2020 foresight relationship pricing-br-

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2020 foresight relationship pricing-br-

  1. 1. 2020 Foresight: Relationship Pricing Synopsis The report provides top-level market analysis, information and insights on relationship pricing strategies adopted by retail banks: It provides global snapshot of relationship pricing adopted by retail banks in developing and developed economies in the banking industry. It analyzes relationship pricing trends and key operational opportunities for retail banks. It gives a detailed analysis of relationship pricing models adopted by retail banks globally. Summary With changes in economic fundamentals, technology, regulatory frameworks and competitive dynamics, the retail banking industry has recorded a gradual transformation in its banking business models since 1990. Following the financial crisis, banks analyzed the importance of building a profitable and long-term relationship with their customers to increase revenues and profitability. Since pricing is affected by cost pressures and changing customer expectations, banks use the opportunity to build a strong customer relationship by offering a customer-centric business models based on relationship pricing. Banks apply different relationship pricing models including product bundling, behavior- and time-based pricing, and personalized pricing to a diverse customer base which suits their individual banking requirements and willingness to pay. Product bundling enables the single point management of packages, prices and promotional offers to customers, providing customized packages and bundles including products and services from different business lines, rather than selling one product or service at a time. NatWest in the UK offers product bundling with discounted features which has resulted in an increase in profit margins. Banks also offer time-based pricing by providing differentiated prices for new and existing customers and categorizing these according to their long- and short-term associations with the bank. Wells Fargo offers higher interest rates in its certificate of deposits (CD) or savings account at the end of every month, enabling existing customers to earn extra interest as an incentive to save more and increase their assets with the bank over time. Behavior-based pricing, based on the overall purchasing behavior of customers, involves offering various promotional offers and discounts on products and services. This enhances the long-term relationship of customers, resulting in higher profit margins and revenues. Through personalized pricing, banks generate and apply customized pricing for specific customers or customer groups. The bank calculates a customers financial status and suggests a customized solution. Banks are adopting advanced technology to enhance their banking solutions and build strong customer relationships. Banks have signed up with a number of analytical firms to develop frameworks and applications to use data collected from customer transactions. The use of advanced customer analytics tools in relationship pricing helps banks to understand consumer buying behavior, enabling them to offer personalized services which results in an increase in customer acquisition and retention. This approach also helps to target and 2020 Foresight: Relationship Pricing<br>
  2. 2. isolate the most profitable customers and phase out pricing that does not offer significant value. Scope This report provides a comprehensive analysis of relationship pricing models adopted by retail banks It details insights on emerging operational, technological and regulatory trends driving the adoption of relationship pricing across developed and emerging economies It provides an overview of loyalty programs as an approach to relationship-based pricing models It provides case studies on relationship pricing implemented by various retail banks and their outcomes Reasons To Buy Understand the concept of relationship pricing and its adoption across key markets worldwide Assess the current and future opportunities of relationship pricing in the retail banking industry Gain insights into the business models adopted by retail banks to offer relationship pricing to consumers Gain insight into various trends driving the growth of retail banks in offering relationship pricing Key Highlights Following the financial crisis, banks developed profitable growth through relationship pricing to derive greater value from their existing customers. In the constantly changing banking environment, a single price for all approaches is not suitable for targeting diverse customer segments, resulting in the establishment of customized pricing for specific customer groups. Following this, banks offers products and services with pricing based on a customers demography, product holding and volume of transactions. To remain competitive, banks aim to offer products at a price that take into account a customers willingness to pay. In this regard, banks assess a customers lifetime value which acts as a key driver for relationship-based pricing. Increasing competition and commoditization of services means banks have to undergo a 'virtual makeover' in offering products and services to customers. To distinguish their banking services from competitors and maintain long-term customer relationships, banks have adopted strategies such as price differentiation and a consumer-centric approach where prices and services are determined by customer requirements and purchasing behavior. Loyalty programs have emerged as a key marketing tool in the global retail banking industry. These programs offer reward points, rebates and cashback. Rewards are based on the size of purchases and the tenure of a customers relationship with the bank. The understanding of purchasing patterns enables financial institutions to identify and phase out ineffective pricing and reward programs. This strategy enables banks to properly segment and target customers. Advanced analytics also enable banks to analyze their product portfolios and develop pricing strategies based on current competition. 1 Executive Summary 2 Global Snapshot On Relationship Pricing 2020 Foresight: Relationship Pricing<br>
  3. 3. 2.1 Global Snapshot 2.2 Key Drivers 3 Relationship Pricing Models 3.1 Product Bundling Pricing 3.2 Time-based Pricing 3.3 Behavior-based Pricing 3.4 Personalized Relationship Pricing 3.5 Multidimensional Pricing 4 Current Pricing Trends And Challenges 4.1 Operations Trends 4.2 Technology Trends 4.3 Regulatory Trends 5 Relationship Pricing-based Loyalty Programs 5.1 Overview Of Relationship Pricing-based Loyalty Programs 5.2 Loyalty Programs Targeting Various Customer Segments 5.3 Case Examples 6 Implementation Strategies And Case Studies 6.1 Best Practices 6.1.1 Redefining Pricing With The Introduction Of Relationship Pricing 6.1.2 Partnerships And Collaborations To Offer Technologically Advanced Solutions 6.1.3 Using Analytics To Understand Consumer Behavior And Offer Personalized Solutions 6.1.4 Introduction Of Higher Margin Reward Programs To Improve Profitability 6.2 Case Studies 6.2.1 Citibanks Introduction Of Time-based Relationship Pricing With The Citi Prestige Card In Hong Kong 6.2.2 Standard Chartered Banks Behavior-based Pricing In The Uae 6.2.3 Axis Bank Signed Up Suntec For Relationship-based Pricing And Billing Solutions 6.2.4 Union First Markets Loyalty Program To Scale-up Business 6.2.5 Wells Fargo Implemented Relationship Pricing To Market Its Savings And Loans Products 6.2.6 Absa Banks Introduction Of Value Bundles 7 Appendix 7.1 Methodology 7.2 Contact Timetric 7.3 About Timetric 7.4 Timetrics Services 7.5 Disclaimer ResearchMoz(http://www.researchmoz.us/) is the one stop online destination to find and buy market research reports & Industry Analysis. We fulfill all your research needs spanning across industry verticals with our huge collection of market research reports. We provide our services to all sizes of organizations and across all industry verticals and markets. Our Research Coordinators have in-depth knowledge of reports as well as publishers and will assist you in making an informed decision by giving you unbiased and deep insights on which reports will satisfy your needs at the best price. 2020 Foresight: Relationship Pricing<br>
  4. 4. Contact: M/s Sheela, 90 State Street, Suite 700, Albany NY - 12207 United States Tel: +1-518-618-1030 USA - Canada Toll Free 866-997-4948 Email: sales@researchmoz.us Website: http://www.researchmoz.us/ 2020 Foresight: Relationship Pricing<br>

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