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Considering the volume of data financial service sectors disperse across applications, achieving a 360-degree view of customers and business as a whole can be challenging. This is where business intelligence for the financial services sector comes into play.
A robust BI solution for a financial services business helps convert a large amount of data into actionable insights. These insights are further used by organizations to make better strategic and tactical business decisions.
However, in order to leverage BI for maximum benefits, it’s important for financial companies to have a well-defined business intelligence strategy. A BI strategy is basically a blueprint for deciding how an organization will use data in its business.
A business intelligence strategy enables finance companies to organize, analyze, and contextualize business data from around the company. It addresses all the problems related to data and helps develop a unified system.
Today, in this article, we will dive deep to understand the benefits of a BI strategy and how to build a successful BI strategy for your banking and finance business.
A business intelligence strategy is essentially a roadmap that enables financial services businesses to measure their performance, identify competitive advantages, and make informed data-driven decisions using data mining and statistics. It also helps the company reap the rewards of having actionable insights.
On that note, here are a few perks of having a BI strategy in place for your financial business. So, let’s dive in!
Saves time: A good business intelligence strategy helps you choose, purchase and implement a software solution in the shortest, smoothest way possible. By having an established plan, budget, and training outline, you’ll save time that would otherwise be spent determining all these factors.
Boosts customer retention: Business intelligence in banking and finance institutions can keep marketing and sales teams armed with the most current information on customers. It can help identify an organization’s most loyal and profitable clients to market relevant products and services and enhance customer experience.
Offers competitive edge: BI strategy is helpful in comparing product or service offerings with your competitors to uncover ways of strengthening your competitive position in the market. It also helps you shortlist vendors that deliver the best BI solution for your finance business integrated with top-notch features. You can even test the BI solution and ensure it meets the requirements.
Saves money: A good business intelligence strategy helps save money in several ways. Firstly, determining the exact features you’ll use is one of the main ways to save money. BI strategy also helps prepare for the training offerings and associated costs. This will help you budget accordingly and reduce unforeseen expenditures.
Now that we have discussed what is business intelligence strategy in banking and financial services and how BI is useful for organizations, it’s time to look into the steps to build a successful BI strategy for your organization.
It’s vital that your BI strategy aligns with your business goals and vision. This initiative will place trusted, relevant data in the hands of the company and employees so that they can make informed decisions every day.
So, here are a few steps to follow when building a successful business intelligence implementation plan. Let’s get started!
To know where you’re headed, you must set a baseline. Say, for instance, you know that several departments have been using analytics, but the data has been mostly siloed – customer support is tracking user feedback for their own internal purposes, the marketing team doesn’t have access to sales information, or maybe there is no analytics at all – basically, all seems to work but how effectively is not clear.
So, the first step is to talk to all the key players involved in the current BI processes. As a result, you should be able to answer the following questions:
Knowing where you stand enables you to take additional first steps toward a formal BI strategy without disrupting good work that’s already being done in your financial business.
You are not going to get far with business intelligence in financial services’ initiative if you don’t have a unified vision and a clear agreement between stakeholders. So, it’s crucial to build a BI roadmap.
This is your overall strategy document highlighting your goals, vision, and the path you’ll take to reach there. It explains the scope of your vision and the overall hierarchy of responsibility. This, in turn, helps employees to stay on the same page, be aware of what’s been done and what’s coming up, and enable them to adapt to changes.
The BI for finance roadmap should focus on the following:
The main objective of business intelligence for financial services is to give an insight into your financial business operations. But in order to implement a successful BI strategy, you must first know what direction your business is going towards.
Else, you might end up tracking analytics that has no real impact on your business’s long-term goals.
For example, you might build a detailed market intelligence dashboard. But corporate might want to focus on the direct sales and partnerships model, rendering your marketing dashboard useless. So, it’s important to align the BI initiative with your corporate strategy.
You can have great financial data and substantial buy-in from stakeholders. But your BI for finance initiative will still be a failure if you’re measuring the wrong metrics. This is particularly challenging if your financial business has countless seemingly similar metrics.
So, look at your data sources and divide them into the following categories:
Tracked metrics – This includes data that you will track on a regular basis, but won’t use to measure performance.
Untracked metrics – This includes data that you won’t track. But this data should be available for future analysis.
KPIs (Key Performance Indicators) – This is a subset of your tracked metrics and will be used to measure your business’s performance.
In addition to your own data, you can also keep track of industry-wide metrics to benchmark your performance.
Finally, include everything you’ve discovered so far into a vision document. This is a short document outlining the broad goals of the BI strategy, what metrics you need to track, and how you will measure the performance.
