Fleet Financial Group is installing an asset-liability management system meant to help measure the profitability of individual banks, including potential acquisition targets.
Banking companies are increasingly interested in using such systems to gauge the profitability of bank units, products, or customers. Other reasons for the interest are new market-valuation rules promulgated by the Financial Accounting Standards Board and new requirements for analyzing interest rate risk.
The software that $45 billion-asset Fleet is installing, from Treasury Services Corp., Santa Monica, Calif., will replace a system developed in-house and will contain financial data on Fleet's three million accounts.
The software is designed to help forecast cash flows as well as the market value of Fleet's portfolios under different interest rate scenarios.
It links mainframe data with a so-called data warehouse stored on a personal computer and containing information about the loans, deposits, and investments on a bank's balance sheet.