Future of Banking and Finance Is with BI

Author: Sud Gover

BI tools enable meaningful use of data for banking and finance holding the key to growth of retail banking.

Look at the 2016 trends - mobile delivery, digital customer experience, payments, and authentication and advisory services. Digital disruption is in full swing having the potential to ride high with consumer expectations or be left behind.

If we take a closer look at the digital disruption APIs (application programming interfaces) are the villain of the piece, which defines how software programs can communicate with other systems through cloud computing, wireless networks, and ubiquitous mobile devices. APIs are catalysts in the deployment of IT services by exposing data to banking and finance sector.

By 2020, there will be around 26 billion connected devices, and the IoT will create a global economic value addition of $1.9 trillion according to Gartner. The Implication is clear, the future of banking and finance hinges on gathering data of the customers - their demands, lifestyle practices, uniqueness, spending patterns, family background to provide:

  • Personalized marketing opportunities
  • Risk mitigation strategies
  • Customer retention
  • Cross-selling and up-selling opportunities
  • Micro-targeted campaigns

In a survey by CCG's about digital adoption by the Millennials threw up the following: 46% use checkbooks, 68% use online banking, 44% send money digitally and 39% use mobile remote deposit capture. Millennials in the U.S. expect more from banking and finance sector, a pointer to show why and how retail banking need to redefine its offerings to stay competitive.

Now check the data scenario:

  • 80 percent of the data created today is not structured that require sifting to get key data from unstructured data.
  • Data is not mined structurally as it is hidden within log files, stored on file servers, or found in social media.

This calls for advanced BI software for data mining. BI tools help businesses analyze data so that businesses in financial services can gain:

  • Data-driven decision-making by generating, aggregating, analyzing, and visualizing data to inform and facilitate business management and strategizing enabling business leaders to gain the insights.
  • Moreover other functions like data collection, data sharing, and reporting for reaching at informed decisions.

Meaningful use of data holds the key for competition and growth for individual firms. Owing to this banking and finance sector are taking data challenges seriously by compulsion or conviction. Success depends on leveraging data-driven strategies to innovate, compete, and obtain value from real time information.

BI covers areas like IT, strategy, managerial accounting, corporate analysis and marketing for banking sector to redefine its offerings. With BI capabilities banks can run reporting and queries and create dashboards for customized service.

The Digital world is constantly disrupting where only change is constant. Gartner predicts that by end of 2019, 25% of retail banks will use startup providers to replace legacy online and mobile banking systems as incumbent application vendors are slow to respond to new requirements. "Startups and emerging providers of digital banking platforms offer banks interesting opportunities for innovation," said Stessa Cohen, research director at Gartner.

Efficient, fast-working tools are required to keep banking and finance sector’s performance intact. For that we need steady progression in IT. Will startups rise to the occasion with relevant BI solutions? Let us wait and see.