Axiom EPM Profitability Management
Understanding the key drivers of profitability is a growing need for many community banks. Profitability is at the heart of any banks' long and short-term strategy, and in today's global economic climate and regulatory environment, determining its key drivers is a critical priority. With compressed margins and increasing competition, it is imperative for banks to understand how customers, branches, channels, officers and products contribute to its bottom line.
Axiom EPM's recently enhanced Profitability Management solution provides community banks with greater visibility into their customers, products and organizational units, exposing which segments drive the most significant value to help decision makers take corrective action. Some industry estimates suggest that up to 40 percent of a bank's customers may be unprofitable, so exposing the segments that aren't profitable enables the institution's decision makers to take corrective action.
STAR Financial Bank, a privately held community bank in Indiana with 48 locations and $1.6 billion in assets, uses Axiom EPM's comprehensive profitability solution. As a result, the bank now has complete visibility into which customers, products, channels and services drive the greatest value. Axiom EPM's reporting has allowed the business to have a greater transparency and understanding of profitability and even get to the lowest levels of data and roll that up into specific segments.
Axiom EPM's Profitability Management system starts at the transaction level, enabling banks to:
- Capture profitability for individual customers.
- Generate full profit and loss reports for any dimension.
- Process millions of transactions necessary to calculate a P&L even at the lowest level.
- Prepare shared service calculations and charge-back statements for IT.
- Create a spectrum of analytical reports and analysis, including segmentation, ranking, slicing and dicing.
- Calculate risk adjusted return on capital for any dimension through an allocation of economic capital.