Relationship Profitability / Loan and Deposit Pricing
In today's hyper-competitive banking environment, knowing which relationships, products, customer segments and relationship officers within your bank are profitable is imperative. BIGProfit is a solution that will help your bank measure profitability on both a relationship and account basis. Using the information gathered, you will have the ability to develop strategies to increase profitability, bolster strengths and combat any weaknesses.
BIGProfit provides lenders and other bank staff with a powerful tool that can be used to evaluate the profitability of an existing customer or a new prospect. BIGProfit incorporates Probability of Default (PD) and Loss Given Default (LGD) to determine the risk-adjusted return on capital (RAROC) for each of your customers. Using these common drivers in measuring profitability throughout the bank helps your management and staff understand where opportunity lies and where there is more work to be done.
Banks know that most of their profitability comes from a relatively small number of customers — the graph above illustrates a typical bank's customer contribution to overall profitability of the bank. As seen, 10% of customers often contribute most of a bank's profitability, while the next 10% contribute a little and the remainder are either neutral or subtract from the bank's overall profitability.
BIGProfit is an outsourced profitability solution designed to deliver you results. In addition to working with a powerful pricing model, you receive full-time support and access to our consulting team.
To help customize the tool for your bank's specific needs, we offer two service levels:
Whether you decide to purchase the Pro level or the Premium service, BIGProfit is a completely web-based solution. Since you don't have to install any software, you can get started with this powerful tool right away.