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Challenge
The current set back in stock exchange trading is hitting not only investors but also private banks hard. Competition in personal banking is increasing and getting more and more international. In several cases highly lauded strategies like internet-banking or direct-banking proved not to keep what they promised.
Decisions must now be taken that require the knowledge of where profits are made and where risks are located.
Solution
Only up to date and detailed information on the bank's performance - if necessary down to a single account - can support the management in:
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 | Identifying which branch / distribution channel is doing better than others - and why |
| Judging whether a new product launch was successful |
| Analysing key customer relationships regarding profitability and cross-selling opportunities |
| Setting prices competitively and knowing exactly where limits for pricing activities are |
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Modern banking theories of profitability oriented bank management provides the theoretical basis for profitability analysis based on single transaction costing. Additionally the software industry has in the last years brought to market packaged systems that allow the efficient implementation of IT support for profitability analysis in banks.
Our Approach
Our approach starts with the development of a profitability analysis concept as the basis of the bank's MIS, which allows bank management to actively control and direct the activities of the bank by analysing its results - where appropriate on a single transaction basis. The concept addresses issues like:
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| Overview of Reporting |
| Dimensions of Analysis |
| Product Categorization |
| Calculation Methods |
| Cost Allocation Aspects |
| Risk Return Control |
| Planning |
| Data Analysis |
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After the requirements are defined in such way we may support the selection process of a suitable software package and if so required support the implementation of the selected system.
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