Infinity Bank Memorandum

TO:                                                                                                                         DATE:

FROM:                                                                                                                      ITEM NO:

SUBJECT: ANALYSIS OF THE KEY FINANCIAL SOLUTIONS FOR INFINITY BANK

ISSUE:

The Infinity Bank is facing challenges due to major structural and managerial changes in the banking sector. The bank is taking steps to boost its customer and product profitability through various studies, such as, the product profitability analysis and customer profitability analysis (CPA). We need to evaluate and understand the main cause of our failures and come-up with effective solutions that will drive the success of the bank.

Recommendations

1.  This study recommends that Infinity Bank managers should reject the proposed supermarket strategy and implement the CPA findings to help the firm gain a competitive edge. On the other hand, the product profitability analysis provides numerous benefits for the success of Infinity Bank, but it should not be considered into its long-term reform plan. Cross holding consumers are presented to be more profitable, and thus, Infinity Bank managers should create an incentive system encouraging consumers to buy multiple products.
2. Consequently, the managers should provide incentive promotional offers that aim to upgrade the "CA only" consumers to the other 3 consumer segments by centralizing operational services and transferring specific transactional charges to the consumers. They should also adjust the bank s policies to lower credit and raise interest rates for credit card and mortgage default consumers.