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Business Intelligence

Banks increasingly are turning to business intelligence (BI) tools to transform data into actionable information. By helping banks better understand customers' needs, BI initiatives can create competitive advantage and lead to increased customer wallet share.

Q: What does business intelligence mean for banks today?

Joe Dugan, Canandaigua National Bank and Trust: BI means increasing customer wallet share by providing financial products based on a superior understanding of customers' characteristics, needs and behaviors at any given point in the customer life span. Business intelligence helps us take what we know about the customer base and offer customers education, advice and services that are most relevant to them at their specific life stage or event.

Being able to forecast a customer's value over time leads to greater wallet share than only concentrating on the already high-value customers. The cost of acquiring new customers is significant, so today's BI systems must deliver actionable activities that can provide measurable results for the financial institution and help to increase share of wallet for all customers.

Jill Barnes, IndyMac Bank: The customer wants to be known individually, and business intelligence gives you the opportunity to do that. You can hang free checking banners, offer competitively priced products to meet every conceivable need and proclaim your superior service, but your competitor down the street is doing the same thing. It's only by taking advantage of business intelligence technologies that you can differentiate your bank by sincerely knowing your customers and appropriately responding to their needs. Business leaders can drive this by challenging their staffs to push the limits of what our systems can tell us about our customers.

Howard Shao, EMC Corp.: For today's banking institutions, business intelligence software is a means to respond to transactions and static data. As banks shift from sales to a customer-centric business model, BI will adopt an information-aware infrastructure model that supports global, distributed BI while protecting the security and privacy of this information.

Q: What are the capabilities of an "intelligent" bank? What are the keys to a successful BI strategy?

Shao, EMC: The intelligent bank is one with greatly improved business intelligence within and across the enterprise and value chain. It has greater visibility into -- and can adapt to -- changing market conditions and customer demands. Greater visibility enables an intelligent bank to respond effectively and make more-sophisticated predictions and decisions about its future profits, new products and services to customers, in addition to the investment and allocation of assets. These attributes (i.e., increased visibility, improved decision making and agility) are the metrics upon which a bank with an effective BI strategy is judged.

Susan Duchesneau, SAS: Two keys to success are executive sponsorship and a solid partnership between business and IT. Intelligent banks achieve competitive advantage by knowing more than their competitors. All banks know their current positions (e.g., financial, customer, employee, etc.) and how they compare to past performance and current objectives; the intelligent bank knows more -- it can accurately predict the future. It can predict the impacts of certain actions on future performance, enabling it to make the most competitive tactical and strategic moves.

For competitive advantage, a BI solution must be smart, transparent and scalable. Smart: A BI solution must go beyond reporting current and past performance; it should accurately predict future performance and model the impact of change on future performance. Transparent: Everyone from senior management to regulators wants to see how you arrived at your numbers; BI platforms must offer transparency from source data to report. Scalable: You can achieve competitive advantage by leveraging your BI investment longer than your competitors. BI platforms must scale as your business grows, eliminating the productivity hit and expense of a system replacement.

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio

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