Management Information

Management Information is all about deriving information from a Bank’s other activities. Financial Services companies are heavily regulated. In addition to the statutory reporting of all companies, they have to provide regulatory information to:

Government Tax Authorities – Information on customer tax withheld and the country of residence of customers.

Government Security Services – Information on Suspected Terrorists, Money Laundering and Fraud.

Central Bank and Financial Services Regulators – Information on credit exposures, capital adequacy and liquidity

Finally, since the raw material, work in progress and finished goods of financial services groups is information, it lends itself to the production of management accounting information. As a consequence, Financial services groups have very large databases for analysing assets, liabilities, costs and income as well as non-financial data for a variety of marketing and other management needs.

 
Read articles in this category:

• Future of Payments review – Cui Bono? (December 17th, 2023):
  Future of Payments review – Cui Bono?
• Digital Pound – (still) don’t do it! (March 22nd, 2023):
  The Bank of England is consulting on the design of digital pound but they are asking the wrong question: they should be asking whether the digital pound is the best answer to the challenges that motivate them; – it is not. Executive summary The Bank of England in their February 2023 consultation paper is asking for comments ...
• CBDCs and Digital IDs – like love and marriage (March 04th, 2021):
  They go together.  Central-Bank Digital currencies (CBDC) look to be an inevitability.  Given that, can we at least use the UK government’s new digital identity trust framework to ensure some level of privacy. Premise one – CBDCs are inevitable The Bank for International settlements (BIS) is the club for central banks and it recently produced an important ...
• Retail CBDC – Don’t do it! (April 05th, 2020):
  Central Bank Digital Currency may well have a future but not as proposed by the Bank of England – read why here.
• Managing Change in Financial Services Risk and Compliance Communities – why is it more difficult? (October 18th, 2019):
  This short document is intended as a discussion paper – posing the question above, and hypothesis that there are two reasons which do not apply to other communities (they have their own difficulties), and providing some potential solutions.
• Update to Banking Technologies and Strategies (August 30th, 2019):
  In the accompanying article “Banking Operations Strategies and Technologies – 15 Years on” we reviewed how our last guess at how these subjects evolved versus the predictions at the time.  We got enough things right to provoke us into having another go. 
• Banking Operations Strategies & Technologies Review (August 30th, 2019):
  Sixteen years ago HBW wrote a number of articles on strategies for different parts of the Banking Framework.  This article takes a review of what was said in the article Banking Operations Strategies and Technologies and links to an updated view of where the industry is going.
• How Are Banks Seriously Going To Address The Rampant Rise In Fraud? (July 03rd, 2019):
  Fraud is rising – could a digital personality be used to make real-time decisions to counter fraud?
• POST 2019 UK CHEQUE CLEARING PROCESS (July 03rd, 2019):
  In 2018 the UK developed a new way of handling cheques based on cheque image processing.  This change has been called ICS (Image Clearing Systems) and previously FCM (Future Clearing Model).  Whatever it is called, from end 2019 it will be the way cheques are cleared in the UK.  It ran in parallel for some ...
• POST 2019 AGENCY BANK CHEQUE CLEARING (July 03rd, 2019):
  This article is an extension of the article (Pre 2019 UK Cheque Clearing Process) which explains how cheque clearing works in the UK from the end of 2019.  It expands to by exploring how small Banks and Building Societies participate in the cheque clearing scheme without being full members, and as a consequence, they have ...
• Uncovering the mysteries behind the role and functions of Treasury Departments. (May 24th, 2019):
  The activities of treasury departments are a bit of a mystery to many, but they are vital to large companies and banks. This article explores what they do and how they do it.
• What is a Treasury Managment System? (May 24th, 2019):
  A breakdown of the typical features found in a treasury management system.
• PSD2 and Open Banking – Retailers to win vs Banks! (March 16th, 2019):
  This article gives a high level forecast of the likely implications of PSD2 and Open Banking on UK Banks. (For an introduction to the API technology underneath these rules click here). Our central forecasts are; • Credit card monolines and the credit card divisions of banks will suffer income hits as retailers promote lower cost ...
