Banking View

Yeah, a lot easier said than done!  But, it is a true statement.  Of course there are many challenges facing the Retail Banking space right now – and it doesn’t look like a whole lot of immediate relief is on its way.  But the key to success is turning those challenges into opportunities and become a more profitable and efficient bank.

With the interest rate environment and regulatory changes as they are, banks have to re-think their non-interest revenue strategies.  A recent article  in the Wall Street Journal titled “Free Checking Costs More” clearly points out that banks all around the country are searching for ways to generate more non-interest revenue from their customers.  Minimum balance requirements are way up – by 23% – over last year.  At the same time, the monthly service charge for a DDA is up 25% over the same period of time.

So, I guess we see one way to combat the loss of revenue from the Durbin Amendment and the rate environment.  However, I am seeing a different trend that is taking root in banks throughout the country: providing customers with a “package” of products that they are happy to pay for.  We can draw comparisons to your monthly satellite or cable bill if I want to add premium channels I know how much extra it is on top of my bill. Banks are discovering that their customers are indeed willing to pay for a bundle, these packaged solutions can help drive behaviors as well – like more debit card usage and fewer checks written.

The key to this is having a flexible system that allows the bank to rapidly create new products and launch them quickly into the market.  Additionally, having a pricing engine that allows the bank to price me as a household is important.

At the SAP Financial Services Forum in NYC, hear what we have to say, talk to your peers and hear from analysts –  and learn how they are succeeding with SAP solutions and learn how SAP and our partners can help you turn those challenges into real opportunities.

 

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