What’s the future of BI? Financial business intelligence solutions, coupled with powerful visualisation tools, are helping the banking industry to perform faster, more in-depth analysis for data-driven decision making.
How business intelligence impacts companies
Insights gained via business intelligence can be used by the banking and financial services industry to:
- Better serve customers through analytics
- Improve products and services so they are better aligned to customer needs
- Increase customer retention
- Improve marketing penetration (for example, maximise cross product holdings)
- Deliver increased revenue and greater cost savings
- Improve operational performance
- Better predict sales and financial performance
- Improve management of risk and regulation requirements
- Simplify regulatory reporting demands
- Gain insights and early warnings of unforeseen events such as mass withdrawals due to panic
- Better manage risk profiling of customers
BI creating waves in the financial sector
While the concept of financial services business intelligence is appealing to many banks, the reality of implementing a successful BI strategy can be challenging, especially when you consider the sheer volume of data running through the B&FS industry. Trends in business intelligence further complicate the landscape, as staying up-to-date of evolving technologies and methodologies becomes crucial for effective decision-making. Additionally, achieving a 360-degree view of a bank’s customers is no mean feat when data is dispersed across various core banking applications, services, and departments, even for smaller organisations.
That’s why banks looking to gain a competitive advantage need the right BI solution in place to help them quickly integrate, understand, analyse and find value in their essential data solutions for banking and financial sectors. So, what is the future of business intelligence?
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BI for the finance and banking sector
The right BI solution for a bank or financial institution will provide data dashboards and visualisations that are easy to understand and help staff to uncover actionable insights. Banks will also benefit from having greater visibility across all their relevant data (current and historical), which means they will be in a better position to understand trends and optimise their product and customer strategies.
In addition, the right business intelligence data strategy can integrate all the disparate data that is held across different applications and departments throughout the bank. This process of merging data can be described as “creating a unified source of information”, which anyone in the organisation can access quickly and at any time, assuming they have the right level of permissions.
BI applications in banking
Business intelligence provides a range of valuable benefits for banks and financial institutions:
Reducing risk
In the rapidly changing and highly volatile financial world, banks need fact-based actionable information to reduce risk wherever possible.
A properly implemented and carefully considered BI solution will enable risk to be mitigated in the banking sector. For instance, banks can use BI to detect and reduce incidents of fraudulent activity quickly and efficiently by tracking customer behaviour such as credit card transactions. Another scenario is calculating the probability that a customer will default on a loan and estimating the cost of recovery. BI can also be used to accurately estimate the risk of customer loans based on factors such as the borrower’s financial assets/earning capacity and the current economic climate.
Customer retention
Banks can retain more of their existing customers with the help of BI tools. If products or services are underperforming, for instance, customer data can be analysed to identify customer sentiment and behaviour. This information can then be used to make major improvements or develop entirely new products that meet customers’ current needs and promote loyalty.
Business analytics tools can also identify a financial institution’s most profitable customers, which will help banks to market products that are more relevant while making greater efforts to retain and grow their business in the long term. With accurate customer data, banks can create personalised experiences that give them a competitive edge.
Consider this scenario: A financial institution discovers that thousands of customers are abandoning an online form at the same point. The bank can use this insight to improve the user experience, personalise the form, or find other ways to address this pain point.
Improve products and services
The future of BI: With the help of BI platforms, banking and financial organisations can examine their revenue streams to assess the profitability of products and services. After they identify which products are performing well (and which are not) they can make informed business decisions in areas such as marketing, pricing, and which products to discontinue.
Improve internal operations
The efficiency of any bank’s internal organisation is just as important as their customers’ experience. Using business intelligence is a convenient and data-driven way to assess resource allocation, operational procedures, and the performance of employees.
Data can help banks to identify areas where they can cut costs, improve the customer experience, and maximise operational efficiencies.