Sunday, August 7, 2011

How Bank can Control Internal Transfer Rate -4

The TCI should be calculated and stored in the SI as the implementation of the operation to be exploited in the management tools of the trade act. This would also ensure consistency of refunds to the dashboard used by senior management. Of course, this also requires a vertical integration of all impacted reference: Product size / dimension structure / customer dimension. This target is difficult to achieve in the short term, however, according to their priorities and constraints, banks can already move to intermediate systems. For example, the establishment of an exchange system between the distribution and the calculation system (ALM) would ensure the inclusion of the real characteristics in the calculation of TCI. Although the TCI is not preserved, it can be recalculated to the same using the same parameters (market data, contract data), known at the time of the request. Thus, the joint calculations a priori / a posteriori would be consistent.

Other improvements could be made to the establishment of a TCI approach. For example, the business may wish to have a global vision allowing him to integrate the risk profile of the customer in managing the commercial act.
Propose systems to measure the performance of activity based on risk and include operating costs would also be an area for improvement.

The work of coherence and sophistication will make TCI a real management tool for profitability and not just a constraint for a single measurement.