Evaluating the potential benefit of Prospective to Pilgrim Bank

THE POTENTIAL BENEFITS OF PROSPECTIVE CUSTOMERS 4

customers

1. View of customer’s potential benefit to the bank.

From the statistics, the different categories of customers displaydifferent mean profits to the bank. Each of the five categories has adifferent potential to the bank profits. The category with thehighest mean profit is the one comprising of on-line customers. Thecategory with the lowest mean profit is made up of customers who have1 piece of information missing from their records. The reasons forthe disparity in these categories are subject to debate. However, themost likely cause for the high profits in the ‘online customers’category is the ease with which they can access their funds andloans.

My job, as a bank representative, is to evaluate the potentialbenefit of a prospective customer to the bank. If the customer hasapplied to use the on- line banking services, then she will be ofmore benefit to the bank as opposed to when she opts to conduct allher banking transactions physically. If the prospective customer hasa profile displaying accurate information in all the six categoriesrequired by the bank, chances are she will be of more benefit to thebank. Calculations have shown that customers with an item or twomissing from their profile are less profitable than those with acomplete profile.

As a good bank representative, I will advise the prospective customerto apply for the online banking services because they are moreprofitable to the bank. I would also ensure that the prospectiveclient fills out all the information required in their profile.

2. Banking Start-ups Analysis

The article talks about new ways of determining the credit worthinessof a potential customer. New software has the capability to unveilthe behavior of prospective customers. The software uses a number ofparameters to establish the character of a person. The article looksat the time spent online to read the terms and conditions of bankservices. The software also detects the accuracy of the customer whenusing capitalization while filling in their forms.

Other parameters include the social connections of the customer,their domestic buying habits, and bill- paying records (Lohr, 2015).The principal idea behind this invention is that the personalattributes of a person may determine their ability to pay loans.Unlike before when banks relied on calculations only to determine thecredit worthiness of a prospective customer, more qualitativestandards are being used today. The standards in the new software areused to evaluate the personal attributes of a person to determine thecredit worthiness.

The connection between the article and the profit margin betweendifferent categories of the Pilgrim Bank customers is evident inseveral instances. From the article, the personal attributes of apotential customer can predict their credit worthiness. Pilgrim Bankcustomers who had some information missing from their profile provedto be the least profitable. Information missing from one’s profileimplies carelessness or lack of commitment to the bank. The creditworthiness of such customers is low, hence their low mean in profits.The personal attributes of on- line customers appear to be commitmentand attention detail. Such a category proved to be more profitablefor the bank. When evaluating new customers, Pilgrim Bank shouldevaluate their personal attributes as a means of establishing theprofitability.

Reference

Lohr, S., (2015). Banking Start-Ups Adopt New Tools for Lending.New York Times. Retrieved from&lthttp://www.nytimes.com/2015/01/19/technology/banking-start-ups-adopt-new-tools-for-lending.html&gt3 March, 2015