The introduced separation of functions between sales (front office) and risk (back office), which was justified with the introduction of the MaK[1], the minimum requirements for the lending business, and is continued today in the MaRisk[2] (BA[3]) (= minimum requirements for risk management (BA)), has generated advantages from the point of view of decision-making behavior and thus also of the credit risk, as an existing conflict of interest was split up organizationally right down to the management board – and thus resolved.
On the other hand, this separation of functions has also led to increased complexity and thus to some inefficiencies and higher costs. Knowledge about the customer must be stored, built up and synchronized in more places than before. There are also various transfer points in the process for which responsibilities and necessary information must be defined and documented.
The analysis of the annual financial statements is naturally carried out in the back office, as it is not only relevant for potential new lending business, but also regularly serves to fulfill the disclosure obligations under Section 18 KWG.
As a result, it is often no longer relevant for the front office to deal with the annual financial statements of a customer. As a further consequence, the annual financial statements are mostly just an optional source of information for the front office, and it is even used lesser, the better the front office thinks it knows the customer.
This means that an important source of information in everyday life often remains well below its potential.
Many sales-related topics and impulses can be derived from the personal conversation with the entrepreneur, but these are all topics that originate from the entrepreneur himself (directly or indirectly). However, a tax advisor and / or auditor is involved in the annual financial statements – other people, but also other regulations, are involved and must be observed here.
From the annual financial statements I can see (exemplary list, not exhaustive) down payments, guarantee obligations, leases, exchange rate losses, payment periods, interest expenses / income, pension provisions, etc.
Which of these topics does the entrepreneur who talks about growth and future plans cut on by himself? Probably at most one or two of them.
So it makes perfect sense to deal systematically with the annual financial statements of a customer company from a sales perspective. In order for this to actually take place, it must be institutionalized and anchored in the processes of a bank or savings bank. A sensible point in time is certainly the connection to a credit application. An important part of the credit application deals with the economic situation of the company for which the loan is to be decided, and in this context the annual financial statements are taken in hand and worked through. A structured format thenhas to guide the processor to the relevant points in a targeted manner and thus supports him in comprehensively processing and documenting the potentials and topics of conversation.
Whether the analysis of the annual financial statements for sales potential is carried out by the back office or by the front office, the corporate customer advisor (RSM) himself, is almost a matter of taste. There are strong reasons for both variants.
If I emphasize efficiency, then I would have to decide to work with a back office, because that’s where the annual financial statements are dealt with for the first time and knowledge of the customer’s economic situation is already being developed. However, if I want front office and back office to be able to discuss a credit risk assessment on an equal footing, then the front office cannot avoid extensive consideration of the annual financial statements. In addition, the motivation in the front office will probably be higher to implement the identified potential than if you were given a form from the side on the desk – simply because it is then about the implementation of your own finding.
[1] MaK = Mindestanforderungen an das Kreditgeschäft = minimum requirements for lending business
[2] MaRisk = Mindestanforderungen an das Risikomanagement = minimum requirements for risk management
[3] BA = Banken Aufsicht = banking supervision
Vertriebsmanagement 