Despite implementing the best CRM, customer intelligence and sales/service tools, banks are finding it difficult to break through the customer satisfaction barrier and remain a winner in the new economic arena. The reason? Banks are caught in the ‘silo-based’ web of IT infrastructure. This restricts them from having a product-centric approach, ignoring customer relationships in the process. Profitability of the relationship or the overall customer relationship is compromised, in such cases, since pricing disciplines and profitability are constrained towards a specific product.

Since their inception, every bank in this world has been witnessing the tug-of-war between profitability and customer satisfaction. Banks have been seeking ways to achieve profitability objectives, all the while keeping the customer satisfied. How best can these objectives be managed in the most balanced manner? The answer to this question lies in the factor that connects profitability with customer satisfaction – pricing. Research shows that price is the most important factor, based on which a customer chooses any product. A bank can strike the exact balance between customer satisfaction and internal product profitability by optimizing the pricing of its products.

In the days of yore, customers had to search for ten different service providers to avail ten different services. It’s almost passé now! Customers of transaction-based services such as banking, communications, utilities, logistics, etc. have plenty of options today, wherein the new-age multi-service enterprises pamper them with almost every service they require, under the same umbrella. Which means, service providers are now graduating to one-stop-shop enterprises, by offering wide range of services cutting across verticals. For example – say a bank – may soon choose to grow out of its ‘financial services provider’ bracket and begin to offer a plethora of services including communications, utilities and logistics. Or a telecom operator may soon start offering insurance, banking and utilities services apart from their regular communications, media and entertainment bouquet; in yet another scenario, a leading logistics provider may decide to diversify operations into retail, banking and entertainment services. In all these cases, the divergence in the focus of services will enable single service providers to offer the best value for money to their customers and thus retain their loyalty and major wallet share.

Banks are going through one of their toughest times in history. The subprime crisis and resulted credit crunch has led an economic slowdown with many banks breaking down and others struggling for growth. As the interest and investment revenues are becoming more and more undependable, banks are turning to fee income for growth. Thus, banks are turning into corporate banking which brings them the major share of fee income.

Being one of the fastest growing segments, the significance of UMAs (Unified Managed Accounts) in managed accounts is increasing exponentially and the industry is showing a clear journey towards UMAs from SMAs (Seperately Managed Accounts). UMA is a professionally managed fee-based private investment account that is rebalanced regularly and can encompass every investment vehicle (e.g. mutual funds, stocks, bonds and exchange traded funds (ETF)) in an investor's portfolio, all in a single account unlike SMA, in which the investor will have to open separate accounts if he wants to diversify his portfolio among different investment vehicles.