When it comes to banking, decisions based on intuition don’t drive profitable action. It’s quantitative insights which lead to informed decisions that ultimately drive profits and grow revenue. Banks relying on current financial systems and dashboards to analyze their data struggle to scale amidst their industry’s competitive environment. Changes in regulations, technology, customer preferences, and strategy all increase the imperative for banks to discover and act on the most profitable decisions. For banks to successfully navigate this competitive landscape, they must overcome several challenges.

From understanding variation in costs across different branches to deciding whether or not newly developed products are profitable, SAS CPM helps banks uncover and analyze accurate data to maximize profitability in an intuitive model that’s easy for businesses to understand. From CEOs to marketing managers, every member of the bank can interpret the data and make informed decisions to manage resources, optimize processes and create effective marketing strategies that improve performance.

SAS CPM is the banking industry’s ultimate problem solver

With constantly changing regulations and technology that affect customer preferences, stakes are higher than ever for banks to make the most profitable decisions that result in revenue growth. For example, within the last decade the use of mobile banking in the US has increased by over 200%. A new technological frontier, mobile banking consists of an entirely different cost structure that creates new competition for the banking industry. This access to different market segments impacts the bank’s overall product offerings and pricing. Additionally, acquiring new customers and retaining existing customers requires investment from the bank in marketing activities where profitable paybacks aren’t certain. This results in banks making unprofitable decisions simply because they don’t have access to necessary data that drives profitable action.

In addition to the impact of mobile banking, banks must also adjust to varying factors like rising interest rates. Originally thought to help banks, rising interest rates have created problems specifically for small and regional branches throughout the US. As rates rise, customers demand more interest on their deposits. This presents a problem as many of these small banks increased their lending after the financial crisis by adding long-term, low-rate loans. As the small banks begin to pay more to their depositors, the rates they earn on loans barely move. Regional banks like Banc of California Inc., where interest costs rose 68% within the last year, among other regional US banks, are certainly feeling adverse effects. With SAS CPM, banks gain analytical insight into areas that help them navigate rapidly changing landscapes to decrease uncertainty and enable them to confidently make profitable decisions.

SAS CPM is profitable decision-making made easy.

SAS CPM informs banks where growth should be focused and how profit should be increased. Banks are all asking similar questions. Questions like, should our focus be reducing the cost of operations as well as the cost of regulatory reporting? Or is the solution to increase the profitability of existing customers, adding new customers, new products, new channels and investing in other changes in market direction and penetration? SAS CPM serves a bank’s need to uncover sources of profitability in each dimension of the business, allowing them to decide how to implement profitable growth solutions. This multi-dimensional model makes profitable decision-making easier. With SAS CPM, banks finally have the answers to pertinent questions that current financial reporting systems previously failed to solve.

Uncover hidden areas of profitability and unprofitability.

Banks using current financial reporting are blindly unaware of the areas in their business that are most (and least) profitable. SAS CPM gives banks a multi-dimensional model that reports profits by product, customer, and channel. This allows banks to evaluate the impact of costs, and measure profitability more effectively.

It’s common, if not standard, that banks who implement SAS CPM discover about 20% of customers deliver 500% of their profits, 60% are breakeven, and the remaining 20% deliver -400% of the profits. SAS CPM reveals this otherwise hidden profile of profitability to provide details that support decisions to significantly modify its makeup.

Report for a bank client shows the net contribution of each customer by different account(product), activity, etc.  Interacts with profit cliff.

Key features of SAS CPM that help drive banking profitability:

  • Branch Analysis: Allows banks to understand why branch A has lower costs than branch B.
  • Customer Service Cost: Varies in total and from one customer, or customer segment, to another.
  • Product Development: Allows banks to keep up with newly developed financial products and take full advantage of technology changes and customer practices. Informs banks whether their product development is effective and profitable and allows them to set an appropriate price.
  • Marketing decisions: Allows banks to develop strategy for allocation of marketing efforts and costs.

SAS CPM allows banks to employ high-performance.

For banks to succeed and maintain their competitive edge, all resources, including people, must contribute to profitability, both in terms of role and decision-making. With SAS CPM, banks have the ability to tie employee activity to profitability, giving employees and organizational leaders the necessary tools and data to make profitable decisions. The multi-dimensional model allows banks to generate a high-performing team with employees who equally contribute to driving revenue.

Multidimensional modeling that’s powerful for banking, easy for you.

The modeling in SAS CPM is fully multidimensional with the ability to create accounts using multiple dimensions in every module. With features like point-and-click and drag-and-drop model navigation with dimensionality, SAS CPM allows users to easily perform sophisticated cost modeling and profitability analysis while maintaining full control over techniques, rule use, ETL processes, and assignment creation.

Having difficulty committing to important decisions that could potentially lead to decreased profits and increased costs? No problem. SAS CPM allows you to run hypothetical what-if analysis to model how changes in driver volumes affect costs, profit and resource requirements.

Is planning ahead nearly impossible for your organization because you simply don’t have the right data (or time) to do it? With the consumption-driven modeling methods in SAS CPM, you can quickly and accurately predict the resource implications of changes in output demand including measurement of unused capacity, activity-based budgeting, hypothetical scenarios, and simulation analysis.

Make profitable decisions faster.

SAS CPM runs significantly faster than standard banking technology. Complex models that used to take hours to update can now be run in just a fraction of that time. This high-performing model quickly identifies issues, reveals weak links, and creates opportunities for cross-sell and upsell.

Ready to unlock the profitability power of SAS CPM? With over 100 implementations, CT Global Solutions is the SAS Preferred Gold Partner for implementing SAS CPM. Contact us today to learn how we can help your business make profitable decisions easier. Learn more about our SAS CPM solutions here.

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