How do financial institutions use BI?
New technologies are part of every stage of our development. With them comes a really large amount of data, which gives us the opportunity to gain a deeper insight into the behaviour of customers and the industry in which we operate, as a whole. Research shows that 90 per cent of the world's data has been generated over the past two years. Therefore, all entrepreneurs who are serious about the development of their businesses should implement business intelligence practices to fully exploit their data resources. This also applies to banks and financial institutions.
What is Business Intelligence?
The term Business Intelligence (BI) refers to the practice of transforming large amounts of data into information. It can be said that the purpose of Business Intelligence is to present data in a new, easy to understand way so that it can be used to support key business decisions.
Business Intelligence in financial institutions
Appropriate aggregation and understanding of a large amount of data available in the banking and financial sector is not an easy job. It would be an extremely tedious, overwhelming and time-consuming task if it had to be done manually. Given the amount of information that most companies have scattered across different applications and services, achieving a 360-degree view of customers and business as a whole is a challenge for any business.
For this purpose, tools such as Microsoft Power BI are used to quickly understand, analyse and find value in large datasets. They also give a better insight not only into historical but also current data and thus enable a better understanding of trends as well as the implementation of forecast analyses.
Microsoft Power BI effectively combines data from different business applications to create a single source of information that can be used by any employee of a financial institution. What's more, Power BI provides:
- Better insight into all the activities of a bank or other financial institution,
- Quick access to information in easy-to-understand formats,
- reduction of business risk.
How can the financial industry use the knowledge gained in this way?
First of all, to:
- a better understanding of customers' purchasing behaviour,
- adjusting the offer to the actual needs of customers,
- supporting budgeting and planning processes,
- measure the effectiveness of marketing campaigns,
- making sales forecasts and financial estimates,
- analysis and improvement of operational efficiency,
- to create reports,
- risk assessment,
- the elimination of fraud,
- examination of the compliance of activities with the binding legal regulations.
The scope of BI use in financial institutions is really very large. The challenge for the industry is to adopt banking systems to handle large data sets. Implementation of Business Intelligence class systems, such as Microsoft Power BI, should always be supported by a needs analysis and adjusted to short and long-term goals of a given bank or financial institution.