Is your pricing aligned with the value your bank gets from a deal? Have you ever signed off on a deal at certain rates, only to realize during the deal journey that it should have been much higher? Misaligned pricing is a significant challenge for banks looking to improve deal efficiency and profitability. Many of them treat pricing as a one-time event that ends when the deal is signed. But if the expected profitability of a customer relationship does not materialize, they are left with a pricing gap that impacts revenues and growth. To close that gap, banks must treat pricing not as a static artifact but as an evolving, adaptive relationship instrument.

Why the Pricing Gap Persists

Traditional deal management approaches in banks are static and product centric. They lack market intelligence and cannot cut through organizational silos to present contextual, or relationship-based proposals. As a result, the deals are based on assumptions rather than data. The common pricing gap issues are:

• Assumptions vs. Actual Behavior: In the absence of relevant customer relationship data, banks price deals based on expected or assumed customer behavior. For example, they may use some manual or intuitive processes to project certain value of deposits, usage and fees and price the deal accordingly. But many of these assumptions may never actually play out, resulting in an unprofitable deal.

• Fear of Repricing: Modern banks now operate in a highly volatile market environment. Changing market conditions or shifting costs require pricing to be adjusted accordingly. But many organizations hesitate to reprice out of fear of losing out on the deal or ruining the customer relationship. This leads to stale margins even when the competitive dynamics have changed.

• Fragmented Visibility and Weak Feedback Loops: Traditionally, pricing decisions take place within product and operational silos. And as a result, there is limited visibility into its effectiveness and profitability. Banks often lack the systems to continuously compare approved pricing vs actual relationship outcomes or commitments met.

• Misaligned Incentives: Many bankers are rewarded for closing deals or volume, not for ensuring profitability or relationship performance over time. And while this may seem like a good idea in the short term, it impacts long-term deal profitability.

Principles for Modern Pricing in Deals

Pricing is a continuous process that spans the entire customer lifecycle from acquisition and onboarding to growth and renewal. Every deal must be monitored and adjusted as required.  Deal pricing is based on certain commitments made by the customer such as minimum deposit amounts, business volumes, or transactions per month. They must be clearly defined at the time of deal signing and relationship managers must monitor it as they progress to ensure that the commitments are met. Any misalignment on this front will inevitably result in an unprofitable deal. There must be room for repricing where justified, especially when assumptions prove invalid. But this must be done transparently and with mechanisms to preserve client engagement. Relationship managers must also be able to use external benchmarks, peer pricing data, and internal credit and risk metrics to determine pricing. This ensures that the set price is defensible and responsive to shifts.

The SunTec Advantage

Legacy deal management systems and processes lack the flexibility to cut through organizational silos or integrate market intelligence for personalized and contextual pricing. They cannot monitor deals through their lifecycle to flag discrepancies or reprice them based on new circumstances. Unfortunately, banks that continue to work with these static, product-centric deal management strategies will not be able to grow and thrive in a market that is increasingly challenging, disruptive, and competitive.

The good news is that SunTec has recently launched an enhanced AI-augmented Deal Management product that can ensure transparent, intelligent, contextual, and personalized pricing. Here’s what it offers:

• Allows deal teams to simulate multiple pricing structures like interest, fees, offsets, hybrid credits, and compare profitability under different assumptions.

• Pricing decisions can be immediately linked to account-level economics: earnings credit offsets in case of account analysis, hybrid interest cost, product bundling impact.

• Teams can monitor how deals evolve post-close and if commitments are being met.  Analytics dashboards help spot any pricing drift before it becomes a larger gap.

• Pricing is not decided in a vacuum. Instead, credit, product, treasury, and relationship management teams all collaborate, reducing misalignment.

• It leverages external market intelligence services and third-party benchmark providers. This lets teams compare proposed deal prices against peer comparatives, across segments, industries, and geographies.

• Every pricing decision, override, change, or repricing is logged. This builds transparency and trust, especially for large, complex deals.

Deal pricing does not end with the contract signing. It is a complex and constantly evolving journey that can make or break customer relationships. Banks that get this right see fewer surprises, higher net interest margins, and a stronger competitive position. SunTec Xelerate Deal Management  can help simplify and modernize deal pricing and help banks maximize profits from their deals.