A New Revenue / Services Model
The income model of traditional banks, under attack from all sides, is making its last stand:
- Disappearance of cash cows: low yield curve, traditional sources of income crushed (packages, account management, discrepancies, electronic payment (CB, EPT), life insurance)
- Revolution of online banking and neo banking and increasing pressure for free services on daily banking
Customers are rejecting the pricing model, no longer prepared to pay fees or for transactions that they don’t value. Paradoxically, the two things that customers do value in banks – trust and the personal relationship – are free.
Banks have been inspired by the digital, data and ethical revolutions, and become aware of the need to reinvent their revenue and value creation models (considering open banking and new offer platforms and services)
To do this, they must rely on foresight and innovation (ideation methods such as blue ocean, design of offers and services), and even data (refined and personalized customer knowledge through data) to define new areas of development.
The banking income model of tomorrow will also be an ethical model For Good regarding customer requirements and bank commitment to energy transition and support for local economies. Beyond SRI savings and social impact loans, it is now up to banks to offer their customers a genuine ethical universe, with an offer that corresponds to the customer.
Finally, the new revenue and service model must be accompanied by a global overhaul of pricing methods so that they can finally be aligned with customer values. Thanks to a data approach, banks can be vigilant in simulating the impacts on NBI of new models while supporting major changes in pricing engines.