Some key action points were raised in a recent conference that mutuals need to tackle to overcome the constraints on growth caused by competitive factors combined with new regulatory requirements.  To succeed business systems and business intelligence needs to be focused on strategy and forward business, rather than being locked into retrospective views.   We don't drive a business looking in the rearview mirror, nor can we drive a business looking backwards.

Reducing the Negatives of Wholesale Funding.

  • Minimise the cost of wholesale funding and its impact on margins and the flow on impact to capital growth from reduced earnings.
  • Reduce operational costs from constant stress testing scenario modelling required by APRA to monitor volatility.
  • Demonstrate robustness with comprehensive, rigorous business strategy and management systems

 Growing capital through increasing retained earnings
The only way mutuals can really grow Capital under Basel III is through retained earnings.

  • Maximise earnings from the use of a finite resource in a constrained capital environment.
  • Utilise expensive staff in revenue development, not compiling management and regulatory reports.
  • Fine tuning strategic business planning to maximise profit and minimise cost.
  • To convince regulators to free up capital by keeping PRC down through demonstrating a robust business.

 

Dacono helping Mutuals to achieve these outcomes
Dacono focused on providing a total end to end enterprise solution to the organisation, not point solutions targeting specialist needs.  The benefit of having an integrated enterprise quality system provides facilities for mutuals to tackle the above points more comprehensively, something that is difficult to do with a point solution.

 Wholesale Funding:

  • Dac4cast is a comprehensive "end to end" enterprise solution tailored for mutual’s that demonstrates best practice in strategic planning, rigor, governance and regulation to give key stake holders such as APRA and Fund Managers certainty of business robustness.
    • Funding costs are equated to risk. The more one can demonstrate robustness with comprehensive, rigorous business strategy and management systems, the more chance one can reduce funding costs.
  • Dac4cast scenario modelling provides stress testing of funding to meet APRA expectations of managing volatility and modelling to achieve best wholesale pricing
    • With the business strategy integrated with repricing, Dac4cast enables comprehensive modelling of pricing impacts on capital, margin and liquidity.

Growing capital through increased profit:

  • When one has a limited resource such as capital, then it is critical to maximise the return on that limited resource.  Dac4cast helps in strategic planning to maximise return.
  • Dac4cast provides enterprise quality systems that provide a level of rigor, assurance and integrated business strategy that can influence Regulators to keep PRC lower.
    • Regulators set PRC according to their opinion of the robustness of the financial institution.  Hence the more capable the institution is able to demonstrate robustness, the lower the PRC they set.
  • Dac4cast’s comprehensive, robust, integrated and dynamic strategic business planning provides a solution to achieve and maximise profits by more thorough modelling that give decision maker’s confidence.
    • By having confidence in business strategies mutuals can be more aggressive in competitive pricing and smarter in making margin.   Confidence comes from the quality of the business systems.

Mortgage Quality:

  • An integrated component of Dac4cast is stress testing mortgage quality such as measuring the impact of a 20% property prices dropping and other what if Scenarios and measuring the impact on current business plans, capital plans and liquidity plans.

 


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