Author:Brad Dahlman, firstname.lastname@example.org
Banks and Credit Unions have always had financial reporting. Since the beginning of time they have kept “the books” with a fairly detailed general ledger that tracked the institutions balance sheet and income statement. Over the past twenty years, organizations have begun digging a bit deeper into profitability (below the “total institution” level) – into branch, product and customer/member profitability.
These profitability solutions help financial institutions better understand some key questions like…
Having answers to these questions and managing your institution with profitability in mind has never been more important.
Regulatory Interest in Profitability Analysis
Something new and interesting happened this month…Regulators have started to ask for profitability analysis. In just the past week alone, three clients have approached us for help in understanding profitability based on a regulator examination comment. One financial institutions regulatory comment said:
“Revise the 2011 Business Plan to include, but not limited to the:
Stop and think about that for a second. Regulators are now EXPECTING that you would know which branch and products are contributing to your bottom line and which are not. They are also expecting this information be shared and incorporated into your strategic plan. This means that they will be expecting you to not only understand this information but use it to manage your business. Once these systems are in place the next likely questions are …
Are you Ready?
It was only a matter of time before regulators started asking for more detailed profitability analytics. This increased regulatory scrutiny of earnings and profitability is only going to increase. Are you ready for the regulators? Maybe you’ve been asked for profitability analysis already – share your comments below.
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