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6 challenges faced by financial institutions in financial reporting and performance management

by Simon Goble on September 22, 2015

Topics: Financial Reporting | Performance Management

Financial reporting and performance management should be business-empowering processes, not laborious, ongoing tasks. So if you can relate to any of these, you should consider changing how your business handles and uses financial data.

  1. A lack of financial performance information

There is often one recurring challenge, which is core banking system agnostic; getting meaningful intelligence from the data held within the core banking system. By intelligence I mean the ability to monitor trends in individual product lines, to measure product profitability, to construct a branch balance sheet and income statement so that you can measure the performance of the branch vs. target. We all know that the data is sitting there in the core banking system, so why on earth can’t we just get it out and put it into a set of management reports every day and at month end?!

  1. Too many spreadsheets

How do you distribute these to the management team, line of business owners, branch managers and relationship managers?

There is no way to really know if everyone that should have seen the data has seen it.

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Why are the numbers different on everyone’s spreadsheets? What version are they looking at? Wouldn’t it just be easier if everyone was looking at the same numbers? A single version of the truth.

  1. Key man dependency

Someone knows how to do it. Someone has developed a process that gets data from the system, into another database, which feeds a spreadsheet. Then something magical happens to it before it makes an appearance in your inbox. But what did they do? What happens if they leave?

Dependency on a single person can be extremely problematic. If this person leaves your company, or is absent for even one day during a crucial time, it can be seriously disruptive.

  1. Accuracy and timely arrival of monthly management reports

The management reports could be way out of date before management get their hands on them to begin analysing. The finance team are required to close out the month end and make manual adjustments before publishing answers that could be right but if you're not 100% confident then this is a real financial control issue.

  1. Difficulty in getting users to adopt and interact

Creating performance information such as a branch balance sheet and income statement and the ability to calculate branch efficiency ratios along with branch profitability ratios would enable analysis of performance and would help determine what the branch managers and account officers can do to improve their branch performance. They need to be able to measure their performance as part of an ongoing process but this can be difficult to achieve if everyone involved in the process is not using the same software.

  1. A lack of control over daily financial reports

If the finance department could be analysing financial reports on a daily basis then they could reduce the number of surprises and investigations at month end, shaving a significant amount of time from the month end close process, thus producing monthly management reports on day one or two of the new month rather than days ten to fifteen.

Why not give the management team, line of business owners, branch managers and account officers access to financial performance software and banking BI applications that can automatically produce their bank performance ratios for them, whilst enabling finance to perform bank balance sheet analysis, all from a single version of the truth?

Our purpose-built financial performance software can help empower your organisation. Discover how Banking Business Intelligence can improve financial performance, reduce costs and help you make more informed decisions - download our guide here

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