The financial services sector has evolved significantly in recent years, driven by technological advancements and global socio-economic events. Recognizing the importance of staying ahead in this dynamic environment, The KPI Institute (TKI) is dedicated to providing leaders, professionals, and the broader business community with essential knowledge and resources.

Every month, TKI curates a collection of diverse learning materials and opportunities in strategy and performance management and adjacent fields. Some of these resources, while released years ago, remain highly relevant due to their timeless principles and adaptability to changing business dynamics, providing enduring value and insights for today’s challenges.

This month, TKI is pleased to present comprehensive, research-based resources focusing on finance.

Top 10 Finance Key Performance Indicators (FREE): Part of the Top 10 KPIs Series, this collection of posters provides an overview of how key performance indicators (KPIs) are measured in practice today, specifically in finance. Some of the KPIs profiled in this poster are % Capital acquisition ratio, #Labor multiplier, and $ Debt-adjusted cash flow.

Articles (FREE): Find practical insights related to the financial services industry from a variety of articles published on Performance Magazine, written by subject matter experts and research analysts.

• Millennials and banks: surmounting the digital divide
• Fraud in the travel industry: Is digital footprinting the solution?
• Banking conundrums: customer focus or operational performance?
• Managing bank performance with the Balanced Scorecard

The Finance KPI Dictionary: This dictionary provides valuable information on over 190 KPIs not only by defining them but also by presenting the calculation formula for each and every one of them. It is an innovative tool, essential for assessing and optimizing a company’s performance in the five main functions of a finance division within an organization: asset/portfolio management, financial stability, forecast and valuation, liquidity, and profitability.

The Top 25 Finance KPIs – 2020 Edition: This report features the most popular KPIs used in the finance sector. It offers a comprehensive practical learning opportunity with KPIs by including not just detailed documentation for each KPI but also engaging articles discussing optimal practices for selecting and documenting KPIs.

Certified Data Analysis: Professionals in the finance sector can benefit from attending this course because it equips them with essential skills in data analysis, allowing them to create accurate financial models, optimize investment strategies based on comprehensive market analysis, make informed decisions, and mitigate risks effectively. 

Certified KPI Professional and Practitioner: Professionals within the finance sector can gain considerable advantages from enrolling in this course. It is packed with indispensable knowledge and competencies needed for accurately measuring, assessing, and articulating financial performance metrics. With these skills, finance professionals can lead strategic initiatives, make informed decisions, and significantly contribute to improving the overall success and financial stability of their organizations.

Measuring financial performance in today’s dynamic and competitive business landscape goes far beyond traditional metrics. Aside from profitability and cash flow, the revenue growth rate is a vital indicator for companies striving for success. 

Monitoring revenue growth rates help the business make strategic decisions, attract investors, and maintain market competitiveness by comprehensively understanding their financial performance, whether it decreased or increased. It is also important to identify the factors influencing the revenue growth rate, such as choosing the right market, product and services pricing strategy, and customer retention rates.

Choosing the right market focus can help businesses narrow their target market and identify high-quality leads in their chosen segment, pursuing the most profitable customers. Moreover, narrowing market focus can effectively customize products or services to match the market segment’s unique demands and preferences. 

However, even the most profitable segments can lead to lower revenue rates because of the product and service prices as more business competitors enter the market. Hence, the right products and services pricing strategy is essential. According to research, “accurate and effective pricing” is vital for a company to become profitable. All products and services should have pricing plans based mainly on the knowledge of the demands and values of the target market. Based on the same study, value-based pricing is the best method to assess an item’s right price based on the value it generates for clients and their perceived worth. 

With reasonable products and service prices and the best quality value, satisfied customers are more likely to become repeat customers, refer the business to others, and drive long-term revenue growth. A study conducted on businesses in Kurdistan suggests that pricing strategies have a strong and significant impact on customer retention. Based on the study’s results, customers prioritize product pricing over product quality. It was also discovered that implementing an aggressive pricing strategy is more effective in customer retention.

