The Capco Institute's 'Journal of Financial Transformation' Looks at the Challenges of Developing Effective and Accurate Pricing Models for the Financial Services Industry.

LONDON -- "The most advanced pricing models and strategies are still not totally accurate." -- Dr. Shahin Shojai, Director of Research at Capco

Pricing for the financial services industry is a complex task that becomes more difficult with each new instrument, service and asset structure in the market. Prices for widely traded, straightforward instruments are relatively easy to ascertain and interpret, but once the instrument is unlisted, unconventional, or unknown to the public, the concept of "fair value" becomes highly subjective. This situation is exacerbated by evermore customized services, new to financial services, which must be priced competitively.

Capco, the global financial services and technology solutions provider, is pleased to announce the publication of the 13th issue of The Capco Institute "Journal of Financial Transformation," which is dedicated to the (r)evolution of pricing in all its facets and looks at the latest most advanced pricing models and strategies. The Journal is available online by registering at www.capco.com/journal.html.

Bill Irving, President, Capco, and an advisory editor of the Journal of Financial Transformation, states, "Financial institutions face a myriad of challenges, from increased regulations and commodization of products and services, to intense competition from a growing list of competitors locally and beyond. These factors have resulted in shrinking margins across the industry. As a response, institutions are developing new methods to distinguish their offerings from those of their peers. One component is customization of pricing, an area which will increase in importance as margins continue to be pressured. That is why I believe the current issue of the journal is very timely. It allows executives at major global financial institutions to view in one place how the best in the business utilize these pricing optimization tools and assess which one is most suitable to their specific circumstance."

Dr Shahin Shojai, Director of Research at Capco and Editor of the "Journal of Financial Transformation" said, "This issue provides the reader with a unique window into the many different advanced pricing methodologies that the most respected experts have developed. While articles on pricing can be found in most high-level journals, it is rare that such an array of wonderful papers is aggregated within one issue. However, despite the great strides taken by authors of this issue, the most advanced pricing models and strategies are still not totally accurate."

The Nobel Laureate section of the Journal features Professor Robert A. Mundell, Professor of Economics, Columbia University, and Winner of the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel 1999, who discusses the benefit of a single global currency.

Contributions to the Journal cover three main areas of discussion: "services," "real options" and "assets." Some of the articles which feature in this issue of the Journal are:

--Mergers and acquisitions as a response to economic change - Bart M Lambrecht, Professor of Finance, Lancaster University Management School 

--Valuing real options: Frequently made errors - Pablo Fernandez, PricewaterhouseCoopers Professor of Corporate Finance, IESE Business School, University of Navarra 

--Venture investment contracts as baskets of real options - Didier Cossin, UBS Professor of Finance, IMD; Benoit Leleux, Stephan Schmidheiny Professor of Entrepreneurship and Finance, IMD; Entela Saliasi, FAME and HEC, University of Lausanne 

--Propensity-based pricing - Keith MacDonald, Partner, Capco; Simon Caufield, Managing Director, Nomis Solutions

For further information, interviews with authors, approvals to excerpt or cite articles, and to receive hardcopies of the Journal of Financial Transformation, please contact:

US/Global: Samuel Wang ([e-mail])

UK/Europe: Louise Merrett ([e-mail])/ Martin Forrest ([e-mail])

About The Capco Institute

The Capco Institute is the focus for the creation and management of knowledge and professional development. The Institute commissions and publishes original research and leading thinking. It is an umbrella for Capco's research and development, and it sponsors training and development both for use within, and externally to, Capco. Through the editorial board of its "Journal of Financial Transformation," the Institute also maintains productive relationships with academic partners around the globe.

About Capco

With subsidiaries in North America, Europe and Asia, Capco is the leading global provider of integrated consulting, processing services and products, engineered by financial services experts exclusively for the financial services industry, particularly in Capital Markets, Private Clients and Asset Management, and Banking. As pioneers of new ways of transforming operational capability and efficiency, it helps clients successfully increase revenue, reduce costs and enhance control. For more information, please visit www.capco.com.