Financial Focus: Go Figure

In the infinite world of data analytics, how can your bank or credit union focus its efforts? Is the number of customers or members more important than net income? Or the number of locations more important than the number of full-time employees? It can be difficult to know which goals to create and pursue.

Net Income & Total Assets
Let’s take net income for example. We all know businesses use this as a measure of success, accountability, and budgeting. But in the banking world, we look for much more than just what money comes in vs. what money is paid out for expenses. Financial institutions also manage checking accounts, savings accounts, and investments that, combined with income, give us the overall picture of total assets.

Because of that, total assets serve as the primary gauge of a bank or credit union’s size as well as an indicator of the number of branch locations it may have. Published industry reports share these figures in order to analyze size, expenditures, efficiencies, and yes, net income.

Those same industry reports also show how each bank or credit union ranks in their total marketing spend and the ratio of that expense to net income or to total assets. This ranking indicates if your institution is spending more or less on marketing and promotions than your competitors of similar size. This is really important to review, particularly in how that relates to your and your competitors’ market share.

Efficiency Ratio
Now, how efficient is your bank or credit union – meaning, how much is being spent in order to earn one whole dollar? The ratio of non-interest expense to gross revenue shows leadership teams how well their costs are being managed. Banks logically call this an efficiency ratio. A target ratio is approximately 60% – meaning for every dollar of revenue, their expense is $.60. Higher percentages indicate a need to evaluate and address expenditures.

Action Plan
Understanding the facts and figures can be overwhelming. That’s where American comes in. We can help analyze your expenses, simplify the processes and help build your brand in the marketplace. We work to find you the most budget-friendly solutions to fit your needs – not only in product selection, but in streamlined inventory management and distribution through our online portal. Our eCommerce websites offer your bank or credit union an easy and productive way to place, approve and deliver orders – relieving stress your current teams may be experiencing.

Our solutions are fully customizable, and our team is excited to learn how to tailor each program for your specific needs! Call us at 800.721.7135 or click here to schedule a brief meeting with our team. Together, we will Attack your expenses. Simplify your processes. Build your brand.