Capco Institute Blog

While wholesale banking may have emerged from the financial crisis in better shape than the retail banking sector, its most daunting challenges are likely still ahead. Multiline commercial banks and bank holding companies are hoping that the commercial sector, treasury services and wealth management can deliver immediate profitability and growth as macro interest rates hover near zero, consumer borrowing remains weak, and margin pressures intensify with the maturing of higher-yielding consumer debt.

To capture profitable wholesale banking opportunities, institutions will need to know better than ever what products and services customers want and at what price, and then quickly bring them to market. Banks can improve returns, provide high value to clients, and facilitate growth and market share gains through three initiatives:

• Create an enterprisewide product catalog. The product catalog serves as a global, single-source repository of all bank offerings across lines of business and product verticals, including advisory, discretionary brokerage, securities, structured products and foreign exchange.
• Define strategic pricing principles and deploy enabling pricing technology. Constructing a product catalog inherently allows for enhanced transparency into actual on-the-ground pricing activities. Together, the product catalog and pricing engine allow a bank to model a customer’s economic profile and potential profitability under various pricing and relationship-bundling scenarios.
• Enhance and upgrade invoicing and billing systems. With a pricing engine and product catalog in place, a proper invoicing system simply reacts to the customer-specific pricing scheme as documented, coded, approved and governed, automatically generating complete invoices as directed by the product and pricing schemes.

Taking these steps can help banks design, bundle, price, sell, bill for and manage a complex array of highly targeted and differentiated products and services. By deploying these capabilities, banks are in a better position to eliminate revenue-draining billing errors, improve customer relationships, and offer tailored, exception-based pricing.

What initiatives are you implementing to help your bank offer targeted and differentiated products and services to customers? Join the discussion.