Retail Bank

Accenture, 2nd Round

The Problem

Our client is the private division of a retail bank that has 100,000 clients, $500,000,000 in revenues, and $150,000,000 in net income. Our client’s goal is to double the revenues and profits of the business in 5 years. Assess the feasibility of the goal. Prioritize the two or three most important steps they should take in their action plan.

Information Gathering

Read this information well before you give the case. Share this information in each bullet only if the candidate asks for it in a clear and deliberate way.

Pricing: they make their revenues from interest and fees

Costs: transaction costs, salaries. The nature of the sale is one-on-one pitch between the bank salesperson and the customer. So the salary cost and the transaction costs tend to be high.

Geography: They have a large presence in the North East and a moderate presence in the South East

Products: They have 4 product lines, with the following ranks in revenue and profit generation:


Customers: 20-25% of customers purchase more than one product. 75-80%% of customers purchase only one product. They are segmented into 5 groups:

Volume                           Number of Customers

Ultra High:                                           $10M+                                         5%
High Net:                                            $1M-$10M                                  10%
Affluent:                                            $0.5M-$1M                                  20%
Mass Affluent:                          $100,000-$500,000                             25%
Mass:                                                    $0-$100,000                               40%

The Ultra High, High Net, and Affluent segments generate 60-70% of the revenues, while the Mass Affluent and Mass segments generate 30-40% of the revenues.


At this point, the candidate should start analyzing the numbers to make fact-based recommendations.

Buyer selection: Since transaction costs tend to be the same for the different customer segments, it makes sense to grow the number of the higher revenue generating customers and decrease the number of the lower revenue generating customers. We can attract the top 3 segments by marketing more selectively and doing promotions for higher income customer groups. We can discourage less affluent customers by raising the prices on them, giving them the option to add more profits or switch to a competitor.

Cross-sell: Since 75% of customers purchase only one product. There’s an opportunity for cross-selling between the different product lines. Assuming that we will only serve the top 3 customer segments:

Revenue generated by customers in top 3 customer segments = $500M x 70% = $350M

Revenue generated by customers who only have one product = $350M x 75% = $262.5M

If we assume that the 4 types of products generate comparable revenues, then if we cross-sell each customer 3 other products then the new revenue will be = $262.5 x 4 = $1,050M


It is feasible to double revenues and profits if we can only cross-sell our current customers the other products in our business. The next steps Private Retail Bank should take are:

  • Give incentives to the bank’s sales force to cross-sell different products to its existing customers.
  • Do promotions for the top 3 affluent market segments.
  • Increase its prices in its bottom 2 mass market segments to “fire” its unprofitable market segments.

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