A financial institution is any business that collects money from clients that it invests in financial instruments, such as stocks and mortgages. Some of the most common kinds of financial institutions are banks, credit unions, insurance companies, and investment firms. Managers of financial institutions often are responsible for hiring employees, developing business models, and overseeing financial planning regarding cash flow and investments. Optimization of workflow, implementation of financial strategies, and design of client service models may be included in the management of financial institutions.
Management of financial institutions often requires that individuals in leadership roles optimize workflow. Workflow describes the stages through which a document passes. An insurance company, for example, passes all of its claims through a workflow. It begins when a claim is filed by a client and ends when a claim is approved or declined. A manager of this kind of financial institution might be responsible for ensuring that all departments are communicating clearly and efficiently. Likewise, a manager makes sure that guidelines are in place which dictate the chronology of workflow stages, as well as tasks performed at each stage.
Many financial managers believe that processes always can be improved. For this reason, analysis of workflow processes and consistent improvement is part of the management of financial institutions. A manager might be responsible for introducing new software or systems. He or she might decide to create new positions, hire new employees, and terminate employment of professionals who are not performing well.
The success of an institution's investment strategies can determine the financial health of a financial institution. Professionals who are responsible for the management of financial institutions normally oversee investment portfolios. They make decisions based on perceived risk of investments and potential gains. Most managers hire a team of financial analysts who can provide projections based on market behaviors and economic indicators.
Another common focus of management of financial institutions is the development of new products and services. A bank manager, for example, might think of new incentives to encourage more individuals to open checking accounts. Health insurance company managers might adjust plans to reflect the needs of clients and costs of medical procedures.
As with most businesses, financial institutions depend largely on their reputability in the eyes of clients. For this reason, professionals who perform the management of financial institutions may help to develop images and branding that can make them more appealing. They might study market research to determine why some clients are unhappy with their services and why others are satisfied.