• APIs – An introduction for non-technologists (March 16th, 2019):
  APIs – An introduction for non-technologists
• Blockchain tokens for Gold? – Not yet, maybe never! (February 21st, 2019):
  There has been much talk about Blockchain as a means to “tokenise” illiquid assets and so make them easier to trade by ordinary people. HBW has researched this idea versus the alternatives using Gold as the asset type to be tokenised. HBW is unconvinced it is viable yet.
• Spreadsheets the new Operational Risk. (January 22nd, 2019):
  This article explains what the risk is and what Banks can do about it.
• Latest Bank Fraud Reduced in 2019? – No!! (November 24th, 2018):
  The latest fraud of choice for criminals is growing fast and sadly the banking industry is going to fail to curb it in 2019. Howbankswork explains why;
• No peace for the wicked. (September 06th, 2018):
  There is no peace for the wicked! Much as big UK banks would like to focus on digital transformation and customers, products and services, the icy hand of past failings will continue to use a large proportion of the IT, Operations and change resources for the next few years. This article forecasts the main areas ...
• How can Banks make money from GDPR (May 06th, 2018):
  GDPR is a sprawling regulation and buried within it are three key IT challenges which if approached in the right manner will not only create GDPR compliance, but will also generate value for the bank.
• The urgent need for banks to appreciate the value of Management Information Systems (May 15th, 2017):
  With the Banking sector undergoing major transformations, MIS is more pivotal than ever to use data effectively and improve processes.
• CDFIs as an Alternative to Payday Lenders (March 08th, 2016):
  What will stop CDFIs filling the gap left by the withdrawal of payday lenders?
• What is Trading and what is so wrong with it?‏ (September 01st, 2015):
  Governments all over Europe are trying to restrict Banks from Proprietary Trading with legislation. What is this trading thing and why and how did banks get involved in it if it is so bad?
• Modelling Decisions and Validating Requirements with Data (March 17th, 2015):
  Hit regulatory deadlines by modelling decisions and using data to improve requirements .
• Impact of the Recast DGSD upon UK Banks Part 2 (November 06th, 2014):
  This article sets out the proposed changes facing UK Wholesale-only banks as a result of the PRA’s Consultation Paper on the recast EU DGSD
• Impact of the Recast DGSD upon UK Banks Part 1 (November 03rd, 2014):
  This article sets out the proposed changes facing UK Banks as a result of the PRA’s Consultation Paper on the recast EU DGSD.
• Management Drivers in Banking (October 16th, 2014):
  The success of a bank lies in the management and interplay between a number of important banking concepts. This article explores these concepts, which form the key drivers behind decisions made by bank managers and demonstrate their significance to the sustainable long term operation of banks.
• Personal Data Management and Identity Assurance in Banks (June 19th, 2014):
  What opportunities exist for banks in light of the rise of personal data management and identity assurance technologies.
• UK Bank Account Portability (January 17th, 2014):
  This paper looks at the three industry models for how account portability could be achieved, the aim being to make it even easier to switch banks. It analyses these models from the perspective of what leverage the banks could get from the different models.
• UK’s ‘Big 5’ less competitive as result of ICB Ring Fencing (October 18th, 2013):
  This article looks at how the UK’s Big 5 banks will be affected by the Independent Commission on Banking’s legislation on Ring Fencing
• Global Financial Regulatory Landscape (January 14th, 2013):
  Presentation on the likely future shape and size of banks conditioned by the emerging changes in regulation.
• RBS Systems Incident – What it means for all banks (August 14th, 2012):
  This article looks at three questions the regulators should be asking all large money transmission banks as a result of the RBS systems incident in June 2012.
• Banking Commission – PART 2 (May 05th, 2012):
  This article describes how a separation might be achieved in systems and operations terms to support the Independent Banking Commission’s recent reforms and the Financial Stability Boards’ “Living Wills” requirements.
• Banking Commission – PART 1 (May 04th, 2012):
  This article describes how Investment and Retail Banks are connected.
• Remember, Remember Banks In November (November 20th, 2011):
  Banks have been making IT Changes rather unsuccessfully recently. This article suggests there is a pattern with root causes and concludes that Banks will have to change their change implementation strategies in the near future to avoid worse failures.
• Banking Disintegration – A New Industry? (August 15th, 2010):
  Discussion of banking disintegration, focussing on the various complexities arising from the partial divestment of RBS branches to the Santander Group. The specific problems of divestment might spawn a new IT service industry.
