We studied customer cost accounting based on customer relationship (Relationship-Based Costing: RBC) in banking institute in Japan. As a result of the research, it was found that lowering the customer cost is more suitable for management as deepening the relationship with the customer. In customer cost calculation by ABC (Activity-Based Costing) so far, customer relationships such as familiarity level and confidence were not particularly taken into consideration.
In this research, we first modeled by considering five possibilities that customer relationships affect customer cost. In other words, by increasing customer relationships, we created a model that reduces customer costs by "cost reduction before trading" "credit cost reduction" "transaction cost reduction" "transaction standardization" and "self-service". Next, we applied RBC to Japanese banks that are applying ABC for more than 10 years, to judge suitability for customer profitability decision making. Specifically, we compared customer profitability by RBC and existing ABC, and judged which one is more satisfied with the practice. As a result, the satisfaction of customer profitability by RBC was found to be generally higher than that by ABC.
Customer Costing; Activity-Based Costing (ABC), Relationship-Based Costing(RBC), Customer Profitability, Managerial Accounting in Bank, Bank Costing