Smart Advisor enables RMs to unlock greater insights through two main capabilities:
Benchmark
Smart Advisor show RMs how their deal compares with similar booked deals for credit products from the bank’s back book. This allows the RM to instantly understand recent prices and deal structures for similar clients with similar needs. The tool visually shows the range of prices, helping the RM to see if their deal is priced within expected bounds. The RM has the ability to adjust the margin directly using Smart Advisor, which automatically updates the return calculation.
Additionally, the ability to instantly compare the current deal to existing deals provides a digital control to identify pricing anomalies prior to deal closure to support the bank’s conduct and compliance agenda.
Solver
Solver makes suggestions on how to adjust a deal structure to improve returns for the bank. For example, if the deal is below the bank’s target return, then Solver will proactively identify which return levers (margin, fees, tenor, etc.) can be adjusted and by what amount, to hit target. Like Benchmark, RMs are able to adjust the return levers and instantly see the impact on return to iterate the deal parameters and optimize the return.
A better pricing strategy
Smart Advisor helps banks take advantage of AI and leverage their data to produce valid insights for their RMs to structure and price deals that are beneficial for both the bank and their clients. In addition, RMs who use the tool can find a deal structure and price in a single step, rather than through multiple iterations. As a result, the RM can quickly explore different deal options to a find a product that is a fit for their client.
An increasing number of banks are seeking a competitive edge by introducing AI-enabled tools like Smart Advisor. These use portfolio data and analytics to provide real-time insights and support to their RMs in their pricing negotiations. In the end, pricing is crucial for RMs to maintain successful, long-lasting client relationships and build greater value creation.