Felix, Vice President Deposits, at an $38bn Regional Bank.
Felix needs to meet volume and revenue targets across all the Deposit and Investment products offered by the bank. His team has modeled price elasticity of demand on a product by product basis but he is concerned that optimizing product pricing may not produce the best results for the portfolio overall due to product substitution effects.
Felix knows product substitution can be as much as 35% of account level growth, but his systems don’t enable him to measure the cross-product flows accurately at the customer and account level, which is the key data he needs to include cross-elasticity in his portfolio pricing optimization program.
|Problem:||Price Optimization algorithms produce compromised results unless cross-product flows of funds are measured and modeled separately from other flows. Felix needs this holistic portfolio demand view to optimize across the portfolio as a whole.|
|Solution:||FlowTracker produces customer behavior events that measure the volume of funds flowing between accounts (therefore products) separately from money flows to/from the bank. FlowTracker events, coupled with rate data enable cross-elasticity of demand to be included in PO models.|
|Outcome:||By including cross-product flows in his PO models, Felix can now optimize across the entire product line with confidence. In addition, FlowTracker enables Felix to include post-pricing flow analysis to enable continuous improvement of the Price Optimization program.|