Funds Transfer Pricing (FTP) is the most essential piece in understanding the profitability of customers, products, organizational units, channels, etc., within a financial institution. Analyzing how the various contributors to net interest margin impact overall profitability leads to more informed and precise decision making regarding product pricing and other key drivers of profitability for the institution.
Unfortunately, many financial institutions have focused on gaining precision in the calculation of
the FTP rate, but they fall short in their analytical reporting. Deeper analysis of FTP results can lead to better pricing decisions and allows your institution to get a better handle on the dissection of performance.
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