Opinion: Banks and Revenue Leakages!
What do you and me as individuals do when the going gets tough economically? Double check our telephone bills? See if we used them more than we should have; check if there is a better plan out there with better rates which was not so important before? Weigh whether to use your car or public transport now depending on the need to use. Make sure that you bought groceries and vegetables at the best rates that were never so important since you loved the place you shopped more than the value. Double check all the rebate coupons that you never cared to check on before. There are two keys things that I am talking about, one is controlling the overhead costs or expenditures and the second is plugging the leakages that existed before but you cared less. I believe similar to this, banks in today's environment will have to closely consider performance metrics like costs, profitability of product and revenue leakages. Measurement of costs and product profitability are in practice today, but is there systematic way of identifying revenue leakages and fixing the same? Revenue leakages could be of various types like a lost opportunity to price right, not able to monitor the customer SLA’s, losing transactions due to system in efficiencies or unable to recover from customers due to in adequate processes. Sudhir talks about revenue leakages in banks today at various stages of a relationship life cycle in his published paper 'Revenue leakage an opportunity calling' (Published link 1, Published link2) . I agree !