In his presentation to Sibos 2014 delegates in Boston on September 29, 2014, John Kohari, CEO – Americas at Zafin, discussed how the Product and Pricing Lifecycle Management (PPLM) approach to augmenting existing systems delivers sustainable revenue generation for financial institutions.

1. Using Technology To
Drive Earnings Growth
John Kohari, CEO – Americas, Zafin
Sibos 2014, Boston | September 29, 2014

2. Banks Under Pressure
Regulations
Macro Environment
Diminished contribution
from credit & lending
Bankers need Solutions
25-30%
of discretionary IT spending
Bottom line
! Focus on fee-based
revenue and customer
innovation
! Banks’ understand
they need to innovate
to build deeper,
profitable
relationships…
! … but are constrained
by funding &
resourcing limitations
“Our focus is to make our technology
environment more robust, trying to reduce the
number of applications we’re using, while at
the same time making our data consistent
across the organization.
Source: Managing complexity and change in a new landscape, Global survey
on asset management investment operations, E&Y Report, 2014
“The products and services the wealthy are
seeking today are far different from those of
the past. Clients are demanding best of breed
products with fee structures they can readily
understand and evaluate on their own.
Source: 2013 Private Banking and Wealth Management Survey, PwC
Dodd-Frank Basel III
RDR AIFMD FATCA
Below 0.5%
Overnight rate, for +5 years

3. Questions Arise
How do we sell
more products to
current clients?
How do we create
a single view
of the client?
How do we address
revenue leakage?
How do we deliver
innovation faster
and at lower risk?

4. Augment, Don’t Replace

5. Technology Drives Earnings Across The Client Lifecycle
Acquire Fulfill Grow Change
Modern technology
enables rapid
product development
Price the entire
relationship uniquely
for each client
Cross-sell the
entire bank’s
portfolio
Monitor and
enforce client
obligations

6. Product and Pricing Lifecycle Management
PPLM is a best-practice approach supporting the
complete, ‘start-to-finish’ process of bringing
products and services to market quickly and
easily across the entire client relationship.
PPLM = Deeper relationships, increased revenue and
enhanced margins

7. Operational Expense of Pricing Changes
• Heavy technology involvement
• Multiple systems and extensive regression testing
• Limits business agility to respond to market forces quickly
miRevenue
• Allow business users to modify pricing
• Respond to market changes quickly
• Foundation for pricing governance and product innovation
Business Case
• Redeploy funding and resources devoted to pricing changes
• Reduce risk inherit with modifications to core system
• $1 M+ in most banks to conduct annual pricing
• Recognize revenue quicker with quicker time-to-market
Pricing
governance
layer
Product
system 1
Product
system 2
Product
system 3
Create a single point
of pricing truth
Case 1: Ongoing Pricing Changes

8. Pricing Tailored to Client Needs and Business Value
• Pricing exceptions are needed to win the business
• Results in a fragmented billing process
• Contract obligations are often not enforced
miRevenue
• Individualized pricing for any product or account
• 100% automated to ensure all fees are collected
• Billing clarity for an improved client experience
Business Case
• Capture revenue that is lost due to suboptimal processes
• Eliminate manual processes
• Improve customer experience with clear billing
• Achieve revenue lift without introducing new products
or manual processes
Standard price:
Sweep account
Exception
price
Relationship/
volume price
One-off refund
or waiver
Create different pricing models
to tailor price to value
Case 2: Exception Pricing

9. Refunds and Waivers
• Compensate for inadequate pricing or billing capabilities
• Refund management is often left unattended
• Short-term waivers often require manual changes to remove
miRevenue
• Enforce refund policies: Apply refunds/waivers appropriately
• Track and report on refunds by product, group, or individual
• Define waivers and set expiration dates
Business Case
• Capture revenue that is lost due to sub-optimal processes
• Control the issuance of refunds to ensure profitability
• Waivers can be a strategic incentive without losing revenue
Exception
price
One-off refund
or waiver
Relationship/
volume price
Conditions: Maker/checker
approval granted within
pricing variance
Conditions: Account or
product fee reversed for x
periods or until date for
example
Conditions: Price is granted
as long as condition y is
true (e.g. volume or fee
basis)
Case 3: Revenue Leakage

10. Summary: The Earnings Growth Equation
Pricing
innovation
Pricing
governance
Earnings
growth
+ =
Tailored
products
+
Onboarding
orchestration
+

11. John Kohari
CEO – Americas
john.kohari@zafin.com
www.zafin.com/journal