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Controlling Product / Branch Cannibalization Cost
Use Case

Controlling product cannibalization costs

Phil, VP Asset / Liability Management

The Finance and Treasury department measures and manages A&L risk, but their reporting is at a macro level which does not enable him to fully understand his portfolio dynamics. He suspects that more than a third of the CD balance growth from promotions is “old money” flowing from other products and is concerned about the profitability of this strategy when product substitution (cannibalization) is considered. He asks: how can I better manage my cost of funds?
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Problem

Phil’s analysis tools are designed to assess macro risks and do not provide the behavioral insights into Member behavior that he needs to provide useful and actionable information to his business partners in Marketing, Finance, Operations, and insightful analysis to the CEO and Board.

Solution

FlowTracker’s Product Intelligence analyses enable Phil to see money flows into and out of the institution separately from money flowing internally between accounts, products, and branches. With this information, he can quantify and take action to reduce product cannibalization’s effect on the cost of funds.

Outcome

Total benefit potential per billion in liabilities: 150 k / yr. Model your own Credit Union’s benefit realization opportunity using the FT Benefits Calculator.

Analysis of Portfolio Change as Money Flows

Controlling product cannibalization costs

FlowTracker Analytics = Patented Data Analysis + Business Intelligence

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