• Banks and their loan information problem (November 15th, 2009):
  UK Banks are under increasing pressure from a range of external stakeholders to clarify the real value and nature of their assets. There are many aspects of banking and its operations that complicate a Bank’s reaction to this pressure.
• Appendix to the Credit Crunch article (July 21st, 2008):
  This Appendix highlights why Banks lend to each other and the three means that are used: (1) Money Market Loan and Deposits; (2) Syndicated Loans and Loan Markets; (3) Securitisation and CDOs.
• The Credit Crunch – so what for IT and Operations? (July 20th, 2008):
  What has happened to Interbank markets over the last 6 months, why has this happened and what is the expected impact on IT and Operations. There are two main areas of change as a result of the credit crunch for IT and Operations; (1) Stop / Run down programmes, and (2) New MI based on ...
• The Anatomy of Investment Bank (December 21st, 2007):
  An Investment bank works from a systems and operations point of view. It is by necessity a simplification of reality but conveys the essence of the game. There are two parts to this; The Core Trading Business Model & The Investment Bank Structural Overlay.
• The RBS ABN Amro Challenge (December 21st, 2007):
  The RBS challenge in integrating ABN Amro, describing the necessary stages of the ABN separation project and the RBS integration project.
• PSD Part 5: So What Do Banks Have To Do? (August 21st, 2007):
  The Payment Services Directive (PSD) has not received anything like the media air time that SEPA has but for a UK bank it is actually a more important set of changes.
• PSD Part 4: Refunds and Complaints (August 21st, 2007):
  The Payment Services Directive (PSD) has not received anything like the media air time that SEPA has but for a UK bank it is actually a more important set of changes.
• PSD Part 3: Value Dates and Cycle Times (August 21st, 2007):
  The Payment Services Directive (PSD) has not received anything like the media air time that SEPA has but for a UK bank it is actually a more important set of changes.
• PSD Part 2: Impact on Competition and Changes to Pricing (August 21st, 2007):
  The Payment Services Directive (PSD) has not received anything like the media air time that SEPA has but for a UK bank it is actually a more important set of changes.
• PSD Part 1: Definition, Mechanism and Scope (August 21st, 2007):
  The Payment Services Directive (PSD) has not received anything like the media air time that SEPA has but for a UK bank it is actually a more important set of changes.
• Pre 2019 Agency Bank Cheque Clearing (January 22nd, 2007):
  For those who are not familiar with the UK Cheque clearing processes we have created two further reports that explain the current UK cheque clearing processes.
• Pre 2019 UK Cheque Clearing Process (January 22nd, 2007):
  For those who are not familiar with the UK Cheque clearing processes we have created two further reports that explain the current UK cheque clearing processes.
• What The Government’s Cheque Clearing Changes Mean For Banks (January 21st, 2007):
  The Government has announced changes that have to be made by end 2007 to the cheque clearing system. An explanation of the government changes and how these impact Clearing Bank and non-Clearing Bank cheque processes.
• What is a merchant Acquirer? (November 22nd, 2006):
  Under what is called the SEPA Cards Framework (SCF) there is a drive to standardise the interface between Merchants and Merchant Acquirer – find out more about what a merchant acquirer is.
• SEPA (November 22nd, 2006):
  SEPA is just for European banks, right? Wrong! UK banks have to do quite a lot. Find out what…
• Development of IT Security: In the Next Two Years (July 25th, 2006):
  Discussion and forecast of the likely changes to IT Security in the next two years.
• Development of IT Security: History of IT Security During 2005-Today (July 25th, 2006):
  A historical description of why the IT security world is the way it is during 2005-today.
• Development of IT Security: History of IT Security During 2003 (July 25th, 2006):
  A historical description of why the IT security world is the way it is during 2003.
• Development of IT Security: History of IT Security During 1990 (July 25th, 2006):
  A historical description of why the IT security world is the way it is during 1990.
• Development of IT Security: History of IT Security During 1980 (July 25th, 2006):
  A historical description of why the IT security world is the way it is during 1980.
• Development of IT Security: History of IT Security During 1970 (July 24th, 2006):
  A historical description of why the IT security world is the way it is during 1970.
