This article will focus on BI Tools for Banks.
Business Intelligence (BI) definitions – TargetTech defines BI as a technology-driven process for analyzing data and presenting actionable information to help corporate executives, business managers and other end users make more informed business decisions. Gartner says that BI is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance. Webopedia says BI represents the tools and systems that play a key role in the strategic planning process within a corporation. These BI systems allow a company to gather, store, access and analyze corporate data to aid in decision-making. The main theme among these various definitions is that BI encompasses tools that help with decision making. When it comes to banking, there are many use cases for BI.
Qubole wrote an excellent article entitled, “Applications of Business Intelligence in Banking and Finance” that outlines some of the uses.
- Improved Operational Efficiencies: Banks cannot afford to just add employees to grow revenues. They must continually seek ways to make their existing workforce more efficient. BI solutions for banks can be used to analyze operational processes to help reduce ongoing costs and/or maximize existing resources and expertise. For example, by analyzing the performance of your branch personnel that interact with your customer base, banks can find out ways to improve and enhance the customer experience at the point-of-contact.
- Improved Products and Services: Business Intelligence tools for banks are being used to track customer, product, and branch profitability. The bank can modify pricing or business processes to improve the profitability and track the improvement. BI tools are being used for predictive analytics as well to determine which customers might be interested in purchasing which product when and by what method (in-person, over the web, direct mail). With all this new data, banks can create new and improved products and services to better meet customer needs and improve their competitiveness in the marketplace.
- Improved Marketing: Armed with profitability and demographic information on their customer households, banks know what a good prospect looks like and will be better able to market to them. Banks can also create more effective cross-sell and up-sell campaigns by knowing who of their customers to make a marketing pitch to. The payoff is huge as research show that it is five times cheaper to sell to existing customers that it is to obtain a new one.
- Improved Customer Retention: Armed with customer profitability information, banks can come up with more cost effective ways of interacting with money losing customers. For example, a customer making cash withdrawals from the bank to pay bills might be persuaded to use online banking to pay bills if educated on the benefits. Online banking has been shown to be a cheaper service than teller transactions involving a human. Being able to track customer habits, preferences and behaviors will enable banks to customize their products and services in ways that meet needs, solve problems, and promote customer retention and loyalty.
- Developing New Investment Strategies: BI tools can also monitor trends outside the bank for alternative investment strategies. Analyzing data that comes from social media, investors can gain specific insight on sentiment and develop trading signals. Whole new categories of investing are emerging from utilizing analytics and business intelligence applications.
- Risk Reduction: As the banking universe becomes more complicated and integrated, the risk factors become much more diverse as well. Fraud is probably the number one risk that banks need to mitigate. Looking for suspicious behavior in checking account and credit card usage is key. Tracking employee behavior for suspicious trades, withdrawals, expenses, and lending will reduce the risk of lawsuits and embezzlement. Scanning past dues and repayment activities may be able to spot general trends such as an economic slowdown.
What business intelligence tool for banks makes sense for you? As you can see, there are many use cases for business intelligence tools for banks. Jack Henry, FIS, and Fiserv are probably the three most popular core banking systems out on the market. Let’s review some of the business intelligence tools that work with these platforms.
Jack Henry offers Cognos® BI to its customers for business intelligence and enterprise reporting. Cognos BI, offered through a strategic partnership with IBM®, supports banks’ business intelligence and dynamic reporting requirements, and significantly decreases the time and cost historically required to generate and distribute enterprise-wide decision-support information and reports.
FIS offers business intelligence through its IBS Sales and Service business unit in the form of consulting services. A recent job posting by FIS asks that applicants have prior experience with the SAP BusinessObjects. SAP BusinessObjects is a flexible and scalable, self-service BI tool that makes it easy for users to discover and share insights.
Fiserv offers business intelligence to its customers in the form of services as well.
With global delivery centers in the U.S., India, and Costa Rica, Fiserv can help you generate insights with an optimal mix of on-site and offshore associates. The statistical modelers, business, database and IT analysts in our analytics practice couple banking domain experience with expertise in statistics and technology to bring valuable insights to you.
Solver, Inc. offers BI360 business intelligence that will work with all three core providers. Solver’s BI360 is a complete Business Intelligence (BI) and Corporate Performance Management (CPM) suite with reporting, budgeting and dashboard modules. The BI360 suite also offers a data warehouse to combine your data sources and to empower all business users with self-service analytics critical to fast and efficient decision-making.
Whether you are new to business intelligence for banks or have been at it for a few years, BI360 by Solver is a tool that will grow with your bank’s requirements and complexities. Solver, Inc. is happy to answer any questions and review BI360’s easy-to-use, Excel-based reporting and forecasting solution for banking BI users. Make sure you are making the best data driven decisions by investing in the right business intelligence tools for banks today.