Emerging new channels of delivery don't necessarily mean new profits.
A collaborative, rather than silo-oriented, organization from back shop to front line along with realistic relationship pricing and bundled products is a key to dealing with the regulatory and competitive challenges buffeting today's financial institution, according to a session Tuesday at the BAI Retail Delivery conference in Las Vegas.
The session was presented by Daniel Tuccillo, senior vice president of retail pricing and portfolio management of PNC Bank in Pittsburgh, Pa., and Bill Handel, vice president of research and product development at CRM and market research specialists Raddon Financial Group in Lombard, Ill.
They said the pricing and bundling concept is not new but the drivers, challenges and risks are, and that effectively dealing with it will involve seamless integration inside and a hard look at what's really "free" outside.
"Remember when ATMs came along? We thought they'd replace the branch. That didn't happen. Every new channel adds costs," Handel said.
Understanding that consumers are driven by price as much as brand loyalty, and how much each service, and consumer, costs in granular detail will be more crucial going forward, and tools to analyze relationships and produce and price accordingly is essential, Tuccillo said.
"You really have to understand the value each customer brings, what the value calculus is, and you have to make sure you have the technology there to do that from day one. You're at a huge disadvantage without it," the PNC pricing executive said. "I know that from personal experience."