Research & Thoughts

Swimming upstream: Growing wholesale banking revenue in 2013

The second in Capco’s Business Economic White Paper Series - Opportunities in pricing and billing optimization

Encouraged to find their businesses having fared the recent crisis far better — and more intact—than their retail banking counterparts, wholesale banking (i.e., commercial bankers, treasury services providers and wealth managers) is emerging from the tempest only to discover a “perfect storm” of internal performance pressures and external market threats creating an environment in which their most daunting challenges likely still lie ahead.

While wholesale banking may have emerged from the financial crisis in better shape than the retail banking sector, its most daunting challenges are likely still ahead. Multiline commercial banks and bank holding companies are hoping that the commercial sector, treasury services and wealth management can deliver immediate profitability and growth as macro interest rates hover near zero, consumer borrowing remains weak, and margin pressures intensify with the maturing of higher-yielding consumer debt.

To capture profitable wholesale banking opportunities, institutions will need to know better than ever what products and services customers want and at what price, and then quickly bring them to market. This Capco white paper explores how banks can benefit from three initiatives to improve the pace and nature of revenue growth:

  • Create an enterprise-wide product catalog
  • Define strategic pricing principles and deploy enabling pricing technology
  • Enhance and upgrade invoicing and billing systems

Deploying these capabilities can bring significant benefits to a bank including elimination of revenue-draining billing errors, improvement in customer relationships, and the ability to offer tailored, exception-based pricing.