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COMA Assignment

The document discusses cost and profitability analysis of personal financial products at Co-op Bank. It describes the activity-based costing process used to determine unit costs of products. It also discusses how the bank should handle unprofitable customers - it suggests increasing transaction fees or minimum transactions for savings accounts with low activity to encourage inactive customers to leave. While customer profitability analysis and focusing on profitable relationships is compatible with the bank's mission, the case does not provide evidence that funds are used for legal activities only.

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Prateek Jain
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13 views

COMA Assignment

The document discusses cost and profitability analysis of personal financial products at Co-op Bank. It describes the activity-based costing process used to determine unit costs of products. It also discusses how the bank should handle unprofitable customers - it suggests increasing transaction fees or minimum transactions for savings accounts with low activity to encourage inactive customers to leave. While customer profitability analysis and focusing on profitable relationships is compatible with the bank's mission, the case does not provide evidence that funds are used for legal activities only.

Uploaded by

Prateek Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CCMA Case

1he Cooperat|ve 8ank



Group No S
AdlLl arekh 2011003
uerrlck Menezes 2011013
Parshada 8orkar 2011023
neera[ kumar Slngh 2011033
raLeek !aln 2011043
Su[eeL !og 2011033








Comment on the process used to deve|op cost and prof|tab|||ty |nformat|on on ersona|
serv|ce roducts Shou|d Coop 8ank phase out the unprof|tab|e Independent I|nanc|a|
Adv|ce]Insurance and path f|nder products?

@he CooperaLlve 8ank has used AcLlvlLy 8ased cosLlng ln Lhe followlng manner
l A crossfuncLlonal Leam across all Lhe producLs and servlces offered was formed Lo
(a) 8esource CosL ools
(b) ueflne acLlvlLy of Lhe same
(c) MaLch resource cosL Lo acLlvlLles
(d) @race sLaff cosL
(e) @lme spenL Lracked

ll
(a) ueflne cosL drlven for each producL
(b) unlL cosL of producL deLermlned
(CuanLlLy of each acLlvlLy cosL drlver of each producL) x (8aLe of each cosL drlver)
(c) Asslgnlng operaLlng cosL Lo acLlvlLles
(d) roflLablllLy CalculaLed

lll

CurrenL AccounL Lxpenses


rocesslng @ransacLlons MalnLalnlng @ransacLlons
33 43
8ase no of cusLomers 8ase no of accounLs

Low Medlum Plgh

lv
13 SusLalnlng expenses are noL allocaLed over oLher expense producLs

now shou|d the bank dea| w|th the |arge number of unprof|tab|e customers? When shou|d
unprof|tab|e customers be reta|ned and when shou|d they be "demarketed"? now shou|d
Dav|d Ia|we|| dec|de how to d|rect h|s ||m|ted market|ng resources?
@he number of LransacLlons per monLh per cusLomer ln Lhe savlngs accounL for savlngs
accounL was fewer Lhan 2 LransacLlons per quarLer Pence Lhe recovery for malnLalnlng Lhe
accounL could noL be made from LransacLlon fees Pence Lhere are 2 opLlons LlLher Lhe
bank should lncrease Lhe fees per LransacLlon or lncrease no Lhe obllgaLory mlnlmum
LransacLlons Also lf Lhere ls no LransacLlon wlLhln a cerLaln Llme perlod pre speclfled charge
should be levled on Lhe accounL holder @hls way Lhe unlnLeresLed cusLomers would
auLomaLlcally move ouL of Lhe sysLem by preferrlng noL Lo pay Lhe addlLlonal charges for Lhe
unuLlllzed servlces

3 Is the customer prof|tab|||ty and subsequent act|ons to concentrate on deve|op|ng
prof|tab|e customer re|at|onsh|ps compat|b|e or |ncons|stent w|th the bank's M|ss|on
statement (Lxh|b|t % and Statement of Lth|ca| po||cy (Lxh|b|t 3 %?

@he company Lakes lnLo accounL Lhe cusLomer feedback whlle changlng Lhe sysLem from
funcLlonallLy sysLem Lo process based sysLem Powever conLlnual feedback and revlew
sysLem ls noL esLabllshed @he employees ln lnvesLmenL and lnsurance secLlon should have
been provlded adequaLe Lralnlng @he bank's pollcy sLaLes LhaL lL ensures Lhe uLlllzaLlon of
funds ln legal acLlvlLles Powever no lnsLance/ proof whaLsoever of Lhe same ls presenLed ln
Lhe case @he bank's acLlvlLles dlsplay close cooperaLlon and afflnlLy as well as fellowshlp
beLween workers cusLomers employees and members

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