Data Management
Technical Support
Data Consultancy
Software FactoryCustomer Relationship Pricing
What Is CRP
Customer profitability analyses allow banks to improve the cooperation between marketing, controlling and sales departments. These improvements are used to get more customers and better customer relationship management.
Analyze performance at the account level, and at the entire customer level with a 360-degree view, including measures evaluating net interest margin, ROA, ROE and anticipated lifetime net income.
Price loans with consideration of capital, loan risk and cost assumptions to determine the best risk-adjusted return for your institution and the best price for your customer.
Manage deposit pricing and fee waivers to increase your competitive advantage.
User-friendly, proprietary platform, web-based solution that gives you an easy-to-use tool for evaluating the profitability of customers and understanding the value of each relationship.
Key Features
Online Profitability Calculation
The tool enables instant, real-time profitability calculations for the full range of products that a customer holds (e.g., savings accounts, loans, credit cards, mortgages, investment products, etc.).
Bundle Product Calculation
If a customer is using multiple products the system can calculate profitability for the entire bundle, helping the bank evaluate the overall customer relationship.
Profitability Per Product
The system breaks down profitability by individual products, showing which ones are more profitable and which are less.
Customer Profiling
The CRP system can incorporate customer data such as income, spending habits, account usage, credit score, etc., to better understand the profitability of each individual.
Scenario Analysis
The calculator allows banks to run various "what-if" scenarios
Dynamic Pricing Adjustment
With real-time calculations, banks can adjust their pricing for specific customers or products based on their actual profitability.
User-friendly Interface
A simple, easy-to-use interface allows relationship managers or other bank staff to input customer data and see instant results without requiring specialized financial knowledge.
Cross-selling & Up-selling Opportunities
By analyzing profitability, the tool can also recommend opportunities for cross-selling or up-selling based on customer preferences and profitability data.
RAROC
Integrating RAROC calculation into a Customer Relationship Pricing
Benefits
Informed Decision-Making
Banks can make data-driven decisions on whether to approve exceptions for a customer, offer discounts, or modify product offerings, all based on detailed profitability analysis.
Supports Strategic Planning
Helps the bank assess the impact of different pricing and service strategies, allowing for better long-term planning and forecasting.
Improved Customer Retention
Banks can use the profitability data to offer more targeted retention strategies for profitable customers.
Optimize Profitability
Helps the bank optimize the profitability of each customer relationship by identifying unprofitable or less profitable segments.
Tailored Customer Experiences
By understanding the profitability of a customer’s overall relationship with the bank, banks can offer more personalized services or rewards.
Boosts Cross-Selling & Bundled Offers
Banks can use the data to identify opportunities for bundling products that will maximize profitability for both the customer and the bank.
Real-time Insights
With an online system, bank staff can quickly calculate profitability for customers at any given point, helping them to be agile and responsive in offering products and services.
Flexibility for Exceptional Cases
The solution allows banks to analyze the financial impact of offering exceptions, such as waived fees, lower interest rates, or discounts, making it easier to decide if such offers will still be profitable for the bank.
RAROC
RAROC (Risk-Adjusted Return on Capital) solution is designed to provide financial institutions with the necessary tools to assess and manage the profitability of their investments, loans, and financial products while accounting for risk.
By integrating key financial metrics such as Credit Conversion Factor (CCF), Exposure at Default (EAD), and Expected Losses, this solution allows businesses to evaluate risk-adjusted returns, optimize capital allocation, and ensure profitability in line with their risk profiles.