Integrated performance and risk management: how to actually manage a bank
Release date: 18 July 2024
English
German
How do banks make sure that their income exceeds their costs in the long term? And what do banks need to consider in financial planning in order to remain liquid at all times? The Financial Controlling & Strategic Planning team deals with these and many other questions relating to integrated performance and risk management. As one of the leading strategy and management consultancies of the financial sector, we help our clients and their CFOs to thoroughly control and manage their financial resources.
We are Nina and Raphael and in this post, we give you some insight into our day-to-day work and banks’ integrated performance and risk management. I (Nina) deliberately decided to join zeb and our team after completing my studies in International Economics and my doctorate in Corporate Finance. zeb offers the ideal framework and opportunities to apply my expertise and combine my greatest passions: banking, controlling and management consulting close to the client and in a well-networked team. After my training in the investment fund sector and my studies in Frankfurt and Vienna, I (Raphael) also made the deliberate decision to join zeb and our team. Why? Because this is about the success of the entire company, which requires ongoing and targeted strategic management in a constantly changing market.
Managing financial resources
In the spirit of the zeb founders and the standard work on bank controlling by professor Henner Schierenbeck (“Ertragsorientiertes Bankmanagement” (in English: profit-oriented bank management)), which you may be familiar with from university, our team focuses on issues relating to integrated performance and risk management.
Our clients’ challenges often require methods and concepts that aim to optimize the use of banks’ and financial services companies’ existing financial resources. It is not only profitability that plays a major role here, but also the risk taken and the various requirements for financial companies, e.g. with regard to capital resources and liquidity.
Accordingly, the topics that our team of consultants deals with are wide-ranging and require a good understanding of how a bank actually works.
This often involves strategic questions, e.g.: How can a bank react to declining income or prepare for upcoming challenges raised by new innovative market players such as fintech companies in order to remain successful on the market in the long term? Sometimes, however, the first step is to create transparency so that we can clearly understand how the company actually earns money. Based on this, we can then deal with further analyses and questions that could be relevant for the client’s future.
New challenges in bank controlling
Bank controlling may sound familiar to you, but it does not necessarily sound particularly innovative or exciting. However, new challenges arise and confront our clients – and therefore us too – every day anew, making our day-to-day work very varied and challenging. Almost every area of a bank is thematically linked to bank controlling, and most KPIs are ultimately derived from bank controlling data and methods. In an increasingly agile and digitalized world that is juggling growing volumes of data, ways and means must be found to meet these challenges in the future. We see ourselves as consultants and sparring partners for the entire CFO area.
In the following, we would like to highlight two current topics that are highly relevant to bank management.
1. Omnichannel management – what earnings does my banking app actually generate?
Managing the various digital sales channels has become a new challenge in recent years. Basically, the banks now need to find out which channels make sense and are profitable and what effects they have on customer behavior. Simply looking at app usage figures, for example, is not necessarily meaningful and, above all, sufficient when it comes to weighing further investments in a banking app. Rather, the aim should be to develop an overarching management approach to assess the sales channels and to understand the behavior of customers and customer groups in detail and to forecast it as accurately as possible.
2. How can we sensibly and effectively implement ESG in bank controlling?
It is definitely not an understatement to say that everybody is talking about ESG. And yet in many areas it is not at all clear what consequences each aspect of these three terms actually has for our clients. For example, new regulatory measures on the part of legislators must be observed and legal compliance must be ensured. But how exactly do you do that? Are there already meaningful and effective key figures and regulatory measures for each aspect? How can they be integrated into the contribution margin calculation or the KPI dashboard, for example? And how can you align bank management to become an innovative pioneer in an area for which no real key figures have yet been defined? Dealing with such issues is also part of our work. Together with our clients, we then like to take the next step and use our knowledge to help them integrate relevant ESG aspects into bank controlling that have not even been considered before.
If you are enthusiastic about this kind of innovative management topics, have an affinity for numbers and are not afraid to rethink things, then this is the right place for you.
Are you working in the financial industry and looking to advance your career? Then take a look at the zeb.business school. The inaugural college established by a consulting firm offers innovative and practical training programmes.
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