Evaluation of Customer Profitability Analytics Vendors

October 9, 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 info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

San Francisco, CA, USA October 9, 2007


Executive Summary 03
Overview 04
Definitions 05
  The Ultimate Calculation:  Account Profitability 07
  Profitability Knowledge:  Why It Matters 08
The Vendor Landscape 12
  Vendor Scope 13
  Market Segment Coverage 13
Celent's ABCD Vendor Analysis 16
  The Results 16
  Advanced Technology 17
  Breadth of Functionality and Usability 20
  Customer Base 23
  Depth of Client Services 25
Vendor Profiles 27
  CorePROFIT 27
  Fidelity National Information Services 29
  IPS-Sendero 30
  Oracle 31
  ProfitStars 33
  QRM 34
  SAS 36
  SunGard Bancware 38
  Teradata 40
Conclusions 41


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