Cloud Financial Reporting and Budgeting Software for Banks

This article will focus on Cloud Financial Reporting and Budgeting for Banks.

New technology has drastically changed the way we communicate. – My 18-year old daughter has just discovered the show called The Office starring Steve Carell.  The show came out in 2005 and we are wrapping up season two. What is striking is that all the sales representatives have flip phones and need to return to the office and login to their laptops or personal computers to transact business.

In 2007, everything changed as the iPhone hit the market.  It seems like overnight, everybody can now transact business via their mobile devices.  In the same way, banking executives will soon be getting all of their financial reports on their mobile devices as Cloud Financial Reporting and Budgeting Software for Banks will become all the rage.

What is Cloud Financial Reporting and Budgeting Software for Banks? – A good definition would be a Financial Planning and Analysis (FP&A) tool that has specific banking modules that run in the Cloud.  Let’s break this definition into three parts.

FP&A tool – Since accountants are responsible for this function, any decent FP&A tool will utilize Microsoft Excel as the report writer.  Excel already comes loaded with formulas and functions that accountants are familiar with such as the SUM function and ability to add, subtract, multiply, and divide.

Another key feature of the tool will be its ability to allow Excel to automatically load data  from disparate data sources such as legacy systems, OLAP cubes, and data warehouses.  A couple of Excel add-ins that connect to “live” data sources are Spreadsheet Server by Global Software, GL Wand by Excel 4Apps, and BI360 by Solver.

Direct connect tools are okay if you have just a single data source like a general ledger.  If you want to report against multiple data sources, you will want a solution that will aggregate data from many data sources into a data warehouse.  The benefits of having all of your data in a single source include vastly simplified reporting and analysis as well as the speed as only one connection is needed versus many connections to many data sources.

A couple of good tools that come with data warehouses are Hyperion by Oracle, TM1 by IBM, and BI360 by Solver.  Hyperion and TM1 store their data in proprietary OLAP cubes while BI360 stores its data in Microsoft SQL Server.  One of the benefits of having data in SQL Server is broad support for  many popular visualization tools such as Tableau, Power BI, and Qlik View.

Banking Models – Having tools that add and subtract is just a start.  Banks have a few requirements that are a little more complicated that just simple math.  Banks need customer profitability in order to make informed pricing decisions.  Customer profitability is a sum of a customer’s individual accounts added up at the customer or household ID.

In order to calculate account profitability, your tool will need to support Funds Transfer Pricing (FTP) and Activity Based Costing (FTP).  FTP allows bankers to calculate the Net Interest Margin (NIM) at the individual account level.  ABC allows bankers to assess costs at the account level as well.  With fees already being captured at the account level, accountants will have all the ingredients to calculate profitability at the individual account level.

Axiom EPM by Axiom Software and BI360 by Solver are good tools that offer FTP and ABC support out of the box.  There are consulting firms that will calculate FTP and ABC for banks in a service bureau type of model.  They will take monthly data feeds from their client banks, apply the rates and calculations, and return the results banks to the banks for them to analyze.  One good firm that offers this service is ECHO Partners.

Cloud-based – the advantages of having a cloud-based solution are many.  Salesforce, a pioneer in cloud computing, sums up the benefits of Cloud in an excellent article:

1. Flexibility – Cloud is very scalable from one to thousands of users.
2. Disaster recovery – Cloud providers do all the data backup and have redundant data sites in case one goes down.
3. Automatic software updates – The days of booting everyone off the system or coming in on Saturdays to do software updates are over.
4. Capital-expenditure Free – No more upfront costs for hardware and software.
5. Increased collaboration – The days of e-mailing Excel spreadsheets to everybody goes away.
6. Work from anywhere – All you need is an internet connection.  You can even work on that six-hour flight from New York to Los Angeles.
7. Document control – Put all your reports in one place where everyone with the right security can access them.
8. Security – No longer to you have to worry about sensitive data stored on laptops that can easily get lost or stolen.  Cloud companies are spending millions of dollars are year to secure your data.  Banks just cannot afford all the data security that Cloud providers offer.
9. Competitiveness – Get the best of breed tools up and running in weeks as opposed to buying good ones that become outdated every couple of years.
10. Environmentally friendly – Eliminate the carbon foot print of multiple banking data centers by combining them into a single Cloud provider’s location.

The two Goliaths that can offer all of the benefits of Cloud are Amazon with Amazon Web Services (AWS) and Microsoft with Azure.  There are a few good Corporate Performance Management (CPM) solutions that run on these services.  Adaptive Planning and Domo both run on AWS while BI360 runs on Azure.

Who meets all the criteria?  – As we discussed, we are looking for an FP&A tool that has FTP and ABC for banking that runs on the Cloud.  BI360 is a solution that will satisfy all these requirements.  BI360 is also offered on premise, if necessary, and can be migrated to Cloud later on.

Whether you are still nervous about Cloud reporting solutions or are ready to embrace them wholeheartedly, 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 users.  Be one of the first to start viewing your financial reports on your mobile device with Cloud Financial Reporting and Budgeting Software for Banks before all your executive friends do.