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Amdocs (NYSE: DOX) continues to leverage its telephony roots to expand into retail banking, introducing three vertical applications for the financial services market under an approach called Dynamic Banking.
The new products are Dynamic Pricing and Product Bundling, Customer Communications, and Mobile and Micro-payments.
Dynamic Banking is an IT strategy that enables banks to bundle products and develop more innovative pricing strategies in order to increase the number of products and services sold to customers, Michael Blum, president, Financial Services Division, told CRM Buyer.
"Most banks have implemented the necessary technology 
on the front end; they have built out the necessary customer channels and developed their brands," Blum said. The back office -- which Amdocs is targeting with this release -- has been sorely neglected.
Three Applications
The Dynamic Pricing and Product Bundling application standardizes a bank's pricing and product bundling processes by introducing certain components -- such as an enterprise-wide product catalog -- that can be replicated throughout the organization. This allows the bank to reduce maintenance costs and increase its cross-sell opportunities.
The Customer Communications module aggregates account information and personalizes customer correspondence services, such as statement design and fulfillment, through print and electronic formats. Amdocs said this step could help banks to reduce product and mailing costs by up to 30 percent.
The Mobile and Micro-payments application links a mobile phone network with the banking network.
One bank in Europe already is implementing the new applications, according to Blum. Amdocs is in discussions with an additional nine to ten such banks in the United States and Europe.
Lessons From the Telcos
One of the largest application providers to the telecom industry, Amdocs expects it will be able to transfer this functionality to the financial services industry.
For example, Blum said, the volume of transactions around telecom is similar to that in a banking environment -- frequent and very high. Also, telcos have become expert at introducing new products quickly and bundling them with pre-existing services at a new price point.
"This is something most banks have not learned to do well," he remarked. Typically, it will take a bank between 9 and 18 months to introduce a new product, and it is then marketed on a stand-alone basis.
This is partly historic, Blum explained. It wasn't until five years ago that regulations changed to allow banks to cross-sell and upsell many services.
Since then, banks have not updated back office legacy systems that would help them better integrate their operations, he noted.
"Because they were originally structured along vertical lines, their old systems have not been well integrated," Blum observed.
