What Is MVA?
MVA is our integrated solution that unifies profitability, pricing, and funding analytics to show where value is created, where it is consumed, and how to optimize for the future.
Multidimensional Perspective
Analyze value across products, services, channels, member segments, and credit tiers.
Data-Informed Decisions
Leverage activity-based costing, transaction data, and FTP to improve decision-making.
Strategic Alignment
Align pricing, capital, and resources with your institution's strategic priorities.
Actionable Insights
Identify opportunities, optimize performance, and drive sustainable value.
Reduce Risk,
Improve Returns
Understand true economic value and manage risk with greater confidence.
What's Included in MVA?
A comprehensive view of the economic drivers that influence product value, profitability, pricing, and strategic decisions.
Integrated Profitability Analysis
Combine activity-based costing with transaction data to measure the true profitability of loans, deposits, services, and more.
Funds Transfer Pricing (FTP)
Incorporate economic funding costs and rate risk into pricing, profitability, and strategic decision-making.
Granular Segmentation
Analyze performance by channels, member segments, products, geographies, and credit tiers.
Marginal Contribution & Economics
Measure marginal contribution, economic value, and capital impact to prioritize what drives results.
What-If Modeling
Use our Product Value Simulator to model pricing, volume, mix, and strategic changes to see the financial impact.
The results you can expect
THE MANAGEMENT QUESTIONS MVA ANSWERS
Which customers
create long-term value?
Identify relationships that deliver sustainable economic value after funding, servicing, risk, and capital.
Which products deserve
more investment?
Understand the true economics of every product before committing additional resources.
Which channels
are creating value?
Evaluate branches, digital, call centers, relationship managers, and indirect channels.
Where are we
wasting resources?
Find activities, processes, and structures consuming resources without creating proportional value.
What should
management do next?
Prioritize pricing, products, staffing, marketing, and initiatives based on measurable impact.
WHAT IS MVA?
Multidimensional Value Analysis provides a complete management view of enterprise profitability across every dimension of your business.
Traditional reports look backward. MVA looks across the entire enterprise—showing you where value is created, where it is at risk, and where to focus for the greatest impacts.
Every answer comes from the same integrated economic model—ensuring decisions are consistent, aligned, and based on a single source of economic truth.
MULTIPLE VIEWS. ONE MODEL.
ENTERPRISE
VALUE MODEL
Multiple perspectives. One integrated model. One source of economic truth.
THE POWER OF FUNDS TRANSFER PRICING (FTP)
Funds Transfer Pricing (FTP) plays a critical role in assigning value to both loans and deposits in an equitable manner.
In a non-FTP environment, deposits appear to be all cost—creating a negative relationship value. Our intuition tells us that makes no sense as CDs do have value. We're just not measuring it properly.
Without FTP
In a non-FTP environment, the relationship appears to destroy value because deposits are treated as all cost.
This view suggests the relationship is losing money when, in reality, deposits do have value.
With FTP
In an FTP environment, the CD is assigned a revenue component and has measurable value—revealing a value-creating relationship.
With FTP, deposits are recognized for the value they bring, revealing a true, value-creating relationship.
Ignoring the value of your deposits can lead to a misunderstanding of where value is created and, in turn, bad decisions.
WHAT MVA LOOKS LIKE
Auto Loan Portfolio Summary
MVA Shows Where the Value Is
MVA provides instant analysis of many dimensions of the organization. It presents a variety of information such as portfolio statistics, annual P&L, portfolio analytics, and funding analysis in a concise format.
The ability to research into the specific of each revenue or cost component is its strength. You can trace costs all the way to an individual employee's time and hourly cost.
This example is of an Auto Loan portfolio. Notice that this is an unprofitable portfolio. This is common as auto lending is extremely competitive and few organizations make money in this market.
MVA Shows Going Digital Is Not Always the Solution
Herds of consultants today are singing the glories of going digital. However, going digital is not always the panacea they claim.
Here is an example where the digital (Click-in) channel is better, but still not enough to correct the issues with this portfolio. A Relative Portfolio Value of less than 100 indicates that this portfolio is destroying institutional value.
This information provides executives insight into what might be a good, value creating strategy or a bad strategy. In this case, before an executive heads off onto a digital strategy as a solution to their problems they might want to look elsewhere for the root cause. That's the real power of MVA as it let's you look in many places quickly and easily.
Digital Channel Performance
The digital (Click-in) channel is better, but still not enough to correct the issues with the portfolio.
Look beyond the obvious solution and identify the root cause of the problem.
Look in many places quickly and easily to understand where value is being created, where it is at risk, and where to focus.
A PERSPECTIVE OF MVA
As described previously, the biggest challenge in profitability analysis is NIE. The International Federation of Accountants have published a Costing Continuum Maturity Model which highlights best practices in cost analysis. According to those groups, most organizations are at the 3D or 4D level. Kohl's MVA solution is solidly at the 7D level as it is customer demand sensitive according to channel providing cost-to-serve at not only the customer/channel dimensions, but numerous other dimensions.
From Basic Reporting to Advanced Value Analysis
Basic bookkeeping
Process and team costing
Direct costs and operational output
More detailed operational costing
Standard costs based on activity
Path/activity-based costing
Level of effort by channel and customer
Unused capacity costs estimated and cost-to-serve
MULTIDIMENSIONAL VALUE ANALYSIS REFRESH
Multidimensional
Value Analysis
Refresh your insights as your business changes.
Optional MVA Refresh
A MVA Refresh includes your most recent MVA results updated with your current balance sheet mix and overall non-interest income and expense levels from the PVA. This ensures your profitability insights remain accurate, relevant, and actionable for the next quarter.
Use original PVA results adjusted for changes in product volumes, balances, rates and net charge-offs as well as overall non-interest income and expense. Time studies will not be updated. Changes in overall salary expense will be incorporated separately from other changes to non-interest expense.
Update member loan and deposit instrument data.
Update member transactions and other data used in the previous analysis.
Any changes to the original analysis may incur an additional charge.
Ready to uncover which products are truly creating value for your institution? Request more information or schedule a call to learn how a Product Value Assessment can strengthen pricing, guide profitable growth, and support better strategic decisions.
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