Question

Citizens Bank is an established bank in the nation of Albion. With a total of 125 branches

across Albion, the bank is increasing its digital presence by offering a wide range of mobile

banking services. The banks clientele consists of retail and business customers. Among the

services provided are for savings accounts, current accounts, business and personal loans,

mortgages and credit cards.

Citizens Banks corporate vision is to be the bank of the people and a mission to serve all

the banking needs of the citizens of Albion. To achieve this, the bank has the following values:

1.

Placing customers needs at the forefront. This involves understanding and anticipating

customers needs and making banking products and services available to the widest

number of customers possible. Citizens Bank recently made a large investment in IT

security to prevent fraud and also invested in technology to make services accessible to

the visually impaired and other special needs customers.

2.

Simplifying the business. This entails identifying opportunities to simplify activities and

facilitate open and clear communications.

3.

Making a positive impact on communities served. This involves serving the bottom 40%

segment of society, new homeowners, and small and medium enterprises (SMEs) as well

as being fair and responsible all the time.

Extracts from Citizens Banks balanced scorecard are shown as follows:

Performance Measures

20x0

20x0

Actual

Target

Financial Perspective

Return on capital employed (ROCE)

13%

14%

Interest income

$8.5m

$8m

Net interest margin (margin achieved on interest income)

2.6%

2.7%

Amount of new lending to SMEs

$160

$180

Customer Perspective

Number of first-time homebuyers given a mortgage by Citizens Bank

90,000

88.000

Number of complaints (per 1,000 customers)

1.2

1.6

Number of talking cashpoints installed for the visually impaired

140

130

Number of wheelchair ramps installed in branches

70

60

Internal Processes

Number of processes in Citizens Bank simplified and reengineered

140

120

Number of new services made through mobile banking

3

6

Incidences of fraud on customers accounts or credit cards (per 1,000 customer) 4

9

Total carbon dioxide emissions (tonnes)

560,000

500,000

Learning and Growth2

Number of employees trained to provide advice to SMEs

1,200

1,400

Number of hours (paid by Citizens Bank) to support community

projects

500,000

450,000

Number of trainee positions taken up by candidates from Albions

most disadvantaged areas

2,690

2,500

Number of community organizations supported (either through funding

or by volunteers from Citizens Bank)

8,500

8,000

Required:

(a)

Why is the balanced scorecard a more appropriate approach to measure the performance

at Citizens Bank compared to a traditional approach reliant entirely on financial

measures? Explain.

(b)

Based on all the information provided, including Citizens Banks vision, mission and

values, discuss the performance of Citizens Bank in 20x0.

(c)

Discuss some of the advantages and disadvantages of using a balanced scorecard to

measure Citizens Banks performance.

ACW 271 MANAGEMENT ACCOUNTING II Semester 1, 2021/2022 Group Assignment Question Citizens Bank is an established bank in the nation of Albion. With a total of 125 branches across Albion, the bank is increasing its digital presence by offering a wide range of mobile banking services. The banks' clientele consists of retail and business customers. Among the services provided are for savings accounts, current accounts, business and personal loans, mortgages and credit cards. Citizens Bank's corporate vision is to be the bank of the people and a mission to serve all the banking needs of the citizens of Albion. To achieve this, the bank has the following values: 1. Placing customers' needs at the forefront. This involves understanding and anticipating customers' needs and making banking products and services available to the widest number of customers possible. Citizens Bank recently made a large investment in IT security to prevent fraud and also invested in technology to make services accessible to the visually impaired and other special needs customers. 2. Simplifying the business. This entails identifying opportunities to simplify activities and facilitate open and clear communications. 3. Making a positive impact on communities served. This involves serving the bottom 40% segment of society, new homeowners, and small and medium enterprises (SMEs) as well as being fair and responsible all the time. Extracts from Citizens Banks' balanced scorecard are shown as follows: Performance Measures 20x0 20x0 Actual Target Financial Perspective Return on capital employed (ROCE) 13% 14% Interest income $8.5m $8m Net interest margin (margin achieved on interest income) 2.6% 2.7% Amount of new lending to SMEs $160 $180 Customer Perspective Number of first-time homebuyers given a mortgage by Citizens Bank 90,000 88.000 Number of complaints (per 1,000 customers) 1.2 1.6 Number of talking cashpoints installed for the visually impaired 140 130 Number of wheelchair ramps installed in branches 70 60 Internal Processes Number of processes in Citizens Bank simplified and reengineered 140 120 Number of new services made through mobile banking 3 6 Incidences of fraud on customers' accounts or credit cards (per 1,000 customer) 4 9 Incidences of fraud on customers' accounts or credit cards (per 1,000 customer) 4 Total carbon dioxide emissions (tonnes) 560,000 500,000 Learning and Growth 1 1,200 1,400 500,000 450,000 Number of employees trained to provide advice to SMEs Number of hours (paid by Citizens Bank) to support community projects Number of trainee positions taken up by candidates from Albion's most disadvantaged areas Number of community organizations supported (either through funding or by volunteers from Citizens Bank) 2,690 2,500 8,500 8,000 Required: (a) Why is the balanced Scorecard a more appropriate approach to measure the performance at Citizens Bank compared to a traditional approach reliant entirely on financial measures? Explain. (b) Based on all the information provided, including Citizens Bank's vision, mission and values, discuss the performance of Citizens Bank in 20x0. (C) Discuss some of the advantages and disadvantages of using a balanced Scorecard to measure Citizens Bank's performance. a