Importance Of Business Intelligence in Banking and Finance

Business Intelligence solutions are not new to the Banking, Financial Services, and Insurance (BFSI) domain. They help enhance the operations for the sector by identifying, analyzing, addressing, and resolving issues in real-time and more.

Also, while many financial institutions have already started benefitting from the BI, the full potential of this technology is yet to be discovered. Real-time business intelligence makes information processing convenient and for decisions to be made faster with accuracy.

Through this article, we will cover the essentials of business intelligence in the banking and financial industry.

Table of Contents:

• Why Should Financial Companies Focus on Business Intelligence?
• How Business Intelligence Drives Profitability in Banking, Financial Services & Insurance Industry
• Use Cases of Business Intelligence in Banking

Currently, over 2.5 billion gigabytes of data is generated globally daily. With financial companies putting their data to work, they can gain actionable insights for a competitive advantage. In addition, with business intelligence tools being leveraged, bringing disparate data from various applications creates a unified source of information that anyone in the company can utilize.

BFSI domain faces the challenges of rising competition, risk management, and changing customer demands. BI tools aid them to leverage customer data for deriving useful insights. They help with analyzing trends, identifying patterns, and equipped with real-time reporting. BI offers them a flexible and transparent approach to make better financial operations and decisions.

Listed are some of the pointers that highlight how BI in banking & finance sectors offer a definite competitive advantage:

1. Ease of Data Handling
For any banking institution to remain competitive, it must constantly adapt to evolving customer needs. BI solutions analyze and turn the data into actionable insights by aligning it with market trends. This includes information about customer behavior, needs, and preferences As a result, organizations can offer better financial services with the ease of data handling.

We at Rishabh, make use of business intelligence & data visualization tools like Power BI to determine;

• Nature of customer service: Track customer requests, complaints & suggestions, the time taken to resolve them, and monitor the performance of departments involved in addressing issues.
• Resource allocation & optimization: Collect data for peak hour or peak transactions, customer volume across branches to plan and assign resources to manage requests and increasing conversions.
• Mobile and Internet Banking: Analyze the volume of daily online transactions and their types.

2. Enhanced Work
Business intelligence in financial industry helps track the performance of various departments and employees by analyzing throughput volume, service delivery cycle time, error rates, service quality CSATs. With this kind of information, organizations get insight into their business operations. Let’s take an example. Banks utilize business intelligence to determine customer needs and how their employees can respond to such demands. As a result, they can offer a better customer experience.

Rishabh offers data visualization services that provide insights via visual dashboards to help decision-making. They help spot trends, track business goal achievements & comparing the performance across categories – products & services. All this enables financial institutions to get intelligent insights across multiple areas like sales, marketing, cross-selling, and compliance in real-time.

• Financial Data Monitoring: To track expenses, profitability for improved financial forecasting and budget planning to identify and manage financial risks.
• Sales & Marketing Analysis: Gain accurate insights on branch performance, sales performance, profitability attribution, and track credit pipelines.
• Data Team: Data architects & data analysts can stay on top of the information journey to ensure secure storage and governance of valuable business evidence.

3. Improved Customer Retention

BI tools help financial companies to identify and pinpoint the reasons why customers switch to the competition. They reveal what the customers want – an easier way to track income & spending patterns. With this, companies can improvise and provide better products & services improving customer retention & loyalty.

All of this means delivery of seamless customer experience via –

• Customer segmentation that helps design personalized campaigns, cross-selling & upselling strategies.
• Customer sentiment analysis that helps assess the product/service quality with profitability analysis to optimize the sales funnel.

4. Risk Management
The finance industry is volatile with sudden and uncertain changes. BI applications in banking and financial sector help to detect and reduce fraudulent activities to minimize risks. A robust BI solution can ensure compliance with national and international regulatory standards.

Our team has the proficiency to build custom BI applications integrated with analytics capabilities to efficiently identify, measure, track and analyze operations. With a complete range of reporting templates, the financial institution can create and extract real-time reports, graphs, tables & dashboards to monitor performance in real-time. Some of the essentials include;

• Conducting risk assessments
• Tracking incidents, occurrences and actions
• Managing data for investigations, audits & inspections
• Managing controlled documentation
• Facilitating employee training, inductions and competency assessments

5. Real-time Reporting
BI in banking sector provides visualization of historical and current data of the company to identify customer behavioral patterns and potential blockages in the system. With real-time visibility into operations, they offer the right insight across use of resources, teller performance, use of counters, wait times to get a live snapshot of appointments. It offers visual cues to take necessary actions to achieve goals. This data can be filtered by location, bank branch, products, offerings & transaction types to identify the areas required for maximum effectiveness.

Our team helps provide end-to-end visibility by empowering banks with custom BI solutions that;

• Better adjust to the individual’s customer needs
• Foster collaboration between business and IT teams
• Create a solid base for security and compliance reporting
• Optimize the management information system (MIS)

Read about the importance and advantages of BI applicable for various industry verticals.

1. Fraud Analysis
According to a global banking survey published by KPMG, financial frauds have increased both in volume & value. This has made fraud detection and prevention the top priority of every bank.

So when a Canada-based credit union bank turned to Rishabh Software to develop a robust fraud management system, we delivered an advanced risk prevention BI framework. It enabled the client to support 1 million transactions per second with 100% accuracy!

Beyond delivering a faster, safer, and convenient experience, the solution also:

• Simplified payment processing
• Triggered warning signals to take preventive action
• Tracked in-process transactions in real-time
• Blocked fraudulent credit cards & payments in real-time

2. Cross-Selling
BI solutions help conduct a win-loss data analysis to predict acceptance rates for upcoming cross-selling initiatives.  An Asia-based financial services institution wanted to increase its revenue through cross-selling insurance policies. For this, they needed an intelligent solution that could:

• Analyze the CRM data
• Uncover customer trends
• Identify the customers that are most likely to convert based on their purchase history of other products.

The created Business Intelligence & Analytics help desk designed for the customer helps:

• Generate excel-based analytics reports
• Identify potential customers most likely to convert based on their buying behavior and profile

It helped increase the conversion rate and revenues while reducing the incurred costs on expensive statistical tools.

Last Words
Advanced business intelligence platforms like Tableau, Power BI, and more are transforming the financial services sector. Going forward, we would witness more banks and NBFCs implement BI solutions to boost productivity, manage risk & design customer-centric offerings. They will be better positioned to enjoy sustainable growth.

As an experienced business intelligence services company, we specialize in building and implementing BI solutions across industries. Based on our experience with several successful implementations globally, the application of BI in financial services helps optimize all the processes that are discussed in this blog.