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by Crystal Bueno

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  • DTCC's Insurance & Retirement Services

  • Senior Advisory Board Meets to Discuss Automation, Standardization and Regulation

  • DTCC’s Insurance & Retirement Services (I&RS) business expects that by year-end its “bundled pricing” model will have returned almost $1 million to customers, as well as contributed to the dramatic adoption of IFT Access, an I&RS product introduced last fall.

    IFT Access is a stand-alone online data-entry request and confirmation reporting tool for In-Force Transactions. Bundled pricing, a unique incentive rolled out to the industry last October, cuts customers’ overall operational costs of doing business with DTCC by giving them a discount on their use of certain I&RS products while at the same time providing an incentive to adopt newer offerings. The incentive offsets customers’ use of growth-category I&RS products and services, such as IFT Access, with a billing credit toward the core products and services they use.

    “The I&RS pricing strategy reflects our commitment to customer satisfaction,” said Adam Bryan, DTCC managing director, I&RS. “Over the past three years, during a period of sustained pressure on profits across the industry, I&RS has delivered millions of dollars in fee reductions back into the P&Ls of our customers.”

    Product adoption

    Year-to-date, IFT Access has processed more than 4,000 transactions, and the product is now used by 9 carrier families and 15 broker/dealers.

    “After bundled pricing provided customers with a billing credit incentive, uptake accelerated sharply,” said Briana Moskovic, DTCC manager, I&RS Relationship Management. “Firms recognized that the financial roadblocks that might otherwise have delayed their adoption were effectively eliminated.”

    How it works

    Currently, the bundled pricing discount applies to two administrative transactions in IFT Access, which allow distributors to make changes in the BIN (Broker Identification Number) and REP (Registered Representative) fields:

    • The first $350 worth of changes in the BIN and REP fields each month are processed free of charge.
    • Customers receive a credit equal to 30% of the amount of BIN and REP fees paid each month net of the $350 discount
    • This credit is applied against each customer’s fees for I&RS core products (Positions, Commissions, Financial Activity Reporting, Applications, Subsequent Premiums and Asset Pricing).

    Future expansion

    I&RS is reviewing the bundled pricing model with customers and with DTCC Finance, and is looking to possibly expand the incentive, as appropriate. The business hopes to both increase the percentage credit on BIN and REP and, at the same time, expand the incentive program to include credit for more new Access products, such as LNA Access and other new product offerings.

    “Our ongoing dialogue with customers is a key driver in establishing our fees,” said Patti Elliot, DTCC manager, I&RS Relationship Management. “We began offering the credit in connection with usage of new products to compensate firms for any development costs they may incur.”@

    [To learn more about I&RS and the bundled pricing incentive, contact your relationship manager.]