The latest technologies are transforming the business landscape on a daily basis. We can easily see those changes in a wide range of industries, and the financial sector is no exception. Mobile devices, applications, automated tools, and the internet have opened the door to increased competition and various client demands, as well as necessitating strict control and risk management in a fast-growing market.
There is near-unanimous acknowledgment among financial professionals about the transformative role that data plays in the success of digital banking. Moreover, a bank needs data and analytical capabilities to stave off challenges such as lack of data integration, which could limit the insights required from traditional banking structures.
In this particular context, financial companies started to integrate new technological models like Business Intelligence solutions to face internal challenges and market competition. According to Gartner, the concept of BI in the financial industry refers to the applications, infrastructure, tools, and best practices that enable banks and financial organizations to access and analyze the information provided by various transactions and channels, so that they can optimize their decisions and services they offer.
Here are some ways Business Intelligence is improving the finance and banking industry by impacting on profitability and operations.
The consumer challenge
As technology evolves, so too does what consumers expect from products and services. Thus it is becoming more and more challenging to meet their needs. As the latest World Retail Banking Report says, consumers are unwilling to purchase additional products from their primary bank, and they are also more likely to abandon them if they face even minor issues. Offering a hyper-personalized experience with the help of Business Intelligence is increasingly becoming the benchmark for measuring how banks perform.
For financial companies, the opportunity to personalize their customers’ experience lies in their raw data. What is even more interesting is that clients are also willing to provide more information about themselves in exchange for customized services. This is the moment where Business Intelligence tools show their potential and help organizations derive contextual values across the entire customer lifecycle. In time, BI solutions can generate more targeted and valuable leads by analyzing transactional, behavioral, and social data in addition to traditionally structured datasets. This is an excellent way for management teams to decide which offer is right for each group identified through BI.
Additionally, the selling process is not the last step towards creating a great experience. The ability to track and monitor product usage could offer organizations valuable insights into upselling or cross-selling, as well as other aspects that are establishing the consumers’ loyalty, or the opposite.
The challenge of fraud
In the past few years, losses through fraud in the banking industry have increased significantly. With channel proliferation and rising transaction volumes, conventional security systems are unable to cope with the emerging threats. Let’s take an example: cross-channel monitoring is not simply a case of aggregating and analyzing data. It is in fact very sophisticated, and without the right tools, it might not flag suspicious behavior. That is why more and more Business Intelligence solutions have recently been implemented in the financial industry.
BI can accurately track multiple channels and platforms companies use and detect patterns across individual transactions. By learning standard usage patterns, advanced analytics provided by BI solutions can flag even the smallest deviations, such as the way a password is entered.
Furthermore, BI solutions could be integrated with an external screening system and unstructured data sources, such as geolocation, for instance, to augment the detection process and to reduce the incidence of false alarms.
Last but not least, one more aspect we should know about BI solutions is that it could also proactively predict threats and automatically prevent them from happening. That is an excellent way of ensuring the customer’s experience is positive.
The compliance and risk management process
Financial industry regulations are evolving rapidly. Today, a series of rules could pose severe challenges to conventional compliance structures. Not only is the sweeping scope of new compliance regimes an issue, but so is the complexity of the new reporting norms and the level of detail and accuracy required.
Business Intelligence plays a central role in addressing those issues. It could help companies in the transition stage to create a more structured and strategic approach to data. The new plan will enable proactive regulatory risk management and open a new dimension in risk analysis techniques by combining social data and traditional purchase transaction data.
The main advantage for financial companies is that they could leverage analytics to develop a unified business perspective towards risks and impact by connecting multiple layers of compliance and management.
Moreover, BI solutions will help companies comply with the analysis and reporting forms the new regulatory environment demands, as well as also enabling a quick transition in case of change.
The financial industry is changing fast, and companies face the need to adapt to new market requirements and consumer behavior. However, each time organizations face difficulties in maintaining their competitive edge, the latest technologies are there to help. For financial institutions, Business Intelligence can be the solution to multiple issues, from personalizing experiences to adapting to new regulatory environments. What is more, companies should keep in mind that their approach is unique and so too should be the BI tool they adopt. When it comes to achieving specific business objectives, customized technologies are the most suitable choice.