Target Level Strategy: Product Level Up vs. Relationship Level Down

Overview

PrecisionLender supports two types of target level strategy that allows a bank to set the ROE targets:

  • Product Level Up: sets the target on every product and these targets are used while pricing the Opportunity.
  • Relationship Level Down: sets the target at the region level and these targets are used for the Opportunity and Relationship.

 

Note

You can only change the target level strategy in the highest available region in your region hierarchy. Once you hit the Save button, the selected target level strategy will be reflected to all subsequent regions.

 

In this Article

 

Product Level Up

In the Product Level Up strategy, your bank can set the target returns on every product and these targets are used while pricing the Opportunity. PrecisionLender also allows you to set up different product target returns for specific regions. For more information, please see Customizing Products by Region.

If you are using the Product Level Up strategy, all of your product targets come from the Product configuration.

Target

Loan

Deposit/Other

Opportunity

Relationship

Product Configuration

Yes

Yes

Yes

Yes

Region Configuration

X

X

X

X

 

Relationship Level Down

In the Relationship Level Down target strategy, your bank sets the target at the region and product levels. This strategy is suitable if your bank chooses to structure Opportunities based on the overall context of the Relationship rather than on the Opportunity alone.

If you are using the Relationship Level Down strategy, the product targets come from the Product configuration, Opportunity and Relationship targets come from the Region configuration.

The Relationship targets are determined by the Region of the Relationship. For more information, see Setting Up and Managing Regions.

Target

Loan

Deposit/Other

Opportunity

Relationship

Product Configuration

Yes

X

X

X

Region Configuration

X

Yes*

Yes

Yes

* In the Financial Statement calculations, the individual target return set in the Product configuration will be used for each Deposit/Other product. However, the Relationship's targets will be used when calculating the rolled-up Deposit/Other returns.

 

If you need assistance with choosing between the two target level strategies, please contact PrecisionLender Support.

 

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