Importance of Accurate Financial Modeling

Accurate financial modeling is crucial for assessing market entry strategies, particularly in complex sectors like retail banking. A comprehensive model was developed to evaluate the potential for a foreign bank's entry into the U.S. market, specifically targeting the nine border states that interact closely with Mexico. This involved analyzing the costs necessary to build a retail branch infrastructure, covering everything from default rates to the associated servicing costs. By measuring critical outputs against real-world financials, the effectiveness of the model could be validated.