Rbc Case

1869 Words Mar 4th, 2013 8 Pages
RBC Financial Group Case 1. At the start of the 21st century, RBC was Canada’s leading bank and largest bank in terms of assets and market capitalization. It was a full-service bank with five main lines of business: personal and commercial banking, insurance, wealth management, corporate / investment banking, and transaction processing. The commercial bank of RBC (Royal Bank) accounted for nearly 50% of the company’s net income and had an extensive delivery network with branches, Automated Banking Machines (ABM’s), point of sale terminals, mobile sales staff, and 1.4 million online banking customers and 2 million phone customers. The bank also had an extremely strong international network.

The bank had an overall strategy of being
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5. Reich should make the car loan to the niece for a few reasons: 1. Because the niece was not in the relationship banking program, a lot of the information that would be relevant to figuring out the customer’s lifetime potential would not be present in the CRM system. 2. This was the niece of a very important and long-time customer of the bank. It would be important not to alienate this important customer. 3. When the CRM system doesn’t provide information necessary Reich should advocate for this customer because of her potential like she is a fresh MBA grad that could be a good source of future revenue or she could be a potential customer for a credit card.

The interest rate that should be provided should be at least prime + 2.5% so it at least competes with that of what the dealership is offering.

6. I think there are a couple of options that the bank can look at when dealing with the highly unprofitable customers: 1. They can have flat – rate packages to cover some of the costs that are making these customers unprofitable. 2. They can slowly try to phase out ABMs and they can start with geographies that have the customers who keep the lower balances in their accounts. If they take this phased approach, it would at least make it a little predictable to other customers that this is likely coming. You can let customers know well ahead of time and offer them some kind of one-time incentive to stay with the bank.
7.
A. The

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