Why Relationship-based Pricing (RBP)?
Today, most existing back-office systems of Financial Institutions (FIs) are part of a 'silo-based' IT infrastructure that mirrors the FIs as product-centric organizations. Pricing disciplines in FIs are fairly primitive and largely built around their products. Almost all products installed in a FI's IT infrastructure are self-contained with built-in pricing and billing functions. Apart from this, FIs also face stiff competition from traditional and non-traditional players, high cost of capital and declining net interest margins.
Relationship-based Pricing helps FIs to reinforce and leverage their relationships with the customers to achieve true customer-centricity. With this, the FIs can create innovative value-added services that help them to break away from the pack and attain market dominance.
RBP helps FIs to cut through the product silos and enable centralized pricing. New product bundles and prices can be easily configured and deployed and thus, cross-selling becomes easier. The key features of RBP are pricing freedom and flexibility. It facilitates innovative approaches to manage customer relationships and improve profitability. It enables FIs to reward clients for their loyalty through specific pricing and rewards programs. RBP is an automation framework that empowers FIs to streamline their operations and avoid revenue leakage. It provides FIs the ability to price based on the entire relationship, enable tiered pricing and cross-product pricing, and offer product and service bundling to customers.
What are your benefits?
- Improved time to market new offerings
- Increased level of automation
- Minimized maintenance and set-up time for customers, accounts
- Better control over pricing and exceptions
- Reduced revenue leakage
- Improved customer communications
Siloed banking infrastructure Vs RBP:
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