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Revenue Assurance – stop the leak!
Revenue Leakage has been a universal phenomenon, gnawing up the profit margins of transaction-based industries. However, service providers in transaction intense industries, such as Telecom, have always been at the vanguard of embracing the best practices and the most innovative technologies in pricing and billing operations.
Though the Banking industry people are particularly quick in acknowledging the glaring prevalence of revenue leakage, in most cases, they are not able to pin-point its source or quantity, or chart methodologies to ensure Revenue Assurance. They admit readily: “Revenue Leakage - the silent killer – is out of sight, but definitely not out of our minds.”
Industry experts too would readily agree that revenue leakage is indeed a glaring fact in the Banking industry, though bankers cannot identify and quantify leakages in their systems. Evidently, banks need help in identifying the sources/points of leakage, quantifying the volume of revenue loss and also in minimizing/avoiding revenue leakage. Establishing adequate control mechanisms and reporting facilities to predict or identify leakage points is another critical requirement at this juncture.
‘Revenue Leakage’ in banking refers to revenue loss due to various reasons such as incorrect pricing, operational inefficiencies, missing transactions, un-priced transactions, uncollected revenues, etc. The banks’ inability to realize revenue in cases, where services are not charged at all or are charged at a loss, also amounts to leakage in revenue. Revenue Leakage in this industry could happen at all or any of the stages of the ‘customer relationship cycle,’ including Prospecting, On-Boarding, Transaction Processing, Billing and Recovery, Monitoring and Service Closure.
No more papering on leaks – fix it!
Needless to mention, there is no one-step solution to fix revenue leakage! Regular revenue audits, system integration reviews, tracking of customer performance against their contracts and eradication of manual processes are some of the important steps in the right direction.
A Relationship-based Pricing and Centralized Billing solution can help banks plug several of the leakage loopholes. Implementing such a solution will help banks gain better control over price plans tailored for the customers, providing more options to BDMs/RMs to design innovative pricing plans. Appetizer benefits of such a system would include automation, real-time monitoring, data reconciliations, re-pricing / re-invoicing and suspense processing, to name a few.
In short, a Relationship-based Pricing and Centralized Billing solution empowers bankers to consolidate and streamline their pricing and billing operations for multiple products and services, capturing every dollar from revenue leakage that might occur in the process of their ‘customer relationship cycle’. It also enables a fresh perspective in price/value relationship with customers, helps design programs that build additional value in the banker’s offerings, rewards the value of customer relationships with loyalty-based offerings, and in effect, minimizes customer churn.
Like in the Telecom industry, Revenue Leakage is an acknowledged truth in Banking too. Pied-piping with the assortment of products and services banks provide using their legacy systems, Revenue Leakage comes along as one among the biggest threats to profitability. But that is just one side of the coin. Just flip, and you see Revenue Leakage as the biggest opportunity. Plugging it is important today; urgent tomorrow.
