Peer Groups: Get your best benchmarking
Peer groups are used, in general, for benchmarking. We all want to know, “How we are performing or matching up with our peers”.
Benchmark comparisons are as good as your best peer-group to compare against. Benchmarks are useful when the group consists of institutions with characteristics that are specific to the type of comparison. Characteristics that best work for a particular benchmarking should consist of a right balance and mix of banks.
What to consider?
- Comparable size – Banks that are similar size in terms of assets.
- Market served – Banks across similar markets of operations.
- Performance metrics – Key performance metrics that are similar to the bank, for example, like total allowance to loans.
- Group Size – The balance of right mix with right number of banks in the group. Meaningful analysis can be made with group sizes of 10-20.
While regulatory peer-groups give meaningful comparisons, a more insightful analysis can be done with targeted and specific groups defined for the benchmarking purposes. UBQuant supports build your own groups, along with the pre-defined regulatory peer-groups. Go ahead, and define a more innovative and realistic approach of using peer benchmarking using our platform.