Profitability is important in the banking industry today to identify which customers contribute to your bottom line and which are costing you money, which grows increasingly difficult as banks have less direct contact with customers in the digital environment.
Margin and Profit Performer together provide a consistent, independent measure of income and expense on each deposit and loan. Funds Transfer Pricing, an industry best-practice method, is used to determine the Net Interest Margin. Profit Performer builds on the profitability model to include fee income, interchange revenue, and a cost allocation based on your General Ledger; The system applies activity-based costs, risk-rated provision for loan loss and capital allocation to see a risk-adjusted return on capital. All aspects of the model can be tailored to best fit your organization including bringing in non-core lines of business.