Swot Analysis Of Royal Bank

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Although the SMR&A group began their mission in 1995, the bank has long had an interest in analyzing customer data. As an example, the bank has measured customer profitability across the retail customer base since 1992. In its current environment, Royal Bank uses the Value Analyzer profitability system from NCR to create a comprehensive view of customer contribution. Profitability measurement and the refinement of such provides a clear illustration of the bank’s longstanding commitment to refining its capability to capture and mine its customer data to improve its relationships with customers. Profitability measurement is complemented by a number of other strategic client models, such as credit risk; potential; lifetime value; vulnerability;…show more content…
Every Royal Bank customer has a relationship with the bank, but the nature and definition of the relationship vary according to the needs and requirements of the customer. As an example, some customers have no interest in being recognized by bank personnel when they contact the institution—for these customers low price or speed of service are the dominant properties of the relationship. For other customers, highly personalized interactions are the most important aspect of their relationship with the bank. The critical challenge for Royal Bank is to recognize that it must act in accordance with the wishes of its customers while still trying to achieve its own strategic objectives. If customers do not emphatically make known their expectations of the organization, the bank attempts to predict what the customers’ expectations are based upon prior observed behavior. This complex effort is essential to managing the customer experience effectively. However, strong customer relationships are not built as a one-way street. Royal Bank believes that its competitive advantage lies in its ability to optimize between the client’s needs and the bank’s objectives. To facilitate that optimization, SMR&A at Royal Bank has grouped customers into four categories according to its strategic objectives: 1. Retain existing profitable customers 2. Grow and strengthen customer relationships 3. Manage and control customer credit risk 4. Optimize costs Customers are scored according to their profitability, credit risk profile, vulnerability to attrition, and projected lifetime value. Then they are placed in one of 14 categories depending on their scores across the bank’s four strategic objectives. Essentially, the scores assigned to customers drive the CRM strategy creation within the bank, whereas the segment code serves as a proxy for the client
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