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Ba
Banking
Service
Areas
Offering
Loan Pricing
Bottom-line success and growth are dependent on calculated risk taking and effective use of capital. Our approaches link risk appetite and final price to each other for both cash and non-cash loans. We design layered pricing structures for general purpose loans of individuals, SME cash loans, corporate & commercial banking cash loans, letter of guarantees and letter of credits based on specific needs of our clients. For certain parts of pricing layers, we utilize our machine learning capabilities to produce results with much higher impact. Also for a complete solution we design the processes and governance mechanisms befitting our clients' needs.
Strategy Consulting
Machine Learning & AI Teams
Deposit Pricing
Challenges in deposit pricing have always been the same - such as which groups of customers should be targeted, how should base prices for these groups be differentiated, how should the moment of truth be managed in order not to diverge too far from these base prices, how farthest should the actual price diverge from base price and how transparent should the prices be. We answer all these questions starting with a top-down deposit strategy and use various data driven approaches and machine learning capabilities to collect just the right amount of deposit at the minimum possible blended price.
Strategy Consulting
Machine Learning & AI Teams
Fee Businesses Pricing
Most banks set list prices for their fee businesses through benchmarking with competition. Then special rates are formulated for key accounts and high value customers. Although this pricing process can be considered as an industry standard, it is very suspectable to leakages and even small improvements can create big impacts. We help our clients setup end-to-end fee business pricing structures that minimize leakages and develop fee package products to manage the overall process easier and to gain competitive edge.
Strategy Consulting
FX Pricing
Offering different price levels to different customers is the basis of all pricing practices in banking. FX pricing, in our opinion, has been one of the less automated areas with heavy manual interventions. We start with formulating strategies for bid-ask spreads for different market conditions and develop different price segments for different customer groups and transaction sizes with differentiating approaches for individual and business banking customers. We utilise machine learning methodologies and design the engine required to process the pricing at different channels.
Strategy Consulting
Machine Learning & AI Teams
Relationship and Basket Pricing
Especially for business banking, beside stand-alone pricing engines and rulesets of products, another layer of pricing is typically needed to capture the full potential of moments of truths, in which multiple products are sold or commitments are taken. Products in consideration may range from standard business loans to salary payments, to even direct debit system supplier agreements. Banks generally struggle to find the right basket price due to different profitability targets of products usually managed by different teams or even by different business units. Our approach prioritizes bank level view of deal and customer profitability to produce competitive yet profitable offerings. Our engagements produce implementation ready results covering engine, process and governance dimensions.
Strategy Consulting
Fund Transfer Pricing (FTP)
As bank size grows, more sophisticated mechanisms are required to execute the internal transfer of funds between business units and treasury. We develop base FTP schemes including market rate estimations, repricing and liquidity premiums, etc. using analytical approaches. We customise this base methodology based on bank's context with multiple pools, use of cost of capital and override mechanisms, etc. We formulate the calculation methodologies at product, customer, business unit levels and help our clients to implement the mechanism to their accounting systems for daily use.
Strategy Consulting
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