Let’s face it. For many banks, the status quo is no longer an option.
For many banks, traditional revenue sources are under pressure. For years, banks have lived off the margin between the rate at which they borrow money from central banks and the rate at which they lend money to clients. However, the current low interest rate environment renders this margin unsustainable as a source of long-term revenue, so banks are turning to a fee-based business model.
Amidst a backdrop of increasing competition, commoditized product offerings and stringent regulatory pressure around data transparency, banks quickly realize that they need to do more with less and find new ways to generate revenue from, and deliver value to, the clients they already have. Whether it’s selling more products to current customers, driving customers to adopt lower-cost channels or bringing products to market faster, there is one common denominator – relationship value. Banks must return to the basics by taking a holistic approach to the client relationship and simplifying the client experience.
But how do banks take a holistic, customer-centric approach while dealing with a combination of legacy systems, siloed operations and products that are more complex than ever?
Product and Pricing Lifecycle Management, or PPLM, is a methodology for the managed evolution of relationship based pricing. By shifting from a product-centric to a customer-centric approach, PPLM is transforming the way banks manage products, pricing, loyalty and billing.
Think of PPLM as a technological framework, bringing together a bank’s systems, people and processes around the customer relationship. It’s a holistic approach to creating, simulating, offering and managing products, communicating with customers and incentivizing customer behaviour. With PPLM, banks offer the right products to the right customer through the right channel at the right time and at the right price, ensuring a reliable, sustainable source of revenue enhancement.
Banks use PPLM to manage products and pricing effectively:
- Based on the entire value of a customer’s relationship with the bank
- To create sustainable revenue enhancement
- Across geographies
- Across business units and lines of business, from retail and corporate banking to wealth management and beyond.
- Across an omnichannel environment
- With a focus on driving customer loyalty
Get more from the core
As a viable alternative to a core banking system replacement, Product and Pricing Lifecycle Management makes a customer-centric approach possible within a bank’s current operations. By serving as a middleware layer between back-office systems and customer-facing channels, PPLM is a product management control panel, integrating seamlessly with core systems, product systems, customer relationship management systems, transaction systems and other legacy systems – just about any data feed a bank may have in operation.
Product and Pricing Lifecycle Management is comprised of six separate functions, each of which can be deployed independently or work in concert with others. From creating, bundling and simulating innovative products and loyalty programs to relationship based pricing, contract management and onboarding through to billing and reporting, PPLM is your complete, end-to-end product management framework.
PPLM: Key benefits
PPLM seamlessly integrates data, existing systems, business rules, products and offers, so banks can:
- Create revenue enhancement by plugging sources of revenue leakage, and driving net new revenues through product absorption and customer acquisition
- Increase wallet share with additional upsell/cross-sell capabilities
- Launch new products or changes to existing products in a matter of days or weeks, as opposed to several months
- Better serve their customers by improving the overall customer experience
- Compete in the marketplace with a value-added product and loyalty strategy
Relationship based pricing and customer centricity are the new standard operating procedures in financial services, and PPLM is the most advanced way to manage products and pricing. Can you afford to be left behind?
Interested in learning more about PPLM? Check out the latest trends and emerging best practices in our quarterly thought leadership publication, Relationship Banker: Journal of Product and Pricing Lifecycle Management. Subscribe today!
For more information on how Zafin can help foster happy, profitable customer relationships with complete Product and Pricing Lifecycle Management, please contact us at firstname.lastname@example.org.