Evaluation of Customer Profitability Analytics Vendors

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8 October 2007


San Francisco, CA, USA October 9, 2007

Over the next decade, financial institutions will differentiate themselves based on their customer profitability analytics.

As the return on traditional growth strategies deteriorates, financial institutions are finding that they need to shift gears from a pure growth plan to increasing customer profitability. In a new report, , Celent examines the necessary "gears" offered by third party customer profitability analytics providers.

Celent believes that the ability to develop customer profitability analytics and execute strategies and tactics based on the results will differentiate financial institutions over the next decade. Financial institutions that differentiate service levels, develop segment-specific products, and implement relationship pricing based on customer profitability will excel.

"It has always been easier for financial institutions to improve the bottom line by cutting costs rather than growing revenues. The revenue lever has been trickier to maneuver for two reasons. First, it takes time to show results (unless a financial institution simply acquires business). Second, it does not guarantee profit growth. Banking economics are such that it is easy to grow unprofitably," comments Alenka Grealish, author of the report and Managing Director of the Banking team.

Given the growing importance of profitable growth and the maturing of customer profitability applications, Celent conducted a vendor evaluation applying its ABCD Vendor View framework. Celent examined the offerings of nine vendors: CorePROFIT, Fidelity National Information Services (FNIS), IPS-Sendero (a Fiserv company), Oracle, ProfitStars (a Jack Henry & Associates company), QRM, SAS, SunGard BancWare, and Teradata. The selection criteria included ability to calculate profitability at the account level and at least five installations in the US.

This 42-page report contains 10 figures and 19 tables. A table of contents is available online.

Members of Celent's Retail Banking and Wholesale Banking research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.