Diagnostic Tool

The Importance of the Health of Public Financial Institutions
A government-owned financial institution (development bank) can fill market gaps or respond to temporary market malfunctions. During the recent financial crisis public sector financial institutions were able to relieve some of the pressure felt by private banks which could not get access to funding or were forced to withdraw or reduce their customer limits. Consequently, countries with healthy public financial institutions saw less of an impact on availability of finance for their SMEs and other corporates.

Those public sector financial institutions that were ready for this task were able to act quickly and decisively. Others found themselves slowed down or unable to react due to weak systems, inadequate governance and decision-making, limited product range and poor financial and risk management.

The crisis illustrated the need to evaluate consistently each organization to ensure a strong readiness to withstand and respond to systemic market gaps or temporary market malfunctions.

The challenge is that no two banks are completely alike. Difference in key operating dimensions such a mandate, legislative and regulatory frameworks, portfolio composition and culture can vary widely from bank to bank. However, commonalities do exist that can be set against lessons learned (both good and bad) from similar peer institutions around the world.

Introducing a Health Diagnostic Tool for Public Banks (HDT)
International Financial Consulting Ltd. is pleased to announce the launch of an on-line diagnostic tool to examine and provide feedback on the health of the public sector financial institutions. This tool, based on research begun over a decade ago, is designed to allow public banks to identify critical factors affecting institutional health and provide key insights to improving overall performance.

The tool addresses the following dimensions:
• Public policy and corporate governance
• Development impact
• Financial and operational performance

The answers provided will be assessed by our team of experts, who will generate a report that rates the institution’s current health and suggests actionable steps to improving overall performance. If you have any questions or would like more information, please contact us at info@i-financialconsulting.com.

Call for Beta Participants
The tool is accepting beta test participants. Approved applicants will be given initial access to the tool and subsequent reports free of charge (to a maximum 5 participants). Participants will be asked to provide honest and constructive feedback on the process and end product. At no point will confidential responses be made available to any third party except on an aggregate basis. International Financial Consulting Ltd. will handle all gathered data with the utmost care and confidentiality. If your institution is interested in participating or you would like more information, please contact us at info@i-financialconsulting.com.

The Importance of Benchmarking for Development or Public Policy-based Financial Institutions
Benchmarks for development banks must not use local commercial banks as comparators. Benchmarking entails identifying gaps in an institution’s current state relative to international standards and best practices on policy, operational and technical levels. Such comparison may highlight some important gaps within the institution which could be attributed to absence of appropriate policy, obstacles in implementation of policy, issues related to lack of ownership and leadership, lack of staff training on procedures and practices, weak operational systems and many others. When conducting institutional benchmarking, we analyze the institution against a range of relevant functional areas, indicating where it falls most short of international standards.

The application of best practices indiscriminately, belies the widely accepted belief that a ‘one size fits all’ approach is not only ineffective but possibly, harmful. As a result, our recommendations for improving institutional or portfolio level performance will be based on an intimate understanding of the unique context while simultaneously integrating applicable international best practices.