The document discusses SAP's dynamic relationship pricing solutions for banking, which enhance customer value and profitability by enabling banks to adopt a customer-centric pricing strategy. Key benefits include improved flexibility in pricing configurations, management of invoicing and payments, and increased wallet share through relationship analysis and personalized services. Overall, these solutions aim to optimize pricing while reducing revenue cannibalization and enhancing customer satisfaction.

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
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2. Objectives Solution Benefits Quick Facts
Creating customer value
Creating 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. Objectives Solution Benefits Quick Facts
Taking a customer-centric approach
to pricing
Taking 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 for
cannibalization and incorporate many elements in your pric- your products and services across multiple
ing decisions. These elements include the geographies. Armed with rules engines and
Gaining a view of customer value overall value a customer brings to the bank, tools for modeling customer demand, you can
across 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.
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4. Objectives Solution Benefits Quick Facts
Increasing agility while reducing
cannibalization
Taking a customer-centric approach SAP Billing and Revenue Innovation Manage- •• Realize holistic strategies – Balance
to 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, while
Increasing agility while reducing The software can help you: quantifying the impact of price changes
cannibalization •• 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.
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5. Objectives Solution Benefits Quick Facts
Gaining a view of customer value
across business lines
Taking a customer-centric approach Decision-support tools provided by SAP An event-processing engine lets you connect
to 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 lines
cannibalization 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, and
across 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.
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6. Objectives Solution Benefits Quick Facts
Automatic payroll
Taking a customer-centric approach
deposit or transfer
to pricing Minimum average Linked to a parent’s
balance of US$250 accounts*
Increasing agility while reducing
cannibalization
Gaining a view of customer value
across 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. Objectives Solution Benefits Quick Facts
Enhancing customer value and
profitability
Enhancing customer value and Dynamic relationship pricing solutions pro- Directing price-conscious customers to
profitability 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.
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8. www.sap.com 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 www.sap.com/lines-of-business
/sales/next-generation-billing/index.epx.
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