Customer profitability audit in the Australian banking sector
Abstract
Many banks and financial institutions have resisted the opportunity to model customer profiles because of the cost of developing and maintaining customer profitability information based on the capture and storage of individual transactions. This paper describes the development of such a model to calculate customer profitability, by putting into place systems which allow the capture and analysis of accurate, up‐to‐date information regarding the transactions of individual customers. The implementation of the model within one regional Australian bank is detailed, together with an indication of its potential for operational and strategic decision making. We speculate that such a model might be more widely adopted to allow banks to focus effectively on the most profitable segments of their business.
Keywords
Citation
Hart, A. and Smith, M. (1998), "Customer profitability audit in the Australian banking sector", Managerial Auditing Journal, Vol. 13 No. 7, pp. 411-418. https://doi.org/10.1108/02686909810226560
Publisher
:MCB UP Ltd
Copyright © 1998, MCB UP Limited