From Coarse to Precise: How Intcube EPM Bridges the Gap Between Budget and Business in the Financial Industry_Trends_北京智达方通科技有限公司

Looking at the overall landscape, interest rate liberalisation has entered a phase of deepening reform, with persistently narrowing net interest margins becoming a normative pressure for the banking industry. At the same time, regulatory requirements concerning capital adequacy ratios, liquidity risk, and look-through disclosure are becoming more detailed year by year, and strategic directives such as technology finance and green finance also need to be implemented through substantive resource allocation. In an environment of multiple superimposed constraints, comprehensive budget management in financial institutions is upgrading from a traditional financial accounting tool into a core management infrastructure supporting strategy implementation and risk compensation capabilities. How to accurately allocate limited financial resources to high-value business segments and achieve a dynamic balance among cost, risk, and return in the process is a critical issue currently facing financial management in the financial industry.

Core Challenges in Comprehensive Budget Management in the Financial Industry at the Current Stage

Weak Strategic Transmission Mechanisms, Significant Discrepancies Between Budget and Business

Budget preparation in many financial institutions still remains in the model of headquarters setting targets and cascading them down through various levels, lacking standardised processes for decomposing strategic intent into actionable business drivers. In most institutions, budget preparation is disconnected from long-term development strategies, and strategic intent fails to be effectively translated during the budgeting process, resulting in resource allocation that does not genuinely reflect strategic priorities. During the transmission of targets from headquarters to regional offices, from business lines to branches, the value orientation attenuates step by step, ultimately leading to significant discrepancies between the final budget plan and the actual conditions on the front line.

Fragmented Business and Financial Data, Budget Preparation Relies on Manual Operations

There is a lack of effective data integration mechanisms between front-end business systems in the financial industry (such as core trading systems, credit management systems, customer relationship management systems, etc.) and back-end financial systems. Traditional budget management models are struggling to fully adapt to the demands of business diversification and informatisation development, with business budgets and financial budgets failing to connect effectively. Common problems include inconsistent data definitions, version confusion, and redundant effort. This is particularly true for financial institutions with numerous branches and outlets, where bottom-up budget consolidation cycles are long and error rates are high, making it difficult for headquarters to grasp the real budget status of different regions in a timely manner.

Narrowing Interest Spreads Force Refined Management, Cost Allocation Lacks Precise Tools

The persistent narrowing of interest spreads means financial institutions must shift from extensive scale expansion to refined value management. This requires clear answers to: What is the true profitability contribution of each product, each customer, each channel? What business output corresponds to each expense? However, traditional cost allocation methods are relatively coarse, and the allocation standards for common costs often rely on empirical settings. This approach neither accurately reflects the actual resource consumption levels of different business lines and product lines, nor effectively combines cost information with FTP pricing and risk-weighted asset measurement, ultimately leaving profitability analysis superficial.

Insufficient Dynamic Forecasting Capabilities, Struggling to Support Agile Operational Decisions

Adjustments in macro policies, fluctuations in market interest rates, and changes in credit risk all require financial institutions to possess the ability to quickly reassess operating results. However, most institutions' budget systems operate on an annual cycle, and mid-year rolling forecasts still rely on offline manual adjustments, making it difficult to conduct high-frequency, multi-dimensional scenario simulations and sensitivity analyses. When external conditions change, management cannot promptly grasp the adjusted profit impact and resource gaps, resulting in a significant lag in decision-making bases.

Building Closed-Loop Management Capabilities: Intcube EPM's Systematic Response Approach

Addressing the pain points above, the Intcube EPM system, based on its self-developed multi-dimensional database technology, constructs a full-link management closed loop for financial institutions covering strategy decomposition, budget reporting, execution control, rolling forecasting, and profitability analysis.

In the strategy decoding and budget preparation phase – the system supports the step-by-step decomposition of institutional strategic targets by organisational level, product line, and regional dimension into specific business drivers and financial indicators. Through a unified budget model, the system can automatically link business volume forecasts (e.g., loan scale, customer growth, transaction volume) with financial budgets, ensuring that the calculation of every expenditure is justifiable. For large financial institutions with multiple levels of branches, the system provides a two-way process management mechanism of bottom-up consolidation and top-down target setting. Headquarters can formulate standardised key expenditure benchmarks for personnel compensation, premises rental, marketing, etc., while branches simply need to fill in streamlined business volume information. The system then automatically generates budget amounts based on preset benchmarks, significantly reducing reporting complexity and human error.

