Sunday, August 7, 2011
How Bank can Control Internal Transfer Rate -2
In practice, agencies often complain of excessive levels. They face the price war generated a better distribution of offers on the market and often use the waiver system to maintain or expand their portfolios client. Salespeople do not see a sign in the TCI arguing that the competitiveness of a TCI unit operation does not enhance the profitability of the customer relationship as a whole.
The profit margin is very important to implement the development strategy of the Bank. Yet the results are often heterogeneous because of the multiplicity of stakeholders and the synchronism of the calculations. Thus during the formation of the commercial offer, the account manager is based on a grid giving along different axes (rate type, maturity, options ...) the rate of the product. This grid does not know the actual margin generated by the operation. This is calculated a posteriori (stock) with the exact characteristics of the operation. This discrepancy explains in part the discrepancies in the results presented by the commercial world versus the financial sphere.
Senior management must have coherent and unique dashboards. This coherence can only come from a good articulation of the calculations a priori / a posteriori. It is therefore necessary to develop processes and tools that do not just needed for each function (ALM, Controlling, development) but that cover, in aggregate, all the needs.