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Dynamic Relationship Charging for Retail Banking


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The SAP Billing and Revenu Innovation Management solution helps financial organizations create value from their customers.

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Dynamic Relationship Charging for Retail Banking

  1. 1. SAP Solution Brief SAP for Banking Objectives Solution Benefits Quick Facts SAP Billing and Revenue Innovation Management Dynamic Relationship Pricing Increases Wallet Share of Retail Banking Customers©2012 SAP AG. All rights reserved.
  2. 2. Objectives Solution Benefits Quick Facts Creating customer valueCreating customer value Bottom-line financial performance, interest rate margin performance, and margin pressures are all vital areas of focus for your bank today. An increasingly important driver for both profitability and revenue is pricing differentiation. Successful financial organizations have incorporated dynamic relationship pricing into their strategic planning. As retail banks look for ways to improve and scalable portfolio pricing solution that earnings, customers have become an ever- offers flexible analysis and intuitive configura- greater part of their business strategies. tion of your pricing rules. Dynamic relation- Changes in distribution channels, technolo- ship pricing support offered by the SAP® gy, and customer demands thus require Billing and Revenue Innovation Management customer-centric business solutions. With solutions helps your bank analyze overall pricing differentiation key to profitability, profitability to increase wallet share. A variety dynamic relationship pricing offers an im- of functionalities provided by the solutions portant path to customer centricity. can help your bank eliminate line-of-business silos, understand price sensitivities, and re- To enhance efficiency and differentiate on ward customer loyalty with pricing incentives price, you need an automated, adaptable, and discounts. 2  /  8 ©2012 SAP AG. All rights reserved.
  3. 3. Objectives Solution Benefits Quick Facts Taking a customer-centric approach to pricingTaking a customer-centric approach Dynamic relationship pricing takes into ac- Functionality for price optimization and exe-to pricing count the overall profitability for various cution in SAP Billing and Revenue Innovation products, services, and channels across all Management solutions helps you simultane-Increasing agility while reducing your lines of business. You evaluate, monitor, ously optimize rates, fees, and rewards forcannibalization and incorporate many elements in your pric- your products and services across multiple ing decisions. These elements include the geographies. Armed with rules engines andGaining a view of customer value overall value a customer brings to the bank, tools for modeling customer demand, you canacross business lines the relationship that customer has with the better understand customer buying behaviors bank, and the possibility of building on the and price products to maximize customer existing service level. You can add support satisfaction and profits. Integration with SAP for dynamic relationship pricing to existing Real-Time Offer Management software can core banking applications without dis- incorporate relationship analysis into your rupting your business. real-time offer management process. Management of invoicing and payments across billing platforms gives customers itemized statements of account activity across business lines. 3 / 8 ©2012 SAP AG. All rights reserved.
  4. 4. Objectives Solution Benefits Quick Facts Increasing agility while reducing cannibalizationTaking a customer-centric approach SAP Billing and Revenue Innovation Manage- •• Realize holistic strategies – Balanceto pricing ment solutions help you use dynamic rela- deposit and loan strategies across both tionship pricing to meet your business goals. established and growth markets, whileIncreasing agility while reducing The software can help you: quantifying the impact of price changescannibalization •• Achieve customer centricity – Use the and random exception pricing on your software to price products based on entire portfolio.Gaining a view of customer value overall customer value, relationship with •• Increase agility – Use the software to inter-across business lines your bank, or household relationships pret and react quickly to ongoing competi- using strategies such as product bundling, tive and margin pressures, and increase discounts, cash back, and customer- time to market for new offers and products. loyalty rewards. •• Reduce cannibalization – Understand •• Understand customer behavior and how product specials or promotional seg- demand – Take customer price sensitivity mentation may cannibalize sales due into account to maximize profits. to substitution effects. By offering your customers greater value, you communicate that your bank cares about them. 4 / 8 ©2012 SAP AG. All rights reserved.