A thorough comprehension of these elements equips organizations to adjust to shifting market conditions, streamline processes, and promote long-term revenue development. But what are the ways in which businesses can monitor their revenue growth rate? There are a few of them such as analyzing revenue trends by regularly reviewing financial statements like income statements, balance sheets and cash flow statements, tracking sales quantity and value over time by monitoring sales reports, and using key performance indicators (KPIs) related to revenue.

The KPI Institute’s infographic titled “KPI of the month: % Revenue growth rate” is an easy guide for businesses to determine whether their revenue has grown or dropped over time and measure the level of its change. Specifically, the % Revenue growth rate calculates the revenue variance percentage over a designated time frame. This can be calculated on a quarterly or annual basis. 

To get a picture of the overall revenue performance, it is essential to monitor the % Revenue growth rate alongside other KPIs, such as $ Net income and $ Financial expenses. Moreover, organizations should take competitive aims and industry standards into account when defining targets as part of the annual budgeting process to make sure their goals are realistic and achievable.

Download the free infographic on the slot thailand TKI Marketplace today and unlock the power of KPI in monitoring your business revenue growth rate.

As the recovery from the COVID-19 crisis accelerates; most of the countries open their borders for tourists. In addition, the measures of travel restrictions have been eased amidst the International Air Transport Association (IATA) upgrade to its outlook for the airline industry’s 2022 financial performance. 

According to IATA’s forecast, the airline industry is expected to reduce its losses to -$9.7 billion, with a net loss margin of -1.2%. It is a huge improvement compared to IATA’s 2021 estimation of $11.6 billion loss, and from losses of $137.7 billion (-36.0% net margin) in 2020 and $42.1 billion (-8.3% net margin) in 2021.

“Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty. Losses will be cut to $9.7 billion this year and profitability is on the horizon for 2023. It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets,” said Willie Walsh, IATA’s Director General.

However, it is reported that despite the airline industry returning to profitability, they are unable to meet the growing demand for travel due to much higher expenses for labor and fuel. Airlines discovered that they could not maintain the higher level of flights they had hoped to provide in order to take advantage of the escalating demand.

What Can Airlines Do?

Focus on profitability over revenue growth. PwC believes that investors will continue to reward airlines that prioritize profitability over revenue growth. Airlines could be enticed to increase capacity more quickly than demand to profit from low incremental costs and abundant resources. However, doing this will probably result in lower fares, which will reduce revenue and profitability.

Establish a positive reputation. Based on McKinsey&Company’s analysis, travelers no longer just purchase tickets based on the cost and availability. They travel more frequently and have more understanding of the variations among airlines, including their service capabilities and operational efficiency.

Monitor performance using KPIs. In order to track an airline’s potential or needs for improvement that can help the organization demonstrate positive reputation, and develop and implement a customer-focused strategy, it is necessary to have the data to support their decisions.

The KPI Institute released the Top 25 Airlines KPIs – 2020 Extended Edition, which compiles the most popular 25 KPIs used worldwide by airline management throughout 2016 and 2020. The 25 airlines KPIs identified are categorized into five divisions:

1. Airline Service Quality – Evaluates an airline’s capacity to deliver services that meet consumer expectations as it draws attention to crucial factors that directly affect customer happiness.
2. Airline Revenues – Assesses the revenues, which airlines generate through its service and product sales.
3. Aircraft Fleet Management – Refers to effectively arranging and managing the available aircraft and includes information on maintenance procedures and capacity utilization rates.
4. Airline Costs – Relate to all the expenses involved in providing airline services.
5. Airline Staff – Indicates the sufficiency and productivity of the airline’s employees. 

Explore the 25 most popular airline KPIs today and read through each of their profiles, which are filled with in-practice recommendations. Download the Top 25 Airlines KPIs – 2020 Extended report here.