Banks can elevate their budgeting and planning methodology with an approach known as collaborative cash flow margin planning.
Budgeting and planning is an onerous task for many banks, as they must focus on all of the components of the balance sheet and income statement to ensure ongoing profitability and operational stability. For most financial institutions, the balance sheet and net interest margin is the primary earnings engine and incentive compensation is often tied to its performance. Yet, many banks struggle to calculate margin contribution in a manner that is both collaborative and precise.
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