Business — Banking — Management — Marketing & Sales

Different Levels and Needs of Monitoring

Category: Strategy Implementation

Not a single standardised target

Depending on their positions and functions, the people responsible of a bank’s management, either at the head-office or at a branch level, have different objectives. They have various needs of monitoring and request customised tools to exert this monitoring.

The tools have then to be designed to produce what is expected:

By each person

According to his (her) specific needs

With a specific time horizon

Different users

A bank’s general manager would need a synthetic reporting, allowing him to quickly visualise what is going well, or wrong. The main monitoring indicators would be profitability figures, before and after risk adjustment.

A chief financial officer would also be interested by global figures for the group, but with more indicators (treasury position, accounts receivable, bad debts, revenues and costs).

At a branch level, or for a product manager, the monitoring tools would again be different: details about clients, products, turnover, revenues, costs and margins. For instance, a product manager would probably like to have the last status of the files in negotiation (for instance, a list of all the trade finance trades in progress, with an indication of their current state).

Different time horizons

Most of the users would need a daily reporting. This one will focus mainly on revenues and, for the head office, on a treasury position. Other information, such as costs and bad debts, will generally be updated only on a monthly basis. If a daily report includes an indication of profitability after costs, these ones can be estimated (costs of the last month, put on a daily basis, or costs such as expected in the budget). The revenue appearing on the daily reports are those of the day before. Extrapolation of month-end figures (taking the total, for the month, of all the actual figures, and extrapolating to result up to the end of the month) are useful indicators too, when compared to budget and previous figures. They allow judging quickly if potential results are in line with the expectations.

Weekly reports, when requested, will contain more information. At a branch level, it could be an information about the number of contacts or meetings with potential clients, the number of clients opening an account, detailed operations by type of products.

Monthly reports are very good tools to highlight the real trends in activity, profitability and payments due by the customers. The information available on monthly reports will not be anymore estimates, but actual figures such as appearing in the accounts, and after all adjustments and corrections. A monthly report will be used to decide of a corrective action. It has therefore to be produced as quickly as possible (ideally, within two weeks after the end of the month), to be analysed carefully by all the people concerned.

Monthly reports usually present comparisons (with the figures of the same period of the year before and with the figures forecasted in the budget).

Quarterly and yearly reports are generally not the monitoring tolls of operational managers, who need more frequently updated information. They are more useful for some head-office functions, such as accounting.

Different levels of detail

As a consequence of what has just been said, the level of details requested will vary from one user to another and to one time horizon to another.

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