Shortcomings in Balance Sheet and Margin Planning Is Limiting Financial Institutions’ Profitability, Axiom EPM Reports

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Latest white paper highlights challenges of traditional approaches to planning and analysis.

“Collaborative Cash Flow Margin Planning effectively draws from both disciplines to create a methodology that is more precise, collaborative, focused and insightful for financial institutions.”

Axiom EPM, a leading provider of financial planning and performance management software for enterprises, reports that despite expending a great deal of time and effort in preparing the margin component of annual budgets, many financial institutions still lack confidence in the quality of the plans created. This presents a significant business issue within the industry as financial institutions’ earnings and incentive compensation is often tied to margin contribution and performance.

Axiom EPM’s white paper, “Take Bank Planning To The Next Level – Cash Flow Based Budgeting & Forecasting,” addresses the issue of traditional financial planning and analysis (FP&A) directly, outlining how the disconnect between Asset Liability Management and Finance/Budgeting is negatively impacting financial institutions’ profit margins.

The paper presents a more collaborative alternative to traditional approaches to planning the balance sheet. By using collaborative cash flow margin planning, financial institutions employ a methodology that effectively addresses and overcomes the shortcomings of the traditional FP&A model by eliminating the disconnect between Asset Liability Management and Finance/Budget planning. By leveraging this approach, financial institutions can:

  •     Introduce a greater degree of precision and accuracy to balance sheet, yield and income forecasts;
  •     Better engage line of business managers, ensuring greater accountability and ownership in the planning process;
  •     More clearly distinguish new books of business from existing ones, improving business insight;
  •     Improve product mix and pricing for individual local markets; and
  •     Better measure the contribution of each business unit from a planning perspective, providing greater insight into funding center activity.

“Historically, Asset Liability Management and enterprise budgeting have had very little in common despite both having a pivotal role in projecting balance sheets and net interest income and margin,” said Ken Levey, Industry Vice President, Financial Institutions for Axiom EPM. “Collaborative Cash Flow Margin Planning effectively draws from both disciplines to create a methodology that is more precise, collaborative, focused and insightful for financial institutions.”

To access the full paper, “Take Bank Planning To the Next Level – Cash Flow Based Budgeting & Forecasting,” visit http://ow.ly/l4xv2.

About Axiom EPM
Founded by industry leaders with over two decades of experience in enterprise planning and reporting, Axiom EPM delivers performance management solutions for mid-sized and large banks and credit unions around the world. Solutions for budgeting & forecasting, reporting & analytics, strategy management, capital planning, profitability & cost management are delivered on a single unified platform. Axiom EPM embraces and extends familiar Microsoft Excel® functionality, allowing finance professionals to manage data in a familiar environment – while providing unmatched modeling flexibility and enterprise performance. http://www.axiomepm.com

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Lauren Schuster
William Mills Agency for Axiom EPM
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