You can use this document to evaluate the success or failure of business intelligence for financial services.
Before implementing a business intelligence plan into your financial company, set the terms and share the objective of BI with all your stakeholders.
As several employees and other stakeholders are involved in the data processing, make sure that everyone is on the same page and has a mutual perception of what business intelligence development strategy is.
While a BI strategy should include multiple stakeholders, it is imperative to have a sponsor to spearhead the implementation of the BI strategy. Chief financial officers or chief marketing officers are usually appointed for heading the BI strategy initiatives.
They can govern the implementation with a documented business case and be responsible for changes in scope. CMOs and CFOs also understand the organization’s strategy and goals and know how to scale the BI platform.
A BI team is responsible for implementing the BI strategy. Since BI draws data from different departments of an organization, it is important that your BI team includes all the necessary stakeholders from all the relevant departments such as finance, sales, and HR.
To give you an idea, here are some individuals that are typically needed in a business intelligence team:
Once you have your team, the next step is to put together your data.
Data is the lifeline for any business intelligence strategy. You need to figure out a way to capture data and turn it into insight. A sound data plan should be a part of your BI strategy. It should include the following:
Identify data sources: As a financial service business, you’ll have data from countless sources – clients, projects, sales, marketing, finance, etc. So, the first step is to identify all these data sources and their importance. While there is no fixed process to organize data, you can segregate them by department (finance, sales, etc.), function, or business impact.
This will help identify the most crucial metrics for your banking business and figure out how you will track them.
Create a visualization strategy: Data should always be presented in the right format, else it’s not useful. Therefore, your data plan should include a data visualization strategy. The strategy will focus on two important things – What metrics you’ll prioritize in your BI dashboard, and how will you visualize them?
The answers to the above questions will majorly depend on stakeholder preferences and your company’s vision. You can even create multiple dashboards for different stakeholders, depending on their choices. For instance, one stakeholder might prefer scatter graphs, while another might favor textual data.
However, it’s advisable to work with a designer to ensure your visualization strategy is easy to follow. Also, make sure your BI tool supports your visualization choices.
Developing an accurate budget is key to successful BI implementation. You can ask for a quote directly from the vendors you are shortlisting to get an accurate estimate of BI platforms. Don’t go for the expensive version with features that you are not likely to use. Also, underbuying is likely to result in an underdeveloped system that doesn’t provide what you need. Stay realistic and moderate when planning a budget.
Choosing the right BI partner is important if you want to create a successful BI strategy. You can compare different business intelligence software development partners on how well they are rated for different features. Combining this comparison report with reviews and eventual demos will help you choose the right partner for your financial business.
Once you choose the right software development partner, it’s time to plan your training program. Usually, vendors offer video training, live classes, and in-person seminars to get you set up and comfortable with the software. These offerings vary by vendor and come at different costs based on the platform but are pretty standard.
Training will also help employees learn about the best features and stay on top of data insights. It will also help overcome any challenges in business intelligence in the banking sector.
Another part of your process should be cleaning your data on a regular basis. Every year low-quality data costs over $9.7 million to American businesses as it results in low productivity and ultimately reduces the overall ROI.
Therefore, it has become crucial to maintain the cleanest data possible for better operational activities and decision-making processes. The ROI and the quality of insights you get will also depend on the quality of data you feed to power BI.
A sound business intelligence strategy makes it much easier to gather your data and make it accessible to your company’s decision-makers. You can follow the above steps to chart your BI strategy and bring clarity to your operations.
You can also make the process much easier by hiring our team of experts. At Appinventiv, our highly-skilled team of professionals will help design an effective BI strategy that will help accelerate business operations, monitor key metrics, and focus on specific customer data.
We also offer top-notch business intelligence services that utilize big data opportunities to grow revenue, reduce risks and optimize costs across the business. Additionally, our business intelligence capabilities can offer embedded analytics that is tightly integrated into your existing systems. This can, in turn, help introduce new targeted information to support additional awareness and decision-making.
If you want to know more about BI strategy and solutions, kindly contact us. We will be happy to help!
Q. What is a BI strategy?
A. A BI strategy is a roadmap that enables businesses to address all their data problems and needs, develop a cohesive system, and maintain it.
Q. What are the applications of business intelligence in the banking industry?
A. Some of the applications of BI in the banking industry are as follows:
Q. How would the banking industry use business intelligence strategy?
A. Business intelligence for financial services turns data into actionable insights. The banking and finance industries use these insights to understand customer behavior, analyze and improve operational performance, and gain a competitive advantage.