Quantitative engine for banking pricing.
Quantitative models for assessing the expected financial impact of repricing accounts and fees. Experience connecting contractual terms, costs and scenarios to support bank decisions.
Estimate the impact of a pricing change before applying it.
As capital, credit or funding costs change, a bank needs to understand how its product economics evolve. Changing a price requires estimating the portfolio impact, connecting it to the terms in force and considering the contractual scope. This case brings together separate engagements: structured repricing plans, credit-fee models, account-fee reviews and analysis of new costs to inform commercial initiatives.
- Quantitative modelling
- Scenario simulation
- Banking pricing
Our consultants’ contribution
Value comes from connecting banking-product knowledge, cost drivers and quantitative modelling. Estimates make it possible to compare initiatives on a consistent basis and understand which assumptions drive expected outcomes before deciding on implementation.
Connect products, terms and costs
The analyses connect the products concerned, their current financial terms and relevant costs. Separate engagements addressed capital, credit and funding, alongside the economic impact of prudential requirements, deposit-guarantee contributions and negative interest-rate environments.
Model repricing scenarios
The quantitative engine supports comparison between current terms and proposed changes to estimate their expected financial impact. Modelling places each initiative in the context of the products and portfolio concerned, making the calculation basis explicit.
Support decisions and implementation planning
Analytical outputs inform the assessment of alternatives and the preparation of repricing plans. For unilateral changes, where applicable, the relevant framework is Article 118 of the Italian Banking Act (TUB): financial assessment accompanies the responsible teams’ review of contractual and regulatory requirements.
Products, terms and relevant costs
Modelling and comparison of repricing scenarios
Expected financial impact and decision support
Accounts, credit and costs.A quantitative perspective.
Separate engagements addressed different repricing needs. The common thread is translating economic changes and product terms into measurable inputs for decisions.
The dimensions to connect.
Products and terms
The starting point is what the bank offers and the financial terms in force.
- Accounts and account fees
- Credit fees
- Core product scope
Cost components
The analyses consider changes relevant to product economics.
- Capital, credit and funding
- Prudential requirements
- Contributions and interest-rate environment
Pricing changes and scenarios
Proposed changes are assessed against the current position.
- Current and proposed terms
- Calculation bases and assumptions
- Expected financial impact
From a pricing changeto an impact to assess.
The approach connects the scope of a repricing initiative with calculation assumptions and the financial interpretation of its outcome.
Know what is being changed.
Assessment starts with the products, accounts and terms concerned. Defining the scope makes it possible to interpret the expected impact against the chosen base.
- Products and accounts concerned
- Current financial terms
- Calculation base for simulation
An explicit scope for comparing alternatives.
Understand what is changing.
Capital, credit, funding and other relevant components inform the financial analysis. Their relevance to pricing and their potential use as contractual grounds require separate assessments.
- Capital and credit costs
- Funding costs
- Other relevant financial components
The economic variables to connect with products.
Compare the current and proposed position.
The model compares current terms with repricing assumptions to estimate the financial impact. Explicit assumptions and scope make the result interpretable.
- The same analytical scope
- Explicit calculation assumptions
- Expected financial difference
A scenario estimate to assess before implementation.
Bring the numbers into the discussion.
Estimates support business, finance and control functions in choosing a pricing initiative. Implementation follows the relevant contractual, regulatory and operational assessments.
- Comparison of alternatives
- Assessment by responsible teams
- Implementation plan
An informed repricing decision.
Several engagements. Specialist expertise.
The experiences are grouped by area of work while keeping their banking contexts distinct.
Core product and account repricing
Structured plans for reviewing terms and analysing account fees.
- Structured plan
- Developing a core product repricing plan for a bank, with a focus on changes to contractual terms.
- Account fees
- Managing repricing activities in the context of new costs associated with negative interest rates and contributions to the Italian Interbank Deposit Protection Fund (FITD).
Credit-fee models
Quantitative modelling connecting fees with new credit costs.
- Prudential context
- Managing a credit-fee repricing model in relation to costs considered in the context of SREP and the Capital Conservation Buffer.
- Capital, credit and funding
- Defining an approach to identify new cost components and inform credit repricing and commercial initiatives.
Financial estimation and initiative assessment
Simulation produces decision inputs within the scope considered.
- Expected financial impact
- Assessing the financial effect of changes to terms using the model’s assumptions.
- Interpreting results
- Comparing scenarios and analysing the components contributing to the estimate.
- Decision and implementation
- Working with the responsible teams to assess feasibility, contractual terms and the implementation approach.
The role of Article 118 of the Italian Banking Act.
Article 118 of the Italian Banking Act (TUB) governs unilateral changes to contractual terms in the circumstances it covers. Assessment includes contractual provisions, justified grounds and communication obligations. The quantitative model supports financial analysis; regulatory review and the decision to proceed remain with the bank’s responsible teams.
Estimates depend on scope and assumptions. The cost contexts described belong to separate historical engagements: their presence alone does not establish grounds for unilateral contractual changes.
Questions that need a quantitative foundation
- What is the expected effect of changing these terms?
- Which products and accounts are within scope?
- How do the costs considered relate to the pricing initiative?
- Which assumptions drive the difference between scenarios?
What it makespossible.
- A quantitative basis for assessing the expected impact of pricing changes.
- Analysis connecting new cost components with products and terms in force.
- Support for structured repricing plans across accounts and fees.
- Analytical inputs for discussions between business, finance and control functions.
Want to understand the financial impact of your pricing decisions?
Together, we define the data, calculation logic and scenarios needed to evaluate your pricing decisions.
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