Bank's Key Performance Indicator & Communication

Week Five Readings:


Bielski, L. (2007). KPI: Your metrics should tell a story.American Bankers Association.ABA Banking Journal, 99(10), 66-68

Karr, J. (2005). Performance measurement in banking: Beyond ROE. Journal of Performance Management, 18(2), 56-70

Week Five Assignments:

(Part 1) Assignment 5.1:

(Part 2) Assignment 5.2: A Banking Communication

KPIs are measurable guidelines that are very specific to an organization and even more specific to the functions of the bank. An example of a KPI for a teammate in a branch might be <2 transaction difference per month. A lender might have a KPI of <2% delinquency rate in their commercial loan portfolio. Typically various committees are formed, pulling from various functions of the bank to develop the appropriate KPIs for all areas of the bank. In large banks, there is a full department whose sole responsibility is to manage and document how well the areas of the bank are performing in relation to the KPIs set for the area. In later weeks we will learn the specific KPIs for your Bank and how the Bank uses KPIs to manage the business, improve quality and productivity and mitigate risk.

As you advance in your banking career, it is important for you to take responsibility, not only for your accomplishments but for those of the teammates you manage. By doing so, you will be recognized as a part of the strategic team that will make the bank successful. A manager’s role is multifaceted but in the early stages of making the transition from team mate to manager, it is essential to accept the responsibility of influencing the performance of others as well as the responsibility of your own performance.

As a manager, you will have the responsibility to continually communicate with your staff on a daily if not hourly basis to ensure success in your area of the Bank.   There will also be many instances when you will have to communicate with your manager and other members of the senior management team to ensure that they are aware of specific activities in your market, your functional area and with your team. At times, you will need senior management’s support for a plan you are formulating to improve operations, sales and service. At other times, you may need to make senior management aware of external factors that may affect your team’s performance, such as, an increase in robberies in your market area or a major business closing in the your marketplace   In any event, it is important to be competent in effectively communicating with senior management.

During Week 5 you will cite examples and post Assignments that focus on the challenging task of communicating issues about your business to senior management and the communication you receive from senior management about changes that affect your area.

Consider the following example. At the Chamber of Commerce meeting you find out that IBM will be opening a new facility in your market area that is planned to house 5000 employees. This finding can have both a positive and negative effect on your business. On the one hand, it offers many opportunities to gain new clients which may require you to plan your sales goals differently. On the other hand, it may affect the traffic flow during peak hours which may require you to make staffing adjustments. The key is to know when and how to communicate this information to your manager and the other members of the senior management team. Should you call a meeting? Should you send an email? Should you just have a call with your boss? Each of these may affect the how the bank responds and the subsequent success of your business.

It is also important for senior management to communicate with bank managers to keep them informed of how corporate plans will impact bank managers. You will know from your own experience that at times this communication is facilitated in a staff meeting, a large scale company meeting, or a one-on-one meeting with your manager. Almost daily, you and your teammates receive policy and procedural updates and changes and may be required to visit the company intranet for up to the minute information. Communicating from senior management has a major impact on how the bank manages the interactions among the lines of business, coordinating efforts and enjoying positive results.


*Please Answer the Assignments on the Attached Word Documents Titled 5.1 & 5.2**

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