Performance management systems and regulatory compliance in the banking industry –A case study of a Swedish niche bank

Detta är en Master-uppsats från Göteborgs universitet/Företagsekonomiska institutionen

Sammanfattning: Background and Problem: The regulations imposed after the financial crisis have created an opportunity for management accounting research. One area within management accounting is performance management which involves; identifying, measuring and developing the perfor-mance of individuals, and aligning this performance with organizational goals. To study this area, a framework was created by Ferreira and Otley (2009), called the performance management systems (PMSs) framework. According to researchers there is a gap in studying the design and use of PMSs in banks and financial institutions. However, a recent study about PMSs in Swedish banks was conducted by Lundberg (2013). It showed that banks only to a limited extent adapted their PMSs in response to the regulatory changes, and the author suggests that more research is needed.Aim of study: This study investigates how PMSs change due to three banking regulations. Also, what banks can do to increase performance by embracing the regulations is studied.Methodology: This study is based on a case study of a Swedish niche bank, which was chosen because niche banks were prior to Basel II not believed to be able to use their own risk models, something that the case company does. Interviews with key employees were the primary source of information for the empirical findings.Analysis and Conclusion: This study shows that banking regulations do have an effect on PMSs. However, a lack of coherence has limited the spread of the effect. This limited effect depends on poor coherence between the PMSs, which results in that the PMSs will not be uti-lized to their full capacity. The limited effect also depends on decoupling of performance management from risk management.

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