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Categories That Fall Under Bank Metrics

Jan 16, 2008
Like all Metrics Systems, Bank Metrics are a set way for banks to quantify their performance. Bank Metrics, like Performance Metrics is to be formulated according to the banks goals as well as the standards that they set for themselves. Banks differ in Goals. Some banks may see customer turnover as basis of success as opposed to some banks that view revenue as item by which they measure their success rate. There are several categories that help banks organize their metrics system report. Below are a few categories that can be found in a bank metrics report. Knowledge of the following will help Financing Heads and Company leaders to better understand the reports that are handed to them.

General Ledger Measurements can be found in a Bank Metric Report. A General Ledger Measurements is considered to be a fundamental analysis that businesses can perform when they are on a normal operating cycle. The data gathered here is noted down on balance sheets and information on the Bank's income statement. This type of analysis is necessary as an indicator of the overall performance of a Bank; it also gives an idea of the financial status of the organization. General Ledger Measurements presents the following data: Average Balance, Income generated from Interests, Non Interest Income and Others.

Account Measurements are also found under a Bank Metrics report. This generally includes the following data: Number of Accounts, Customers as well as the number of households that avail of the services of the Bank under scrutiny. It also includes both the Average Balance and the Ending Balance. Account Measurement, unlike General Ledger Measurements can be conducted on any given time frame. This subtype of bank metrics is also able to cross the border of all types of banks from remote branches to regional organizations.

Another Sub category that is found in a Bank Metrics Report is that of Costing Measurements. Costing measurement is an analysis of the costs of the Bank in General; this subtype gives a view of the Banks income and expenses whether they are operating or non-operating.

Risk Calculation and Measurement is also presented in a typical Bank Metrics report. This will help Bank management to know what their expected losses should be on certain areas. It also discusses general and specific market risks. The General Market risks that are presented by a Bank Metrics report will give banks the opportunity to make similar comparisons. This means that they can compare their actual and expected loss rates with other banks that function the same way as they do.

Bank Metrics and Analytics can be performed by firms that specialize in this activity. Delegating this task to firms will take a huge weight off the shoulders of a bank's finance office. Specialized firms will formulate customized bank metrics that is designed for the needs of a specific bank. Firms also lure clients by promising a 'quick view' report. This means that the data they have collected is easily viewed and understood by Bank personnel that are to review the reports.
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