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Banking Institution's Financial Planning System Tracks Operational, Financial goals |
The Business: With coast to coast branches in California, New Jersey, New York and Washington, the Company is one of the first banks to operate both in the Eastern and Western United States. With nearly $2 billion in assets, the Company is committed to providing premier banking services to business enterprises, merchants, and individual customers.
The Challenge:
The Company used a legacy accounting system and Excel work sheets to keep track of budget numbers. Different file versions and lack of an effective tracking system made the budgeting system ineffective. Reporting was done only at financial statements level. There was considerable gap between budgeting, budget-to-actual comparison and pro-active decision making to correct variances. Management was facing a challenge with making employees responsible for budgeting and to complete the budgeting process in a timely manner. There was little pro-active follow-up on budget variances. There were no reports to the management and actionable data was sitting in the databases. The bank also needed to manage allocation of common business expenses on a pro-rata basis.
The Vision:
The Company needed a reliable budgeting system that collects budget numbers from disparate operating units in a timely manner, and allowed users adequate access privileges pertinent to their division and responsibility level. The system should allow the bank to effectively track its financial performance by budgeting loan production, deposits estimation, expense forecasting. It should create financial statement projections and other detail level projections for financial statement items. The Executive VP of Finance should have an overall view of completed budgets. A combination of real time budgeting and periodic reporting would help the bank manage its’ growth and identify new areas for improving profitability.
The Solution: Cognos Planning: Analyst and Cognos Planning: Contributor were installed at the Company location. Based on extensive analysis of existing planning processes and future needs, detailed financial planning models were developed to accommodate the bank’s complex revenue and expense items including amortization of loan costs and Fund Transfer Pricing. Further, Cognos Transformer and Cognos PowerPlay were installed to enable data to be published from the planning application to the Cognos UpFront portal. End users can input data on the web while the planning tool performs all the calculations based on the built-in model at the back-end. The resulting reports are published on the Cognos UpFront portal. Role based security is implemented such that only those users with sufficient view rights can download the appropriate reports.
The Results: The Company is in a position to know precisely which business units have completed and submitted their budget numbers. The concerned executives can approve or reject or modify the budget submissions. The data can be reported and prompt action can be taken to ensure that budget targets are hit for faster growth.
The Tools: Cognos Planning: Analyst, Cognos Planning: Contributor, Cognos PowerPlay, Cognos UpFront, and Windows 2000. |
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