Yeah, a lot easier said than done! But, it is a true statement.
ere 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.