Dashboards for Banks
This article will focus on the many types of Dashboards for Banks that are being used today to improve bank performance.
Definition: According to Wikipedia, dashboards often provide at-a-glance views of KPIs (key performance indicators) relevant to a particular objective or business process (e.g. sales, marketing, human resources, or production). In real-world terms, “dashboard” is another name for “progress report” or “report.”
Often, the “dashboard” is displayed on a web page that is linked to a database, which allows the report to be constantly updated. For example, a manufacturing dashboard may show numbers related to productivity, such as number of parts manufactured or number of failed quality inspections per hour. Similarly, a human resources dashboard may show numbers related to staff recruitment, retention and composition, for example: number of open positions or average days or cost per recruitment.
Likewise, there are many types of dashboards for banks, and each one has a specific purpose. Below is a good summary of the various types of dashboards that was listed by an article published by Collabera:
– Review the past, current and future state of the bank
– Deliver financial information to management to improve the quality of their key decisions
– Give operational management much more time to analyze numbers and perform profitability and margin analysis
– Generate daily feedback versus periodic reports for quicker monitoring of campaigns
– Track operational measures on a constant basis, such as Service Utilization, Sales Team Performance, Credit and Operation Risk
– Drill down capabilities into almost any performance measure for quick insights
– Measure the effectiveness of major new products and pricing policies
Past, current, and future state of the bank –General ledger data reviewing the basic financials of the bank typically comprises this type of dashboard. Performance metrics for the current period, such as net interest margin, non-interest income and expense, loans, and deposits, are compared to the same period for last year.
Empower users to improve quality of financial information – In addition to the state of the bank, dashboards now allow key decision makers to update the forecast of the bank. If interest rates changed or there is an economic downturn, the current budget assumptions need to change quickly. Having the ability to update and modify a current forecast of the bank is crucial in being able to make pertinent decisions going forward.
Give operational managers more time for analysis – Many operational managers are judged on various metrics that used to take several weeks to calculate. Such measures include cost per service rendered, like the cost of a deposit at a teller window, or the cost of an ACH item to post a payment. Dashboards for banks can now display these calculations on demand with raw data just a drill down away. Rather than spending weeks calculating numbers, managers can now spend time on correcting deviations and improving performance.
Daily feedback versus periodic updates – Banks are constantly running product campaigns in various geographies, and they need immediate feedback as to what is working and what is not. For example, they may be running a home equity loan campaign in their Los Angeles market and a CD campaign in their Boston market. If they are not getting the loan balances they want or are paying too much interest expense on CDs, they need to know now before weeks of this bad performance can negatively affect the bottom line.
Quick overview of operational information – Loans per FTE, service charges waived, loan interest rate exception pricing, and many other measures are used to see if the bank’s operations are running smoothly. If a measure starts to wander from the stated goal, the bank has plenty of time to take corrective action. For instance, a branch may be falling behind in a home equity loan campaign, and the decision is to either cut pricing or add another sales person. The earlier that the bank has this information, the quicker they can make improvements.
Ability to drill down into various measures – The days of picking up a phone and calling the accounting department for journal entries or the credit department for a list of delinquent loans are over. Senior management can now drill into data on a dashboard and get the information they need with a click of a button. Loan yield on new production for the Denver branch may be down, but a drill down might show that a special rate was given for that new multimillion dollar loan to the city for a new highway.
See impact of campaigns quickly – a common trick to raise funds for a bank is to offer CDs at a special rate for odd ball terms, such as 13 months. Prospects looking for better rates flock to these campaigns, and lots of funds are raised. When the CDs roll over after the 13 months, they will default into the shorter term and lower priced 12 month CD. Banks want to know how many dollars stuck and how many left the bank to find better rates elsewhere. If all the dollars left, the campaign was a flop.
There are so many other types of dashboards for banks that can be explored. A short list of them covers credit risk, loan originations, delinquencies, charge-offs, Basel II, operational risk, market risk, and enterprise risk.
Who can help? The field of vendors offering dashboards for banks is getting crowded these days. If you are a small organization and need just a couple of dashboards connecting directly to only general ledger, loans, and deposits, a couple of solutions come to mind. Spreadsheet Server by Global Software, Qlik Sense® Desktop by QlikTech International AB, and BI360 by Solver are tools that can be up and running in just a day or two and can yield reports quickly.
If you are a very large enterprise that is looking for an enterprise-wide solution that connects many different data sources and allows for updates to budgets and forecasts, you might consider IBM Cognos by IBM, SAP BusinessObjects by SAP, Oracle Business Intelligence Enterprise Edition by Oracle, and again, BI360 by Solver.
No matter what size company you are today, BI360 by Solver is a solution that will grow with your company and complexity, as the solution is very scalable. Solver, Inc. is happy to answer any questions and generally review BI360’s easy-to-use, Excel-powered reporting and dashboarding solution for banking and finance industry users. Get rapid feedback on how your organization is performing today with dashboards, and update budgets and forecasts quickly, so you can improve results now and not months after that fact.