Institutions such as banks and brokerage firms are constantly flooded with data. This overwhelming amount of information can be difficult for a business to analyze, especially if no one is highly skilled at data analysis.
Business intelligence solutions can alleviate the stress of data processing and analysis by simplifying the presentation of data and offering unique insights into your financial institution.
What Is Business Intelligence (BI)?
Before diving into how financial institutions can use business intelligence, it is crucial to understand business intelligence. According to Tableau, BI is the combination of data visualization, business analytics, data tools and infrastructure, and ideal practices that will let businesses make more decisions and discover actionable insights based on data.
Simply put, business intelligence enables a financial institution to gain valuable insight into its organization by utilizing various forms of data. These insights can turn into well-informed decisions and can cover both internal and external matters.
Data Made Simple with BI
Big data is easy to analyze and comprehend with business intelligence. By taking complex data and transforming it into simple data and visuals like charts and graphs, BI can help any institution better understand the inner and outer workings of their business.
Business Intelligence Key Performance Indicators
When setting up BI tools, you’ll have to identify specific key performance indicators (KPIs) that your business would like to track. These indicators can span across several areas of your organization and can include metrics such as:
- ROI & ROE
- Individual or branch sales numbers
- The average cost to originate the loans you offer
- Average losses per account
These KPIs can be generated through a large amount of data and presented in an easy-to-understand way. These presentations can be charts, graphs, data tables, and several other simple data structures. The great thing about this aspect of BI is that it produces items that are actionable and can be done to achieve better performance.
Regardless of whether the data has to do with sales or individual employees, BI can offer insights into any of your departments, including IT, human resources, sales, and service. Some software even comes equipped with tools to pull information from other software, web addresses, and spreadsheets.
Cleaner Data Improves BI
Once you have determined what KPI metrics to focus on, the next step is to begin the process of incorporating business intelligence into your organization. Before successfully integrating BI into your business, you will more than likely have to perform a data cleanup and ensure all data is uniform across the board.
Banks and other financial institutions often have multiple different ways of reporting their data. This is especially true between the branch and national level. Often, individuals are supposed to track their performance and report it to their supervisor periodically. This data may be inconsistent across the company and can also be manipulated to look more favorable.
BI performs better and provides more accurate insights when data is uniform across the board. The best way to prepare for BI is to clean up all of your data and make sure that everyone is tracking and reporting performance the same way. This will help guarantee that you are receiving real-time analytics that accurately reflect the current state of your organization.
Business Intelligence for Financial Institutions
Whether your institution is a bank, credit union, brokerage firm, or insurance company, BI can empower your business to reach new heights. Through business intelligence tools and software, you can start to examine and make important financial decisions.
Better Insights for Your Financial Institution
Traditionally, banks measure and report statistics as averages. While this is fairly standard across the board and can also be performed with BI, more in-depth metrics can give a more reliable depiction of a business’s environment.
BI allows for segmenting all data and identifying areas of risk and underperformance. This enables financial institutions to allocate resources to departments in need and determine if any underperformers should be let go to improve a branch’s productivity.
Additionally, this microscopic view of your financial institution allows you to discover anomalies in reporting. These can be inconsistencies, such as data being left out or manipulated, and they result in skewed data. By fixing these problems, you can get a more accurate depiction of your company through data.
External Insights with Business Intelligence
Not only can BI offer information about your internal processes, but it can also give you a better understanding of your customers and offer you a greater sense of security and compliance.
Through the statistics generated through BI, you can better understand your customer base. Seeing how frequently individuals frequent a bank, how much money on average customers have in a mutual fund, or how many consumers are utilizing a majority of their insurance coverage can help you predict future consumer behaviors. When you understand this, you will be able to target your customers and improve overall sales and performance more accurately.
BI’s tracking tools can also warn you about any consumers that seem to be participating in fraudulent activities. Identifying these individuals and addressing the problem helps keep your financial institution more secure from criminals and ensures that you are complying with the regulations set forth by your industry.
Advantages of Business Intelligence for Your Financial Institution
There are a number of advantages that come with using business intelligence. What are some of the top items on that list?
Every business wants to increase its profits, right? After all, to be a successful business, money has to be made.
One of the ways to stay successful is to have a high number of returning customers. Estimates say it’s about five times more expensive to acquire a new customer than retain an existing one. By utilizing business intelligence, you can turn to data and analytics to see which actions work best for keeping your current customers around.
More Efficient Operations
You can become a better business by becoming more efficient and cleaning up processes. Business intelligence can help your financial institution find areas of inefficiencies. By turning those inefficient operations into more efficient ones, you can help reduce costs and make sure you’re focusing on the right actions.
Measure Marketing Efforts
How can you be sure which of your marketing efforts are working?
You might be investing heavily in email marketing, but is it working? Are you spending too much? How can you make it better? Business intelligence can help you optimize your marketing efforts to ensure you’re making the right decisions and getting the most out of your business.
Why You Should Choose Atiba for Your Business Intelligence
Business intelligence can be a highly rewarding tool to ensure your financial institution’s longevity. Having a reliable business intelligence service provider can ensure you are getting the most out of BI.
If you’ve got a BI project upcoming or just have a question about our service, reach out to us today!