By Rajat Sharma, Onward Systems
Many banks are in survival mode. Some will survive, some will merge or get bought, and some unfortunately will have to close business. What does a bank need in tough economic times? A bank needs cash flow, customer retention, to maintain profitability, and to find ways to increase revenue. How is all this possible in a survival mode? By investing in business intelligence is one promising way.Business Intelligence is the process of analyzing a company's historical and real-time data and deriving information to help grow the company's bottom line.
How is this done? Quite often, banks have a tough time getting a complete relationship profile of a customer. Knowing the complete relationship helps in cross-selling and identifying the total risk exposure the customer has to the bank. It also helps in understanding the profitability contribution of each customer relationship to the bank. Profitable customers need more attention so that they can be retained. Unprofitable customers need to be turned around before they become losses to the bank, or simply dropped from future business.
Why has this been so hard to do for some banks? Many banks suffer from poor quality of information. Customers have different portfolio numbers in various core product systems making it impossible to get a unified customer view. The solution is to clean and integrate the data from the various product systems into a single customer number view.
Power at the desktop-what is it, and why it so important? Typically at banks, the users of reports are dependent on the IT group to produce the reports. Due to backlog, IT departments may sometimes take days to respond. The same delay may also occur when requesting changes to existing reports. Efficient business processes cannot wait on information delays because this impacts timely business decision making, decreases productivity, leads to customer dissatisfaction, and negatively impacts a bank's bottom line.
There are SaaS (Software-as-a-Service) business intelligence solutions available to help banks deploy a BI solution easily without burdening the IT departments. Each user has the reporting/analysis capability on individual desktops via a simple Internet browser interface that doesn't rely on IT. Users can run pre-existing reports, modify them, or create brand new reports easily on their own-no complicated software installations and no support headaches. Many banks are looking into these types of solutions.
Good data integration, high data quality, information timeliness, smart business analysis, ease-of-use, cost-effectiveness, and minimum support requirements are all components of a good business intelligence solution.
Compliance reporting made easy An organized business intelligence data repository makes it simple to perform compliance reporting and quickly respond to FDIC exams.
Business Intelligence: small investment, large gains. A relatively small monetary and time investment in business intelligence can reap millions of dollars in return for a bank in a relatively short time-something definitely worth looking into to help banks emerge more successfully from the current turbulent times.
Rajat Sharma is the CEO of Onward Systems, a business intelligence company.