Financial Score Cards

Shrinking budgets and corporate efficiency initiatives are making the scorecard a popular mechanism for measurement in the banking industry. A branch scorecard is nothing more than a monthly or weekly report showing metrics particular to each financial unit. To allow for consistency the metrics have to be standard for all business units measured. In addition the scorecard has to show trending so with each update the previous month's numbers have to be listed as well. A popular platform for displaying a scorecard is the intranet. With the intranet a large number of people can consistently view the scorecard. Executives can use a scorecard to hold managers accountable for their branch operations. With this tool an executive can identify the areas of concern for each branch. For example when looking at the number of transactions per FTE the two variables that can be used are 1.The number Tellers 2. Number of teller transactions. Using the number of employees as the Numerator and Number of Teller Transactions as the Denominator one can create a ratio. This ratio will be used to see if the branch unit is operating over capacity or has too many tellers compared to other branches. One has to take into consideration the demographics of a particular branch when evaluating the scorecard metrics. If one branch is located close to a university the number of new accounts will be significantly higher compared to a branch with no demand for new accounts. This can skew the scorecard and create swings in demand from branch to branch. Open communication with the branch manager of that branch can explain differences in rations.