Thoughts from Madrid #2: Pricing and Customer Value Optimization – Is it Fair?

(Posted by Guest Blogger Barak Melnik)

Another popular topic at the Madrid conference was the question surrounding the fairness of differentiating prices, services, and offerings based on customer characteristics. “I am not sure I would like it if my bank offered a lower loan price to someone who has the same exact risk level as me.” “Once customers will find out there is price discrimination between regions in the same bank they will rebel”. Needless to say, I received many questions about the regulatory compliance of price optimization.