Partnership capitalizes on momentum of banks investing in modern deposit pricing capability to respond to rising interest rates
Nomis Solutions and Zafin announced today the formation of a strategic global alliance to deliver an integrated and seamless deposit pricing experience to retail banks.
As interest rates rise, many retail banks are not prepared to respond quickly, as back office systems were not designed to create, deploy and refine sophisticated deposit pricing quickly. Additionally, banks typically have not been able to devote the resources required to truly understand the price sensitivity of their customers and execute appropriate pricing strategies.
“As one of our customers put it, ‘this may be the first rising rate environment where banks actually go out of business,’” said Frank Rohde, CEO of Nomis Solutions. “Together with Zafin, we are going to make sure our customers are prepared to take share and grow profit.”
“This partnership is all about improving the overall health of a bank’s retail deposits business proactively,” said Al Karim Somji, Founder and CEO of Zafin. “Nomis provides the diagnosis and prescription, while Zafin delivers the treatment.”
The partnership brings together Nomis’ customer analytics and price optimization capabilities with Zafin’s pricing governance and execution capabilities into one end-to-end solution, enabling banks to:
Understand, measure and predict customer behavior, price sensitivity, balance flows and lifetime value using big data pricing science, helping banks to evolve from coarse tiers and geographic segmentation to leverage granular relationship and behavioral drivers;
Dynamically segment customers and optimize & tailor product and pricing to forecasts to achieve deposit growth, profitability and liquidity targets under varying interest rate, competitor and macro-economic scenarios;
Execute an automated and holistic deposit pricing management strategy, with tailored segment and channel-specific offerings, and create incentives to encourage the desired front-line behavior.
- Better understand the underlying drivers of depositors’ behavior – an important factor in a rising interest rate environment.
- Mitigate customer flight risk without increasing interest expenses, with potential net interest income gains of as much as 10 to 20 bps.
- Create a competitive advantage in a commoditized deposit landscape with differentiated pricing and rapid response.
- Streamline processes and improve agility, with the ability to identify and respond quickly to changing customer and market dynamics.
- Create a strategic lever for managing liquidity levels and product mixes.
- Mitigate conduct and compliance risk with audit trails and workflows for complete transparency.
- Innovate while minimizing risk – no changes to the bank’s core banking system required.
The first implementation of this integrated offering is currently underway with a common client, a top-10 U.S. bank, with an expected go-live date in Q2 2016.
“We are delighted to be partnering with Zafin to offer an industry first for retail banking – end-to-end next-gen price optimization, creation, and deployment,” said Rohde of Nomis. “Zafin and Nomis share the same ambition: To bring modern pricing to banking. Together, we make this transition easy and deliver the most comprehensive deposit pricing solution available today.”
“The partnership between Nomis and Zafin combines two advanced solutions into one compelling value proposition,” said Zafin’s Somji. “With Nomis advanced price creation and Zafin’s pricing governance capabilities for retail banking, financial institutions have a winning platform to execute value-added rate management strategies – striking an optimal balance of profitability, liquidity, deposit stability, and customer experience.”