Making the most of margins: How FTP sets business value free

What happens when NIM gets thin? Financial institutions have watched their net interest margins (NIMs) shrink for more than 20 years, and the reasons are many: historically low interest rates, a flattening yield curve, and a shift in balance sheet structures. (Figure 1 demonstrates this protracted, troublesome trend.) Though interest rates are slowly beginning to climb, and Read More

By |2020-05-27T17:59:36-05:00October 16th, 2017|Comments Off on Making the most of margins: How FTP sets business value free

Change is in the air: Why banks are leaving money on the table

Again and again, banks have been warned: FinTech startups will disrupt established financial service organizations and steal business, customers and profits. One analysis predicts that 60 percent of traditional banks’ profits and 40 percent of revenue could disappear by 2025. Another report claims that, in the lending arena, more than one-third of revenues are at risk if Read More

By |2020-05-27T17:59:48-05:00March 2nd, 2017|Comments Off on Change is in the air: Why banks are leaving money on the table

Leveraging customer data through the core

One of the central problems banks face is that, despite the wealth of information available to them, there is still much they do not know about their customers. For example, a customer might have a checking account and a car loan with your bank. This means you have a wealth of information on the customer’s daily spending Read More

By |2020-05-27T18:00:12-05:00April 20th, 2016|Comments Off on Leveraging customer data through the core

Deposit profitability as key to branch profitability

Deposit spreads have been the bane of banks in recent years but that could change if interest rates continue to rise. Here’s why bankers should pay more attention to their deposit balances going forward:In the summer of 2006, the Federal Reserve ended a two-year binge raising the Fed Funds Rate, which had soared from 1% to 5.25% Read More

By |2020-05-27T18:00:13-05:00March 18th, 2016|Comments Off on Deposit profitability as key to branch profitability

Funds transfer pricing for profitability measurement

While bankers have generally become more sophisticated in their understanding and execution of profitability analysis, all too often, they are limiting their potential for success by failing to utilize tools such as funds transfer pricing (FTP) to their full capabilities. Many bankers are already familiar with FTP, often leveraging it to measure the net interest margin at Read More

By |2020-05-27T18:00:14-05:00February 24th, 2016|Comments Off on Funds transfer pricing for profitability measurement