  5. 5. Objectives Solution Benefits Quick Facts Gaining a view of customer value across business linesTaking a customer-centric approach Decision-support tools provided by SAP An event-processing engine lets you connectto pricing Billing and Revenue Innovation Management real-time, high-volume, and low-latency appli- enable a holistic portfolio view for evaluating cations with relationship pricing. The soft-Increasing agility while reducing the impact of prices, fees, competitive offers, ware collects chargeable events across linescannibalization and macroeconomic influences. Adaptable of business and feeds them into the pricing and scalable, the software provides analysis, and invoicing process.Gaining a view of customer value intuitive-to-configure pricing rules, andacross business lines powerful automation. Functions for “householding” help ensure that customers who are related to each other Instead of pricing customer segments or receive the same offers. Functions for distrib- products separately, you can automatically uting partner revenue help you create profit- create pricing strategies for an entire deposit able connections with business partners, or loan portfolio. (See the figure on the next such as insurance firms. page for an example of a “free” checking account offer.) You can run what-if scenarios and test pricing strategies by simultaneously optimizing multiple variables – such as interest rates, fees, and margins – for all product combinations and customer seg- ments in the portfolio. 5   /  8 ©2012 SAP AG. All rights reserved.
  6. 6. Objectives Solution Benefits Quick Facts Automatic payrollTaking a customer-centric approach deposit or transferto pricing Minimum average Linked to a parent’s balance of US$250 accounts*Increasing agility while reducingcannibalizationGaining a view of customer valueacross business lines Waiver of fees Insurance if Optional credit services used* cards* *Minimum balance or profitability Accounts with other requirements need to be reached lines of business* in each or a combination of all Figure: Example of a “free” checking account offer 6   /  8 ©2012 SAP AG. All rights reserved.
  7. 7. Objectives Solution Benefits Quick Facts Enhancing customer value and profitabilityEnhancing customer value and Dynamic relationship pricing solutions pro- Directing price-conscious customers toprofitability vided by SAP Billing and Revenue Innova- use the more convenient (and usually more tion Management help you improve existing cost-effective) self-service channels can relationships with customers and create help reduce attrition. And you can promote new ones. You can reward long-standing additional products for these customers via and profitable customers with new product their respective channels. You can also offer bundles, discount offers, cash-back loyalty customers who are less price sensitive the points, and other services at lower entry personalized products and services that prices. You can offer truly customized ser- many expect. vices based on customer preferences, channels, transactions, and the time and date of the service requested. By expanding overall wallet share, innovative solutions from SAP can help you transform unprofitable customers into profitable ones. 7 / 8 ©2012 SAP AG. All rights reserved.
  8. 8. Objectives Solution Benefits Quick Facts Summary Solution Dynamic relationship pricing with SAP® •• Configuration of fees for any product, Billing and Revenue Innovation Management service, or asset type solutions rewards customer profitability •• Relationship analysis for all members of across business lines and distribution chan- a household nels. By taking a holistic portfolio view and •• Intuitive integration with core banking understanding household relationships, applications you can propose personalized, value- •• Management of invoicing and payments added services that enhance profitability across billing platforms and loyalty. Benefits Objectives •• Flexible and dynamic pricing of products •• Use flexible configuration tools to gain to maximize profit margins and remain a pricing edge in the market competitive •• Prevent cannibalization of revenue from •• Increased share of customer wallet by substitution effects rewarding loyalty •• Adopt a customer-centric approach •• ncreased customer satisfaction I to pricing and relationships to reduce •• New partner relationships attrition •• Reduced revenue leakage •• Support ever-increasing volumes of transactional events Learn more Visit us at /sales/next-generation-billing/index.epx. 8 / 8 CMP22297 (12/11) ©2012 SAP AG. All rights reserved.
  9. 9. © 2012 SAP AG. All rights reserved.No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG.The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.National product specifications may vary.These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, withoutrepresentation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials.The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanyingsuch products and services, if any. Nothing herein should be construed as constituting an additional warranty.SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks ofSAP AG in Germany and other countries.Please see for additional trademark information and notices.