Optimize Pricing
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To optimize pricing, PriceTek applies an elasticity framework: |
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With PriceTek, we calibrate price elasticity curves using historical bank prices, rates and volume relationships. |
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Setting the right price
Setting deposit rates in corporate banking in a way that supports profitable growth is a constant challenge. Set rates too high and the bank sacrifices margin; set rates too low and customers take their balances elsewhere, depressing growth.
Capitalize on micro-market opportunities
Banks need to embrace a more nuanced deposit strategy that enables them to capitalize on pockets of opportunity within the overall customer base. With some segments, the goal is to improve balance formation at the lowest possible cost. In other cases, the goal is to improve account profitability with the lowest possible attrition.
Achieve maximum spread
Applying sophisticated pricing optimization technology allows banks to achieve maximum spread benefits with fewer resources by:
- Accelerating development and implementation of new strategies
- Decreasing the number of errors in setting rates
- Meeting and exceeding the needs of a complex marketplace and sophisticated consumers
A world-class pricing capability includes three foundational components:
1. Process Architecture including:
- Process model that incorporates end-to-end-view
- Process design driven by business and consumer requirements
- Comprehensive measurement system to continually optimize process performance
- Clear accountability for process outcomes
2. Technology including:
- Technology architecture that supports and enables the process model
- Integration across data capture, transaction, analytics, workflow and reporting
- Product manager workstation that supports holistic process — planning through monitoring
3. Organizational Structure, which:
- Supports and enables the process model
- Describes:
- Reporting structure
- Roles and responsibilities
- Performance measures
- Reward and recognition
