Customer Profitability Case Study

Two members of our team worked with a UK Private Bank to develop a customer profitability system capable of producing individual information for each customer.

This project involved the identification and classification of all cost data and the development of an activity based costing model in order to calculate product costs for each transaction type.

The main part of the project involved capturing the daily transactions for each customer to ensure that daily balances and actual transaction volumes could be calculated and used as the basis for customer profitability calculations.

In parallel it was necessary to ensure that all accounts could be linked to customer numbers to ensure accurate overall profitability figures combining all products for each customer.  This enabled the bank to see where waived fees and discounted commissions could be justified by the cross-sell ratios.

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