Vital signs

Article Abstract:

Good information management can spur banks into growth. Modern performance measurement tools augment a firm's decisions, performance and shareholder value. However, these measurement tools can be affected by either too-detailed or insufficient information, as well as poorly designed reporting systems. Only by understanding what should be measured, why it should be measured, and to what extent it should be measured that bank senior managers will be able to maximize the value of measurement tools. Performance measurement practices must possess a strategic view for the deployment of the firm's mission, vision and values; equitable evaluation to enhance individual and overall performance; and actionable information to provide a deeper understanding of the success factors and crucial decisions that lead to desired outcomes.

Information Systems, Analysis, Information management

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Y2K's intricate challenge

Article Abstract:

The financial industry will invest about $9 billion to prepare for computer problems related to the year 2000 computer date transition (Y2K) issue. Its diligence on the Y2K matter makes it one of the best-prepared industries worldwide. However, although US financial institutions have dealt effectively with the in-house challenges relating to Y2K compliance, they must increasingly shift their attention to external Y2K-related issues which are largely beyond their control. For instance, banks with foreign operations will need to scrutinize overseas transactions and foreign counter-parties since many nations lag behind the US in terms of Y2K compliance. Y2K-related representations and initiatives must be positioned in a manner that will reduce the potential for litigation.

Electronic computers, Electronic Computer Manufacturing, Finance & Trade EDP Systems, Computers, Digital computers, Year 2000 transition (Computers), Financial institutions, Online securities trading, Financial computer applications

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Climbing the revenue wall

Article Abstract:

Revenue growth will be the biggest challenge facing banks in 1999. Declining loan yields and rising funding costs have increased pressures on interest incomes. The composite net margin of the top 50 banks fell to 3.6% in 3rd qtr 1998 from 4% at the start of 1997. Aggravating the situation is the recent drop in short-term interest rates and rise in credit losses. Banks are expected to respond to these trends via restructuring to boost efficiency, mergers and acquisitions and engaging in stock buybacks to return surplus capital to shareholders. The most successful banks will be the ones that achieve economies of scale in traditional banking activities while developing high-growth segments. Banks are also urged to transform themselves by modifying their business models.

Methods, Bank management

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