In business-financial data integration – Intcube EPM connects with core trading systems, credit management systems, and financial accounting systems through standard interfaces, integrating front-end volume and price data with back-end cost and expense data into a unified multi-dimensional data platform. The system's built-in cost allocation engine supports the collection and reallocation of common costs by dimensions such as business line, product, channel, and customer, enabling precise tracing of indirect costs (e.g., personnel, premises, IT operations) to the business periphery. It outputs profitability analysis reports covering business line, product, and customer levels, providing solid data support for resource allocation optimisation.

In the budget execution control phase – the system features a budget control service centre independent of business systems. This centre centrally maintains control rules and budget limits for various expenditures and can achieve two-way integration with processes such as financial reimbursement and procurement approval. At pre-event and in-process business nodes, the system automatically verifies available budgets and implements alerts or rigid controls, while simultaneously writing execution results back to budget execution reports in real-time. It supports step-by-step drill-down from aggregated data to specific application documents, forming a complete closed loop from total amount control to detailed traceability.

In dynamic forecasting and operational analysis – the system supports the construction of rolling forecast models at monthly, weekly, or even daily frequencies. Users can set different hypothetical scenarios for key variables such as revenue, cost, and risk weighting. Leveraging its multi-dimensional calculation engine, the system automatically performs full recalculation and outputs real-time profit and loss statements, capital consumption, and key ratio change data under different scenarios. When facing interest rate adjustments, regulatory policy changes, or internal strategic shifts, management can quickly obtain quantified financial impact assessments, significantly enhancing the forward-looking nature and responsiveness of decision-making.

Practical Observation: A Budget Management Upgrade Practice of a Financial Leasing Company

A financial leasing company, one of the first leasing companies established in China, focuses its business on multiple sectors including high-end equipment manufacturing, green energy, inclusive finance, and infrastructure. Its leasing assets and business partners are spread globally.

With the expansion of its business segments, the company operates multiple parallel business and financial systems. Due to a lack of data sharing and inconsistent definitions across these systems, the finance department had to repeatedly communicate across departments via phone and email during budget preparation, waiting for the IT department to export raw data. Sometimes, resolving a single division's budget issue could take several days. This not only prolonged the annual budget preparation cycle and increased manpower input but also, coupled with frequent organisational restructuring, led to chaotic budget version management, making it difficult for the enterprise to achieve effective resource allocation through budgeting.

After introducing the Intcube EPM system, the company initiated a reconstruction of its budget management system. The project team first systematically structured the dimension systems of each business segment and built a unified budget model based on multi-dimensional database technology, integrating the budget logic of different business forms such as high-end equipment leasing and green energy projects onto a single platform. The system completed data integration with existing leasing systems, treasury systems, FTP systems, and financial accounting systems, unifying indicator definitions. During budget preparation, historical operational data could be directly referenced, eliminating the need for repeated offline communications. Simultaneously, the system set budget preparation requirements and access controls for different statuses such as submission, revision, approval, adjustment, and execution, effectively resolving the version chaos problem.

Currently, the enterprise has broken down data silos between core business systems through the budget management system. The budget preparation cycle has been significantly shortened. The finance department has been freed from repetitive report organisation work and is beginning to invest more effort in operational analysis and forecasting. Management can view the budget execution status of each business segment in real-time through the system. Decisions are supported by traceable data. The rolling forecast mechanism has also been successfully established, allowing business plans to be adjusted promptly based on changes in project requirements.

The upgrade of comprehensive budget management in the financial industry is essentially a leap in the finance function from accounting to operational management. This not only requires the system to handle complex multi-dimensional calculations and process collaboration but also necessitates incorporating strategy, business, finance, and risk into a unified analytical framework. The Intcube EPM system, based on independently controllable multi-dimensional database technology and through building a closed-loop budget management and profitability analysis system, helps financial institutions accurately allocate limited resources to the most valuable business segments, thereby establishing sustainable financial competitiveness in the long-term trend of interest rate liberalisation.