3 Agile Planning Hacks for Finance Teams at Banks and Credit Unions

September 18, 2020 Evan Webster  
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Finance teams at banks and credit unions face a number of unique challenges. You need to stay ahead of shifting market conditions, mitigate risk and help your organization deliver a strong ROI for customers—all while dealing with a laundry list of regulatory compliance requirements. Finding ways to be agile so you can better serve the business is critical, but that's easier said than done with so much on your plate already.

As you consider how your team can streamline planning processes to be more flexible, you might ask yourself: How can we adequately prepare for events such as interest rate shocks and market downturns? How can we measure key business metrics—assets under management (AUM) and return on assets ratio (ROA), for example—in real time? What’s the best way to disclose our earnings information and build trust with management, investors, regulators and the public?

While there’s no simple answer to any of these questions, one thing is certain: Agile planning in the banking industry requires a seamless connection between people, processes and technology—especially in the face of ever-present change.

In this blog post, we’ll look at three simple steps your finance team can take to streamline key planning processes so you're faster and more efficient:

We’ll also explore some examples of financial institutions like yours who have found success with these hacks and built stronger businesses as a result. 

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Use Integrated Templates for Net Interest Margin Planning

Monitoring interest income is a crucial aspect of the strategic planning process. As the primary source of revenue for all banks and credit unions, you must always keep an eye on your interest margins—right down to the individual product level. You also need to forecast anticipated rate changes in real time to ensure your evolving business plans are as well informed as possible.

However, if account balances are siloed in your enterprise resource planning (ERP) or asset liability management (ALM) system, you won’t have an easy way to identify your most profitable financial products. Instead, you’ll have to dig through a bunch of spreadsheets to find the data you’re looking for—and that’s why having one source of truth is so important for net interest margin planning.

By integrating your source systems, automating data inputs and using purpose-built templates for your actuals, forecasts and scenario analyses, you’ll get a holistic view of interest income within one secure platform. You’ll also be able to back up your business projections with per-product revenue estimates relative to prime lending rates and yield curves. That way, your leaders will have what they need to make timely, data-driven business decisions without all the manual effort.

The finance team at ATB Financial—a retail and commercial banking chain in the Canadian province of Alberta—offers a best-in-class example of agile interest margin planning in action. With Vena for Banks and Credit Unions, ATB’s finance team tracks consolidated revenue figures for more than 100 unique banking products. Up-to-date data at their fingertips makes it easy to quickly determine whether actual versus budget differences are due to margins or price/volume variances. It's given ATB the freedom to update budgets whenever they need to and to plan a lot more confidently with a level detail they didn't have before.

Streamline Regulatory Reporting With Repeatable Workflows

There are few industries in the world subject to greater scrutiny than banking. Financial institutions in particular are subject to increasingly stringent regulatory reporting requirements, which isn't easy to navigate if you're doing everything manually.

However, if you simplify your reporting cycle with automated consolidations and data entries, SEC filings will feel like a breeze instead of a burden. The same logic applies to larger institutions for CCAR reporting and DFAST submissions. You need to design efficient processes that are easy to understand and execute.

But efficiency is often difficult with regulatory reporting, given how collaborative the process really is. If budget owners, managers and executives all need to sign off on every filing, you might have multiple versions of the same template floating around in emails. You need to align your stakeholders and define their roles in the reporting process—and that’s where custom workflows really come in handy. They allow you to assign tasks based on individual roles and security permissions, while also ensuring your reports are done quickly, accurately and with a fully trackable audit trail. As your team repeats the process for each subsequent reporting cycle, speed and realiability will only get better.

Terry Hardy, former Manager of SEC Reporting at Wells Fargo, has first-hand experience with the benefits of repeatable workflows. He helped implement Vena at the banking giant in 2012, overseeing all aspects of regulatory reporting until his retirement in 2019. With Vena for Banking and Credit Unions, Terry was able to:

  • Automatically detect variances between reporting periods
  • Track changes to SEC filings and reporting templates with detailed audit trails
  • Develop an regulatory reporting framework built on teamwork and cross-functional collaboration

Empower Your Leaders With Dashboards for Data Storytelling

Have you ever prepared for a meeting with your board or asset-liability committee, but didn’t quite know how to tell the story behind your numbers effectively? You’re probably not alone, because with so many external reporting requirements in the banking and financial services industry, it can be difficult to determine which KPIs to focus on internally while also communicating impact to the right stakeholders in the right way.

But regardless of what metrics you use to define success—whether it’s AUM over benchmark, ROA, ROE, sales per branch or others—how you deliver that data is what’s important for driving performance. Effective data storytelling with easy-to-read dashboards is the key to engaging stakeholders and sharing actionable insights wth agility. After all, numbers on a spreadsheet aren't all that engaging, especially to executive leaders who just want to see the big picture. If you can actually show stakeholders the numbers with beautiful graphs and charts, you'll influence more confident decision making throughout every stage of your planning cycle.

When built well, dashboards allow you to identify relationships between key metrics, provide a visual representation of earnings and maintain complete transparency across the entire organization. As you work to execute your business plans, dashboards give you real-time indicator of emerging trends and performance—making it a lot easier to pivot and adjust your course if necessary.

Enova International—an online financial services firm with more than 1300 employees around the world—does a really great job turning numbers into insightful narratives. The finance team maintains agility by releasing “flash reports” in Vena at the beginning and end of each close period, which gives management a live look at interest margins and cost of revenue. Vena’s real-time dashboards provide context and helpful reference points, making it easy to track the evolution of those metrics as the business grows.

Finance teams at banks and credit unions will always have to deal with complexity. But by taking the steps above to integrate net interest margin templates, streamline reporting workflows and build real-time dashboards for effective, data-driven storytelling, you'll find the flexibility you need to drive improved performance and efficiency across the business.

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