Clareti Banking
Transaction Processing: Customer Profitablity Measurement
Solutions
A financial institution needs access to information about a customer's transaction volume, fees paid, interest earned and paid. A bank, for example, may be interested in knowing how much revenue and/or profit is being generated by a specific customer.
An organisation might seek to answer these questions:
Who are my best customers in terms of contribution, direct profit, and ROI-based customer performance measures? Who are my worst customers?e
What are the scores of my customers based on a customer scoring model? How do the customers rank in terms of their scores?
Who are the high performing customers? Who are poor performing customers?
What is the contribution, direct profit, and ROI of a specific customer or customer group?
What specific costs are causing a particular customer to be profitable or unprofitable?
Which products are profitable and which are not?
From here, it is a short step to designing delivery strategies that maximize profitability on a customer by customer basis. Each customer segment can be addressed in ways that will ensure its contribution to the bottom line is maximized.
This information may also be used to assist in the design of Human Resource policies for example, the setting of revenue targets and the management of performance based on achievement of those targets.
At the heart of the system is a database that tracks transactions daily on an account-by-account basis.
The system tracks the:
Year that the statistics are tracked for
Count of the transaction YTD, previous month and current month
Value of the transactions YTD, previous month and current month
Value of the transactions YTD, previous month and current month in the base currency
Cost of the transactions YTD, previous month and current month in the base currency
From here, it is a short step to calculating the contribution each individual, customer segment, product or operating unit made to the overall organization and this data can then be used in a wide variety of ways.
Transaction Processing
