Measuring Performance and Profitability of a Financial Institution : The Metrics of Funds Transfer Pricing

Recent upheavals in the global financial sector have exacerbated the situation in terms of stringent regulatory compliances and restrictions. Capital requirements are increasing and achieving revenue growth continues to be a challenge amidst weak macro-economic conditions. These forces have led to eroding margins for financial institutions and are severely testing their ability to achieve sustainable profitability. The situation actually warrants financial institutions to review their conventional methodology of measuring and reporting business performance. This article takes a closer look at FTP and how it can add value to the banking organization for better performance management at the granular level