TKS Bank completed the implementing solution SAS ABM for functional value analysis

The Tinkoff Credit Systems bank implemented the specialized system of functional value analysis and planning of SAS of Activity Based Management (SAS ABM) more precisely to understand cost value of banking products, client segments and channels of customer interaction.

Implementation of the specialized solution for allocation of expenses on the basis of ABM of methodology was the planned step long ago. "While products and there were a few channels of customer acquisition, the need for such system was small — at that time we coped with calculations in the manual mode and could at adoption of our solutions to manage more rough approach to cost value assessment — Pavel Tokarev, the vice president for finance and strategic planning, the deputy finance director of "TKS of Bank" told. — In 2012, taking into account complication of a business model of bank, for preserving of transparency of management we returned to consideration of a question of transfer of our calculations to the industrial solution on functional value analysis and implementation of the relevant software solution again. In 2013 based on the careful analysis the solution SAS ABM was selected, and in the end of the year we began creation of an AVS-system".

Functionality of a system, simplicity of integration into the existing infrastructure (for the full-scale ABM solution it is necessary to provide regular loading in the system of large volume of information on transactions of bank and its clients) and also existence of successful experience of implementation of SAS ABM in the Russian banking market became the main arguments for benefit of the offer of SAS, specified in bank.

The bank involved specialists of Glowbyte Consulting company, the partner of SAS Russia/CIS in project implementation. Specialists of integrator not only participated in the organization of loading of information, but also helped during the developing of methodology and setup of model of interrelation "resources there are cost centers". The financial model implemented in a system allows to estimate investment soundness at development of the specific channel of attraction, a segment of clients, a banking product. A system gave the chance more thinly to configure tariff/percentage policy on the basis of the actual information on a customer behavior and its dynamics and also allowed to react quicker to a market change and an internal situation for maintenance of profitability of business at the level necessary for shareholders.

In the basic SAS ABM model in "TKS Bank" is configured five main units: resources, business processes, activities, products and channels. More than 30 main groups of drivers (the calculated indicators) have an impact on cost accounting. A system covers all structure of bank to the level of departments and the working groups that allows with sufficient, but not excess extent of detailing to control expenses of bank and to trace as well as what divisions participate in formation of product cost.

"We achieved necessary extent of detailing which allows us quicker and at the same time more qualitatively to understand a cost structure. On the basis of this information we can make more justified investment decisions and trace their effects: understand a deposit of different projects to the current financial result, make corrections to a product line, optimize processes, reveal unevident problems and find methods of economy of resources — Pavel Tokarev commented on project deliverables. — While the financial department acted as the customer of a new system, results of its work are more and more demanded by heads practically of all directions of bank".

The first calculations made in a system upon start in commercial operation helped to reveal and eliminate defects in efficiency evaluation of divisions of bank. "We saw at once where and why there are disagreements at allocation of expenses. For example, at independent calculation of costs some divisions consider the VAT and UST, and others — are not present, respectively, their efficiency is not quite comparable. Besides, we detected cases when divisions do not consider an expense because do not consider it and are sure that it is already considered by other department. Thus, SAS ABM allows to implement uniform calculation principles of costs and cost value for all bank and to eliminate discrepancies in the management reporting" — Pavel Tokarev gives an example of the received result.

As noted, all divisions of bank are anyway interested in results of work of SAS ABM. The purpose of managers is not only improvement of financial performance, but also optimization of internal processes. So, the service of marketing can use data on segments of clients by the predicted income and expenses on channels of interaction, products, service, etc., adjusting marketing policy.

"We began with the solution of basic tasks, but already in the near future we are going to expand use of SAS ABM. In particular, we already tried to carry out stress testing using calculation results from this system. We will be able to understand better how any external event (for example, development of the legislation, change of wage rates) will affect profitability of our business. Comparative testing will help to select, for example, option of marketing activities, optimal on costs" — Pavel Tokarev added.

Since September, 2014 TKS Bank will already execute calculations of complete financial model in SAS ABM on a monthly basis. It will allow to keep track better of any dynamics and will give to heads an additional feedback for preserving of flexibility of management, are sure of bank. In addition, TKS Bank is going to increase detailing of an expense model by clients and channels of interaction with them and also to add to a system new products and their derivatives in process of development and an output to the market.