• Syndicated Lending (Loan Markets): Trends in Loan Markets (January 25th, 2006):
  Most people understand the ideas behind retail bank lending (such as house mortgages or overdrafts) from personal experience. The currently booming world of syndicated lending and loan markets is much more opaque. The purpose of this paper is to open this up. It explains how it works and some of the trends taking place; in ...
• Syndicated Lending (Loan Markets): What Are The Loan Markets Like? (January 25th, 2006):
  Most people understand the ideas behind retail bank lending (such as house mortgages or overdrafts) from personal experience. The currently booming world of syndicated lending and loan markets is much more opaque. The purpose of this paper is to open this up. It explains how it works and some of the trends taking place; in ...
• Syndicated Lending (Loan Markets): Customer Problem and Banking Solution (January 25th, 2006):
  Most people understand the ideas behind retail bank lending (such as house mortgages or overdrafts) from personal experience. The currently booming world of syndicated lending and loan markets is much more opaque. The purpose of this paper is to open this up. It explains how it works and some of the trends taking place; in ...
• Syndicated Lending (Loan Markets): How Loan Markets Work (January 20th, 2006):
  The diagram below illustrates the various roles that are taken by banks in the loan markets: The Book Runner The customers do not have the contacts, knowledge of rates nor relevant experience to put together syndicates of banks so he normally chooses one bank to be the Book Runner (or Mandated Lead Arranger – MLA). The Book ...
• Development of Payment Systems within Banks (September 25th, 2005):
  The new industry driven real time payments for internet banking, telephone banking and standing orders will cause banks’ IT departments to re-engineer their core banking systems. This will be a major area of systems development over the next few years and this article describes the impacts by systems area.
• Collection Accounts and Agency Banks (August 28th, 2005):
  The main clearing banks provide special services for: Organisations receiving very large numbers of payments (e.g. utility companies, retailers, local government etc.) Small banks and building societies who do not want the hassle of running their own clearing and payments operations. The former use a service called a Collection Account, sometimes called a Head Office Collection Account or ...
• Real Time Accounting (August 28th, 2005):
  The new industry driven real time payments for internet banking, telephone banking and standing orders will cause banks’ IT departments to re-engineer their core banking systems. This will be a major area of systems development over the next few years and this article describes the impacts by systems area.
• Functional differences between a cross border integration and a single country one (June 25th, 2005):
  In this article we explore the main areas of functional difference between a cross border integration and a single country integration.
• Economics of cross-border bank systems integration (June 25th, 2005):
  In this article we explore the main areas of cost difference between a cross border integration and a within country integration.
• What is the Sarbanes-Oxley Act? (February 26th, 2005):
  What does the Sarbanes-Oxley act involve, why was it introduced and who does it affect within the bank?
• How do banks make their money? (February 25th, 2005):
  In this article we analyse the two main forms banks use to make their income.
• Accounting: More information (February 24th, 2005):
  This report should be read in conjunction with the report on ‘Accounting in Banks’ which gives its reader an overview of how accounting is used within the banking environment.
• Accounting In Banks (February 24th, 2005):
  How bank accounting works and who uses it. With examples of yearly produced reports; the P&L, the balance sheet and the cash flow statement.
• Appendix 3: Low Value Payments – Cost Saving Opportunities (November 26th, 2004):
  Should be read in conjunction with The Outsourcer’s View – An Interview with Unisys and How can we make substantial cost reductions to Europe’s Payments?. This example is based on the kind of payments that are made by an Automated Clearing House. There is no uniformity in Europe as to exactly what is in the scope but there is ...
• Appendix 2: Foreign Currency Payments – Cost Saving Opportunities (November 26th, 2004):
  Should be read in conjunction with The Outsourcer’s View – An Interview with Unisys and How can we make substantial cost reductions to Europe’s Payments?. This example uses foreign currency payments based on the correspondent banking model. This area is one of the most standardised but savings can still be made. The diagram below illustrates the key elements based ...
• Appendix 1: Payments System Structure (November 26th, 2004):
  Appendix 1 to “How can we make substantial cost reductions to Europe’s payments? – An agenda for Banks, Outsourcers and the European Commission”
• How can we make substantial cost reductions to Europe’s payments? – An agenda for Banks, Outsourcers and the European Commission (November 26th, 2004):
  With Europe’s hundreds of banks collectively knit together, one would expect the European Payments system to be fundamentally efficient. However, this is not the case.Our report investigates why this is the case and considers how cost savings can be made, paving the way for substantial economic growth.
