Investment Banking

Most people think that regular banks and investment banks operate in the same way. In actuality, they are two distinct entities. Regular banks offer the public products, such as loans and deposits, while investment banks offer services, such as raising capital, providing investment advice, and the like. In investment banking, the risks are greater. In order to ensure the success of such endeavors, these institutions develop what many people call Investment Banking BSC, also known as investment banking balanced scorecards.
There are many factors to consider in developing a well-balanced scorecard. One has to take into consideration that investment banking is unlike any other industry. In this industry, the risks are indeed great so sets of standards must be defined in order to draw a distinct line between right and wrong. Another aspect to consider and include in the balanced scorecard are key performance indicators. Although these indicators may vary from one bank to another depending on their individual goals and objectives, some of these indicators can be applied to all.
One key performance indicator that should be included in the scorecard is the financial perspective. This aspect will cover a whole bunch of sub-aspects, such as ROI, average rise in investments, proportion of revenue contributed by each service being offered, and many others. Basically, this covers the whole profit generating function of the bank itself. These indicators tell you if the bank is healthy or not. They also help ensure a strong financial foundation for the bank.
The second indicator that banks should include in the scorecard is risk. There are many ways to calculate and evaluate risk. Risk evaluation is an extremely important part of investment banking because the industry itself is subject to the whims of the market as a whole. The ups and downs in the stock market will greatly influence the whole performance of the bank. Bearing this fact in mind, it would be prudent and wise to ensure that the risk evaluation capability of your bank is good.
Internal operations perspective is the third aspect that should be included in the scorecard. This aspect fates the efficiency and performance of internal operations of the bank from marketing to services offered to clients. Since this indicator is quite broad and covers the whole bank, periodic evaluations should also be carried out to ensure that it is able to cover all the operations of the bank.
Finally, the last aspect to include in a well-balanced scorecard is growth perspective. As with any other business or industry, growth is always one of the main objectives. The purpose of such indicator is to know if the goals are attainable in a given time frame.
In this industry, compromising one's performance is never an option. Specific parameters must be set up and strictly followed with the utmost vigor and zest. The risks are too great to be complacent. This is where investment banking BSC comes into the picture. This proper use of this managerial tool ensures the survivability and the success of the bank as a whole and a successful bank also means a strong economy