At AQRISK our key focus is to provide fintech solutions that make it much easier for banks to optimize their core banking business and become more efficient and profitable. Pricing functionality is a key component in succeeding in this.
The AQBANKING Solution Suite includes the AQOPTIMIZER solution, which incorporates all the functionality needed to perform optimized pricing and beyond.
By “pricing”, in the core banking business, we mean the process of setting interest rates and fees on banking products and services.
AQOPTIMIZER is our solution to support banks in making it much easier to optimize their core banking business via stronger use of data, analytics, and modern technology. The solution supports banking optimization that goes far beyond customer assessments and pricing and includes features like:
The figure below gives an overview of the features in the AQOPTIMIZER solution.
In this text, we only focus on the customer assessments and pricing by client-facing employees - indicated by the green section of the figure.
We developed the solution based on many years experience from working with banking optimization and the realization that Management and advisors, in general, are quite poorly supported system-wise in assessing, pricing and optimizing customers.
We have experienced an overwhelming positive feed-back from users, which supports our belief that improvements are required and highly value-creating.
Getting started
A key focus at AQRISK is to assure that implementing our solutions is a fast and low-impact process, that does not put heavy strains on the organization.
Implementing the AQOPTIMIZER solution takes effectively about 30 days and typically involves three resources, before introducing it to a broader audience in the organization.
A focused implementation process, from signing contract to being live with advisors, can - in calendar time - be completed in about 10 weeks. One of the reasons why the implementation speed is so high, is that the solution can run as an add-on to any core banking platform and does not require system integration or changes to existing platforms. The bank simply populates the data model underlying the solution, then everything else concerning input is taken care of.
The solution can be run both on premise and cloud-based, depending on the preference of the bank.
Once the technical set-up is ready, AQRISK set up the application based on best practice experience from other banks. From day one, the bank has a fully functioning solution, or rather two - one for production purposes and one for performing ad-hoc business scenarios and stress testing.
Most of the business implementation concerns calibrating the solution to fit the bank’s own pricing preferences, strategic priorities including desired profitability levels. Although AQOPTIMIZER is a standardized solution, it is highly configurable and caters to any pricing requirements.
Optimizing client assessments and pricing
Client-facing employees, like regional and branch directors, as well as advisors, are supported in assessing, pricing, and optimizing existing customers. Besides breaking down profitability across products and on aggregate customer level, it provides a high degree of flexibility to simulate changes to the customer, making it easy and quick for advisors to assess appropriate changes, to secure a desired level of profitability.
"The AQOPTIMIZER solution allows us to quickly and easily assess the earnings on individual customers, while also allowing us to simulate the impact of changes in interest rates and other earnings on the customer. This has given the individual advisor a much greater understanding of what determines the right price for the client." - Per Smith, Head of Business Development at Fynske Bank
A major time-consuming task with advisors is to prepare offers for potential new customers. The AQOPTIMIZER solution not only provides support in assessing existing customers, but also potential new customers - in minutes. This helps save a lot of resources with client-facing employees, but of course also assures that new customers being onboarding yield a satisfactory level of profitability to the bank.
Theoretical (re)pricing of all bank customers occurs automatically on a daily basis, which allows for quick assessments of customer changes, including identification and reporting of client deterioration. This helps mitigate potential credit losses by fast intervention.
Overview of customer profitability
The solution furthermore provides easy customer profitability overviews, so identifying which customers yield adequate profitability, or not, is always updated and readily available. This allows the bank to help advisors have a clear overview of customer performance and keep focus on the most relevant customers.
Utilizing customer business potentials
A lot of new growth in banks (can) arrive from being proactive in assessing customer business potentials and being effective in utilizing these for business opportunities, by providing new products and services to customers when they need it. Besides gaining business and profitability with existing customers, it is simply good customer service.
The AQOPTIMIZER helps leverage such business opportunities by displaying the identified customer business opportunities, both in a customer potentials overview and when assessing the customer in detail.
The AQOPTIMIZER solution helps support midsize and smaller banks with pricing functionality that is easily implemented with few resources required.
The solution also provides an innovative and effective framework to large banks, allowing them to save a lot internal development and maintenance resources while being assured continued massive new advances in their pricing models. Some of our clients have run other pricing tools - but are now leveraging the benefits of AQOPTIMIZER in running a stronger and more modern solution that provides higher value-creation.
"For seven years we have used a pricing tool which has progressed the bank in understanding pricing - with AQOPTIMIZER we can move the bank to the next level, with the ability to individualize, simulate and report." - Erik Nejrup Kjærside, Head of Business Development – Corporates at Vestjysk Bank
There is no doubt that optimized risk-based pricing in banking will become much more prevalent in the future – it is required to effectively optimize the core banking business and has huge positive benefits. AQRISK is here to help make this happen in close cooperation with our clients.
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For enquiries, please contact: Esge Räder (CCO): mail: esge.rader@aqrisk.com | mobile: +45 31328848
