NEW YORK–In order to remain relevant and drive revenue in 2019 and beyond, financial institutions must use consumer-centric pricing strategies, according to a
new Accenture/Nomis survey of retail banks of varying size.
“This strategy allows banks to make dynamic, real-time pricing decisions tailored to customers’ needs and preferences; customer activity is captured across channels and analytics are used to maximize customers’ lifetime value across all product lines,” according to Accenture.
The Survey Findings
Among the survey’s findings:
- Slightly more than 40% of bankers said they plan to compete on price to gain market share over the next three years
- “Yet, a lack of coherent strategy across different lines of business is the top obstacle to implementing a customer-centric pricing (CCP) strategy – 30% of banks’ lines of business have no such strategy,” Accenture said
- Banks that don’t make CCP a priority require pricing exceptions for over 50% of deals, compared with less than 40% for banks that prioritize CCP
- Banks with the highest average annual revenue/profit margin growth are more mature in their pricing strategies – 36% of high performers plan to deploy a pricing structure that crosses lines of business (vs 19% of low performers)
- The key to understanding a customer’s price sensitivity and making offers based on individual needs is analyzing real-time data about the customer’s life stage and banking relationship – everything from pricing history to intelligence on why customers decline offers
- 75% of bankers agree effective use of data / analytics is critical to competitive pricing
- 57% say pricing will become more dynamic, customized and flexible than it is today
- Half of high performing banks deploy pricing technology across the organization vs. 37% of low performers