• The Outsourcer’s View – An Interview with Unisys (September 26th, 2004):
  For a different perspective on Payments and Outsourcing HBW talked to Unisys, in particular, Mike Eaton, Managing Partner for Financial Services and Gerry Heard, Head of Outsourcing Solutions.
• The Evolution of Banking Systems (August 26th, 2004):
  The history of the development of new banking systems accounting for new technologies and banking services.
• Appendix to Why are the AD departments of big banks so unproductive and what can be done about it? (July 26th, 2004):
  This report considers the unproductivity of the Applications Development departments of big banks and suggests how this can be overcome.
• Why are the Application Development departments of big banks so unproductive and what can business managers do about it? (July 26th, 2004):
  This report considers the unproductivity of the Applications Development departments of big banks and suggests how this can be overcome.
• Risk Assessment and IT Investment (January 26th, 2004):
  This report highlights an alternative way of considering how the IT Investment Budget is allocated.
• How Might Mobile Payments Work? (December 26th, 2003):
  Outline of how mobile payments are working and/or are likely to work, relative to Person to Person and Person to Merchant payments.
• Reasons Why a Bank Could Want Mobile Payments (November 27th, 2003):
  This report outlines the reasons why a bank could want to invest in the mobile payment technology.
• The ‘Value Model’: A Detailed Description (August 27th, 2003):
  A detailed description of the assumptions and calculations that underpin the ‘Value Model’ developed by Howbankswork.com to help you estimate the true value of your Bank’s systems base.
• How much are your Bank’s systems worth? (August 27th, 2003):
  Business users often consider their Bank’s systems to be hugely expensive and highly inflexible to change. This article argues that this perception is in part a product of undervaluing the core systems. A ‘Value Model’ is provided to help you realise the true value of your Bank’s systems.
• Quantitative Example (June 27th, 2003):
  This report gives a summary of Basel II and describes the regulatory imperatives for better MI on Risk.
• What is Basel II? (June 27th, 2003):
  This report gives a summary of Basel II and describes the regulatory imperatives for better MI on Risk.
• MI Systems Architecture Implications of Basel II and IAS 39 (June 26th, 2003):
  This report describes the current MI systems of UK Clearing Banks and relates the requirements of Basel II and IAS 39 to the gaps in these systems.
• Basel Operational Risk Implications (June 25th, 2003):
  Basel II embodies several important new ideas but arguably the most important aspect of it is that it represents a wake up call to the banking industry to take operational risk more seriously. In this report we look at those aspects of Basel II that relate to Operational Risk. A good introduction to this is the ...
• The Risk Market (June 23rd, 2003):
  This article is based around an interview between Ray O’Brien – managing director of risk consultancy E1Works – and the HowBanksWork team. The interview provides some interesting views on the risk work currently developing in the major Banks and what the solutions are likely to be.
• What is IAS 39? (June 20th, 2003):
  Report on key aspects of accounting in Banks that are likely to change with IAS 39.
• A Guide to Successful Business Process Outsourcing (April 27th, 2003):
  This report examines what factors make for a successful outsourcing arrangement and what conditions / factors are likely to be detrimental.
• Service Channels and Recent Banking Strategies (April 27th, 2003):
  This report relates the strategies and technologies discussed in the “Banking Operations Strategies & Technologies” report specifically to sales and service channels.
• Customers and Recent Banking Strategies (April 27th, 2003):
  This report principally examines how recent banking strategies are likely to affect customers. This is illustrated with two exmaples of how a customer might perceive the changes within a bank.
• Core Banking Processes and Recent Strategies (April 27th, 2003):
  This report specifically examines recent strategies and technologies in relation to the Core Banking engine and assesses success / failure.
• Banking Operations Strategies & Technologies: Example Scenarios (April 27th, 2003):
  Brings together all the ideas distilled in the Banking Operations Strategies & Technologies report in a couple of illustrative scenarios. These show how some very common banking business processes will look if the strategies discussed are fully implemented.
• Banking Operations Strategies & Technologies (April 27th, 2003):
  Detailed examination of the key strategies and technologies currently being pursued in UK Banking Operations departments. These trends include centralising processing, outsourcing and the separation of service and processing.