approvals built into the system.
In summary, creating competitive product bundles for the right target markets means that your customers will begin to truly value your services and how you conduct your business.
This is my third 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.
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