A Concise, Informative Balanced Scorecard Example For Financial Institutions

Looking for a quick and helpful financial scorecard tutorial? Take a look at this walk-through.

Joseph, Director of Customer Success at ClearPoint, has over 10 years of experience working with customers to create efficient performance management and strategy execution processes.

The Balanced Scorecard has been proven effective in a variety of environments, including financial institutions. Banks, investment firms, financial management organizations, and insurance companies have all found scorecarding to be an effective solution to managing strategy and aligning their organizations.

Below is an example of a financial scorecard that follows the traditional Norton and Kaplan perspectives (from the top down): finance, customer, internal, and learning and growth. We’ll discuss each of these perspectives and help you understand what is critical and customizable for your unique organization.


Financial Perspective

You’d likely have your financial perspective at the top of the scorecard, driven by two key goals. In our example, one objective is to expand revenue and the other is to keep your costs efficient and in-line. While these may apply to your organization, you’d want to look toward your unique individual strategy to determine what is best-suited for this perspective. Ask yourself, “How are we going to expand our revenue?” This might be through acquisitions, through revenue from existing clients, or by expanding your client base. You’ll also want to ask yourself, “How are we going to keep our costs down?” (Keep in mind that at the top of these two objectives you might also have “increase profit” or “increase shareholder value.”)

Customer Perspective

The customer perspective directly follows the financial perspective. These are the key differentiators between you and your competition—and you’ll want to determine what you want your customers to be thinking and doing as part of your strategy. If you can’t articulate the difference between you and your competition, how do you expect your customers to?

In our example, we wanted to:

  • Increase our customers’ confidence in our services.
  • Understand and serve customer needs.
  • Provide speedy and accurate service.

For example, a Goldman Sachs customer might be looking for more personalized, individual service from a knowledgeable employee they can interact with, while an E-Trade customer might be more focused on a highly functional, easy-to-use website. If you were only focused on revenue, you’d miss a better understanding of what your customer is looking for.

Internal Perspective

You should be able to divide the internal processes your institution is focused on into distinct and separate categories. In our example above, we’re considering the following three areas:

  1. You’ll need to examine what processes you need to go through to increase revenue or increase business. For this example, you might need to identify and target regional opportunities or strengthen critical partnerships. Depending on your organization, you could be more focused on acquisition opportunities or instead on looking for new products to sell to existing clients.
  1. Financial institutions have to be able to manage many different types of risk, so this might be another important internal process category. Creating a risk management and compliance process that works is vital, as is creating a plan for recovery in case your institution is breached, your critical data is compromised, or there is a major change in your financial outlook. For example, if you are a global organization and a major exchange rate event occurs, you’ll need steps in place to recover quickly.
  1. Taking into account the things that contribute to managing your cost efficiency might greatly increase your productivity. For example, you may consider leveraging technology and streamlining your processes—say, the credit approval process—for efficiency’s sake. Again, be sure to turn to your strategy for the processes you need to improve upon and focus on what could help your organization grow and save costs.

Learning & Growth Perspective

In this final perspective, you’ll want to focus on your staff’s culture, capabilities, and skills. Per our example, this could include team training, achieving a collaborative and effective environment, or better communicating your strategy. Whatever you decide, be sure these objectives take into consideration how your team works and what’s critical to the company as a whole.

In Summary

Remember, the example above is only for example’s sake. Some of the objectives we discussed might fit in perfectly for you, but keep in mind that your financial Balanced Scorecard should be customized to line up with your strategy specifically. Once you’ve gained an understanding of growth and efficiency in your institution—which is through the financial perspective—the rest of the elements can be built down from there.

A Concise, Informative Balanced Scorecard Example For Financial Institutions