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Financial Branch Performance Profile trial
results
Summary
The revised profile audits were significantly successful
in both key measures; both increased efficiency of
detection levels and also earlier detection.
Results of the pilot indicate that circa 3 times as many
branches with losses are being identified using the new
Profile when compared to the current. Approximately one
in five (20%) of the branches put forward for audit
showed a loss of £1,000 or more and/or resulted in the
agent being suspended.
The pilot also indicates that losses are being identified
at an early stage as the average loss is lower than that
for other audit types, for example, Special audits. This
achieves one of the primary objectives and supports the
principle of ‘nipping in the bud’ the potential for
larger losses if detected at a later stage.
These are the high level findings. Further work is to be
carried out once March’s audit results are received to
analyse in which specific data streams losses are being
identified and provide a full impact assessment on
potential savings.
Aim
The aim of the trial was for the audit team to conduct
100 pilot audits from the new Profile. These were to be
split into 50 from November’s data for January’s audits
and 50 from December’s data for February’s audits.
Methodology
The actual total number conducted was 98. Ideally the top
50 branches from each month’s Profile would be the ones
to be audited, however there were several valid reasons
why this was not possible. Firstly, some branches had
been audited recently so any audited within the past 3
months were replaced on the schedule. Secondly, several
branches from the previous month’s Profile will always
appear on the next month’s so these were also replaced.
All replacement branches were taken from the next in
order on the Profile.
Findings
e Audits based on the new Profile produced a ‘hit
rate’ of 20%, meaning one in five showed a loss of
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£1,000 or more and/or resulted in the agent being
suspended.
e This compares with the current Profile which had a
hit rate of 8% over the same period. It is also
worth noting that random audits produced a hit rate
of 7% and Special audits 41%.
e Losses identified at the 20 ‘bad’ branches from the
new Profile totalled £71k with an average loss of
£3.6k. This compares with an average loss of £9k
from the current Profile and £15k from Special
audits. This appears to show that the new Profile is
identifying risky branches earlier.
e Escalating branches for Special audit is extremely
manual and resource hungry and the branches in
question have often been ‘losing money’ for a number
of months. This may explain the higher average loss.
e The average loss for losses above £1k for all audit
types is £12k, thus implying that the new Profile is
‘nipping losses in the bud’. Using this average, we
could say that the new Profile has reduced potential
losses by £168k for the 20 ‘bad’ branches.
When the initial Profile review was undertaken, branches
with a loss of £3,000 or more and/or resulted in the
agent being suspended were classified as ‘bad’. This was
because in several instances, losses over £1,000 do not
result in a suspension.
Using these hit rates, the new Profile has a hit rate of
15%, which is 3 times higher than that of the current
Profile and 5 times that of random audits, which can be
taken as the baseline.
Table 1: Count of branches with loss >£1k and/or agent suspended (“bad”) in Jan and Feb 2012
Count of Audit Code
Audit Code Bad Good Grand Total ‘Hit rate’
110 (All New Profile pilots) 20 78 98 20%
YTD
100 (current FBPP) 101 1,118 1,219 8%
150 (Random) 13 172 185 7%
200 (Special) 126 180 306 41%
Grand Total
Table 2: Count of branches with loss >£3k and/or agent suspended (“bad”) in Jan and Feb 2012
Count of Audit Code
Audit Code Bad Good Grand Total ‘Hit rate’
110 (New Profile pilots) 15 83 98 15%
YTD
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100 (current FBPP) 63 1,156 1,219 5%
150 (Random) 6 179 185 3%
200 (Special) 100 206 306 33%
Grand Total
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