Businesses across all industries are becoming more and more reliant on access to real-time data to make decisions in order to grow their business, and financial services is no exception.
The financial services sector is awash with terabytes of data coming from a multitude of disparate sources – from internal applications and departments, to external sources such as Bloomberg or Yahoo Finance. To make all that data truly work to their competitive advantage, businesses need a consolidated view.
What has historically been a highly manual and labour intensive task, is being transformed by business intelligence (BI).
What is business intelligence?
BI is transforming the way companies are managing their data to make solid business decisions and define strategies for future growth. First and foremost, it enables companies to collate and transform all their data from disparate sources to create a unified source of information that can be quickly accessed in easily understandable formats by any user with the right level of permissions. It provides easy to understand visualisations of data that enable users to drill down and uncover actionable insights. And it provides greater visibility into current and historical data to enable a better understanding of trends.
Benefits of business intelligence in financial services
While BI has its specific mission for each type of financial services organisation, there are some common benefits across the industry.
Risk reduction
Risk management has always been a top priority for the financial services industry. A well implemented BI solution will help reduce risk as it relates to company reputation, security issues, regulatory compliance, customer behaviour and more. By tracking customer behaviour firms can quickly detect fraudulent activity. They are also using the data they have at their disposal, along with information relating to the current economic climate, to analyse credit portfolios and spot any weak or strong points.
Customer retention
Customer retention is at the top of the list when it comes to driving profitability in financial services and personalisation is key to gaining that competitive edge. Armed with the real-time customer data that BI delivers, businesses can offer personalised experiences to their customers and tailor products and services to their individual preferences and needs. Companies that are delivering this kind of value to their customers are experiencing increased loyalty and reduced churn.
Product and service enhancement
BI is also playing a key role in product and service development. It enables businesses to quickly and easily determine the profitability of their products and services. Once they’ve established which are performing well and which are underperforming, they can make informed decisions on marketing and pricing, as well as which products or services need to be enhanced or discontinued.
Operational efficiency
Operational efficiency is key to any company’s success and BI is helping businesses make important decisions with regard to their internal operations. They are using the data extracted from BI to assess resource allocation, operations procedure, employee productivity, technology efficiency and more, to determine where costs can be cut and where operational efficiency can be increased.
Marketing optimisation
The opportunities presented by BI tooling for customer relationship management (CRM) data is giving businesses valuable insight into the profitability of marketing campaigns – measuring email performance, advertising spend and overall campaign success, can help determine which messages are resonating with customers and identify opportunities for improvement.
While the concept of deploying business intelligence solutions is appealing to many financial services companies, the reality of implementing a successful BI strategy can be challenging given huge volume of data running through the industry. That’s why many mid-market financial services firms are turning to specialist Managed Service Providers to help them on their BI journey.
