Are your FP&A tools and processes aligned with your strategic objectives?
To establish a solid Financial Planning and Analysis (FP&A) system for a banking company, several key steps should be taken. Firstly, there must be clear alignment between the FP&A function and the company’s strategic objectives, ensuring that financial planning activities support long-term goals and risk management priorities.
Secondly, the FP&A team should leverage advanced analytics and modelling techniques to develop accurate forecasts and scenario analyses, considering factors such as interest rate volatility, credit risk, and economic trends.
Thirdly, robust data management capabilities are essential, including the integration of internal and external data sources to provide a comprehensive view of the business.
By implementing these practices, a banking company can establish a resilient FP&A system that supports strategic decision-making, risk management, and sustainable growth.
Common challenges
Retail Banking:
Customer Segmentation and Behavior Analysis: Retail banking faces the challenge of effectively segmenting customers based on their financial needs, preferences, and behaviors. FP&A teams need to develop sophisticated analytics to understand customer demographics, transaction patterns, and product usage to tailor marketing strategies, optimize pricing, and enhance customer retention.
Commercial Banking:
Credit Risk Management and Loan Portfolio Analysis: Commercial banks encounter significant challenges in assessing and managing credit risk across their loan portfolios. FP&A teams must accurately forecast loan default rates, analyze sectoral exposures, and monitor loan performance against established credit risk metrics. The challenge lies in developing robust risk models and stress testing frameworks to mitigate potential losses and ensure regulatory compliance.
Investment Banking:
Market Volatility and Deal Pipeline Management: Investment banks operate in a highly dynamic and cyclical market environment characterized by volatility in asset prices and fluctuating deal flows. FP&A teams face the challenge of accurately forecasting revenue streams, assessing market trends, and optimizing resource allocation to capitalize on lucrative investment opportunities while managing risk exposure. Additionally, effective deal pipeline management is crucial for prioritising client engagements and maximising deal closure rates amidst competitive pressures and market uncertainties.
A sophisticated planning system for all your construction needs
Cubewise and IBM Planning Analytics / TM1 provide a highly advanced and holistic suite of solutions for construction companies that want to take their planning and forecasting to the next level. Whether it’s protecting project profitability, performing feasibility studies, measuring ROI, running scenario tests, managing cash flow or optimising asset usage, we can assist you.
If you’re ready to take the next step and supercharge your construction planning and analysis, get in touch today.
Talk to us today and let’s overcome the challenge together.
When a system is unable to adapt to changing business circumstances, it can be tremendously frustrating for all who work with it. Things must go on, of course, and so users will resort to building tedious workarounds, simplifications and shortcuts that only serve to kick the can down the road.
Don’t accept that your business processes are incapable of adapting to fast-moving market changes. Contact us to find out how easy it can be to implement efficient and practical planning, reporting and forecasting workflows.
