WEBVTT

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ANDRE LEME: In recent years, most
banks have been focusing on costs,

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but they have not realized the full potential
of their corporate clients' relationships.

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Full potential means achieving the full potential of the
profitability that those relationships can bring to the bank.

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To start doing that, the banks must understand which
clients are profitable and which clients are not profitable.

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The truth is that most of the economic profit inside
a corporate bank comes only from 20% of those clients.

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On the opposite side of the spectrum, you have 30%
of the clients below economic profit thresholds.

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That's huge.

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Banks that have succeeded in having a very profitable
portfolio, they started by categorizing their clients,

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considering company size and economic profit.

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That information created segments that
guided the actions that should be taken

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and must be taken along the banks' relationships.

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And those relationships, the client
life cycle, it starts with onboarding.

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And so in the very onboarding, you
should have a very good understanding

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of what should be done to take that client to
profitability once the relationship starts.

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And along the life cycle, along the relationship, pricing
each deal or pricing each product offer should consider,

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should be considered looking beyond that unique decision,
understanding historical profit, understanding expected profit

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and then making a decision that's
accretive to their relationship

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and avoiding those that are dilutive to the relationship.

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To help banks doing that, a very basic tool is used when you
think about account plans that have been in place for decades.

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And an account plan is still one of the best
tools to control corporate clients' profitability.

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So having the right data, looking at historical data and
planning the future, looking what you should continue to do

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or you should start doing to make that
relationship more profitable is key.

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So a good account plan with the proper data
is key to manage clients' profitability.

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It's never an easy job to push clients into profitability.

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But it's harder to cast those clients
loose if they are not profitable enough.

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So having the right data, an explicit plan in
place, is key to inject a little bit of rigor

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in this process that is a very, very,
historically very loose and personal process.

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