KPI ENCYCLOPEDIA

A Comprehensive Collection of KPI Definitions for

BANKING

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Table of Contents
Banking KPI Encyclopedia

Banking Metric Definitions

Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Back Office Operations*
Credit Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Direct Banking Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fraud Prevention & Management. . . . . . . . . . . . . . . . . . . . . . 10
Loan Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Loan Servicing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Trade Operations & Support . . . . . . . . . . . . . . . . . . . . . . . . . 26
Transaction Processing & Support . . . . . . . . . . . . . . . . . . . . . 28
Lines of Business*
Business Banking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Commercial Lending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Consumer Lending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Credit Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Investment Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Mortgage Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Online & Mobile Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Treasury & Cash Management. . . . . . . . . . . . . . . . . . . . . . . . 57
Retail Branch Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Platform Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Retail Branch Management. . . . . . . . . . . . . . . . . . . . . . . . . . 69
Teller Tasks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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Banking
Banking The purpose of banking is to provide a
stable platform on which to perform financial
Back Office Operations* transactions. Banking stimulates the growth
of business by generating confidence and
predictability in a currency, and that growth
Lines of Business* in turn increases the demand for banking
services. Commercial banks provide payment
Retail Branch Operations services, such as checking and credit card
accounts, for customers. They earn money
* Some sections within these groups are not by lending customer deposits in various
included in this document. ways, including installment loans, such as
mortgages and lines of credit. Investment
banks enable business expansion by
providing the liquidity that companies need to
start or grow.

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Banking
KPI Encyclopedia

Cost Quality (Cont.)

• Bank Losses per Checking Account – The total dollar • Percentage of Accounts Opened with Insufficient
amount of checking account-related losses (including Documentation – The total number of banking accounts
losses from internal fraud, identity theft, check fraud, teller opened with insufficient documentation divided by the
over/short) incurred by a bank divided by the total number total number of new accounts opened over the same
of checking accounts managed at the same point in time. period of time, as a percentage.
• Banking Technology Infrastructure Expense as a • Tier 1 Capital Ratio – The total dollar amount of a
Percentage of Total Assets – The total dollar amount of bank's non-speculative "real" money (core equity capital)
a bank's technology infrastructure-related expense divided divided by the total adjusted value of the bank's risk-
by the total dollar amount of assets generated at the same carrying endeavors over the same period of time,
point in time, as a percentage. as a percentage.
• Operating Expense as a Percentage of Assets – • Tier 1 Common Capital Ratio – The total dollar amount
The total operating-related expense divided by the total of the bank's core equity capital divided by the total dollar
dollar amount of assets owned at the same point in time, amount of the risk weighted assets owned by the bank
as a percentage. over the same period of time, as a percentage.
• Tier 1 Leverage Ratio – The total dollar amount of
Organizational the bank's core equity capital divided by the average
dollar amount of total consolidated assets owned by the
• Front Office to Back Office Banking Staff Ratio – company over the same period of time, as a percentage.
The total number of front office banking employees (i.e.,
customer-facing staff including bank tellers, loan officers, • Tier 1 Risk-Based Capital Ratio – The total dollar
etc.) divided by the total number of back office banking amount of the bank's core equity capital and disclosed
employees (i.e., non-customer-facing staff including reserves divided by the total dollar amount of the risk-
underwriters, loan processors, IT staff, etc.) working for weighted assets owned by the bank at the same point in
the company at the same point in time. Expressed as a time, as a percentage.
ratio (e.g., 3:1).
• Return on Equity (ROE) – The total dollar amount of Revenue
net income generated by the bank or financial institution • Assets Under Management (AUM) per Employee –
divided by the total equity owned by shareholders at the The total dollar amount of assets managed by the bank
same point in time, as a percentage. (i.e., assets under management) divided by the total
number of employees working for the company at the
Quality same point in time.
• Banking Efficiency Ratio – Total non-interest expense • Fee Income per Checking Account – Total revenue
incurred by the bank divided by total revenue (interest and generated through checking account fees (includes
non-interest income) generated by the bank over the same overdraft fees, ATM fees, account fees, swipe fees and
period of time, as a percentage. maintenance fees) divided by the total number of checking
accounts managed by the bank over the same period
• Deposit Account Attrition Rate – The number of of time.
discontinued or terminated deposit bank accounts divided
by the total number of bank accounts managed by the • Net Interest Margin – The dollar amount of interest
bank over the same period of time, as a percentage. paid subtracted from the total dollar amount of investment
returns generated divided by the average dollar amount of
• New Retail Account Setup Error Rate – The total invested assets.
number of new retail banking customer accounts
containing an error (wrong address, customer name, • Operating Profit per Employee – The total dollar
account type, etc.) upon setup divided by the total number amount of operating-related profits generated divided by
of new retail banking customer accounts set up at the the total number of employees working for the company at
same point in time, as a percentage. the same point in time.

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Banking (Cont.)
KPI Encyclopedia

Revenue (Cont.)
• Return on Assets (ROA) – The total dollar amount of
net income generated by the bank or financial institution
divided by the total assets measured at the same point in
time, as a percentage.
• Sales per Branch – The total dollar amount of sales
generated through the bank's retail branch network
divided by the total number of branch locations managed
by the bank over the same period of time.

Volume
• Assets Under Management (AUM) – The total dollar
value of assets management by the company at a certain
point in time.
• Total Volume: Deposit Accounts – The total number
of existing deposit accounts managed by the bank at a
certain point in time.

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