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Faster than activity-based costing.
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Provides insight into potential revenue leaks.
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A listing of the many banks and credit unions that have benefited from CorePROFIT’s behavior-based cost development, as well as a set of solution deliverables can be provided upon request.
Please contact CorePROFIT to receive additional information about this solution.
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Understanding the specific costs to sell products and provide services to customers or members is the foundation for understanding customer/member value. If a bank or credit union is striving to enhance the information on which it bases customer/member management decisions, its initial focus should be on developing and understanding its underlying cost structures.
Customer/member value is based directly on the net contribution (or profitability) of the customer/member relationship. To accurately measure net contribution though, the bank or credit union must first understand the impacts of the two components of profitability — revenues and the costs of generating revenues. For most banks and credit unions, revenue information exists in its core business applications at the customer/member account level. The corresponding costs associated with that revenue however, are typically not assigned to specific a customer/member account based on how his/her behavior affects resource consumption.
Because behavior-based costs reflect customer/member preference and behavior, they are one of the most revealing factors for assessing customer/member value because they are based on the “actual” cost of selling products to and servicing that customer/member.
Simply stated, a CorePROFIT behavior-based cost development initiative positions the bank or credit union to be able to align revenue to the activities that generate it – and in a substantially more accelerated time frame than either industrial engineering studies (time and motion) or traditional activity-based costing techniques (a BBC project usually takes 1/6 to 1/8 the time of an activity-based cost development project). An additional benefit of this accelerated methodology is the ability to provide insights into potential revenue leakage at the bank or credit union.
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