With new technologies such as mobile devices, computers, and the internet of things (IoT) around every corner, the amount of big data we generate every day is only expected to grow. In fact, 90 percent of the world’s data has been created in the last two years. While the influx of data allows banks and financial institutions to gain a better understanding of customer behavior and the industry as a whole, they must implement business intelligence practices (financial reporting) to make the most of the data revolution.
What is Business Intelligence, and how does it work?
The practice of converting big data into actionable insights is known as business intelligence (BI). The goal of BI reporting is to present data in new, simple ways so that it can be used to support important business decisions.
The insights gained by the banking and finance industries can be used to:
- Recognize customer purchasing patterns.
- The budgeting and planning processes will be aided.
- Determine the success of a marketing campaign.
- Make sales forecasts and financial projections.
- Analyze and improve the efficiency of your operations.
- Organize data and generate reports in order to meet regulatory requirements.
How Is Business Intelligence Being Used In The Finance Industry?
Isn’t business intelligence a fantastic concept? Every industry can benefit from data that is easy to comprehend from financial reporting which apply to real-world decision making. However, making sense of the massive amounts of data available in the banking and finance industries is no simple task. If done manually, it would be extremely tedious, overwhelming, and time consuming.
Given the vast amount of data scattered across various applications and services, achieving a 360-degree view of your customers and business as a whole can be difficult for any company of any size. A unified aggregate of data is a must-have for using business intelligence practices to your advantage. That is why companies are turning to software tools to quickly comprehend, analyze, and extract value from big data.
Business Intelligence Tools
Microsoft Power BI, for example, is a business intelligence software tool that provides easy-to-understand data visualizations to help organizations uncover actionable insights. You can better understand trends and implement predictive analytics with more visibility into your historical and current data from financial reporting. These tools can combine data from various business applications to create a unified source of information that can be accessed by anyone in your organization.
Business intelligence software eliminates the tedious work by creating a central repository of data in a simple platform that allows you to:
- Data from a variety of business applications and services can be combined.
- Gain a better understanding of your entire company.
- Information can be accessed quickly and in easy-to-understand formats.
Now, let’s consider if you are on the verge of making the BI the fuel to your revenue. Then what benefits can you avail from big data and financial data analytics software.
Business Analytics Tools Reduce Risks
By assisting you in putting data into action, business intelligence tools can help you mitigate risks. You can quickly detect fraudulent activities by tracking customer behavior. You can also ensure that employees are following industry regulations by tracking their behavior.
You can analyze credit portfolios and spot possible instances of delinquency using the data you have at your disposal, as well as information about the current economic climate. Business intelligence tools, in general, are a proactive way to mitigate risks in any financial sector.
Enhances Internal Operations From Financial Reporting
Your internal organization’s efficiency is just as important as your customers’ impressions of your company. Using business intelligence software solutions to assess resource allocation, operational procedures, and employee performance is a data-driven approach. Your data can show you where you can save money, improve customer service, and increase operational efficiency.
In today’s mobile world, each of us generates vast amounts of data that, when combined, it allows for the prediction of future consumer behavior with accuracy previously unattainable. After analyzing 12.4 billion transactions in 2017 and 2019, JPMorgan Chase & Co. discovered that consumer spending growth was declining, according to the Harvard Business Review. This aided in informing their ongoing strategy and identifying which offerings would be best suited to a specific demographic.
Even if you can easily acquire customers, you won’t be able to maintain consistent growth unless you keep your current customers. Business intelligence can also help here by identifying areas where the customer experience can be improved. Machine learning is used to predict when current customers were likely to leave or reduce their business. As a result, finance managers were able to create targeted campaigns that reduced churn by 15%.
BI Dashboards For Analytics
Without poring over endless spreadsheets or becoming an amateur data scientist, key decision-makers at any company must be able to quickly understand what actionable insights can be gleaned from a data set. This is where dashboards come in handy; by combining graphs, charts, animation, and other visual elements, a well-designed BI dashboard can convey the overall meaning of a data set in seconds rather than hours. Fortunately, there is no shortage of powerful financial business intelligence software that can assist you in moving beyond simple spreadsheets and into visualizations that make data easier to understand.
Obtaining And Maintaining Compliance
Regulatory costs have risen dramatically in the years since the 2008 financial crisis, outpacing bank profit growth. As a result, many financial institution executives are concerned about ensuring compliance in a more efficient manner. Business intelligence can make regulatory compliance easier by assisting with data collection, analysis, and compilation.
Today, finance departments in your organization can comprehend how time and resources are allocated by measuring business performance by sector and individual. This data can then be used to set departmental budgets and personnel goals, as well as to figure out what kind of continuing education would be most beneficial for improving productivity.
The right software tools can provide comprehensive business intelligence capabilities that go above and beyond your organization’s expectations. A cloud-based business analytics service, is delivered by PathQuest® BI in collaboration with Microsoft. For more information on the product or to speak with an expert, please contact us.