In this highly dynamic market of tough competition and high customer demands, technology is transforming the banking and finance industries with Business Intelligence solutions.
According to JP Morgan’s financial reports, the company invested $9.5 billion in technology for enhancing its existing digital financial services. These figures show how technology has transformed the banking and finance sectors.
Business Intelligence In The Banking And Finance Sector
With the rapidly changing customer demands, business intelligence tools need to be powerful to perform risk management and to take care of customer demands.
Making accurate business decisions depend on BI tools that also increases profitability, creates a competitive edge over other marketing peers, reduces risks, and much more.
Let us walk through the major features by which Business Intelligence tools drive the finance and banking sectors forward, giving them a cutting-edge performance over their competitors.
Role Of Business Intelligence In Banking And Finance Domain
Many financial and banking industries have leveraged the benefits of BI implementation for analyzing and rectifying operational issues in real-time. This makes the industries more convenient to make investment decisions with great accuracy. Pattern identification and analysis of business insights from the past have resulted in positive outcomes.
Business intelligence can be defined as a collaboration of tools and technology, together with techniques to perform complex functions that otherwise would have been dependent only on human activities.
Ray Kurzweil of Google forecasts that by 2019, BI would have outperformed human intellect rather than just Artificial Intelligence and Basic Data Analytics!
Key Problems That Banks And Financial Industries Face: How BI Can Tackle Them All
The key challenges that banks and financial institutions face mostly can be identified as the inability to tackle the increasing growth of data, the cut-throat competition between various banking sectors, and lack of resources with proper technological know-how.
Besides, the fear of overcoming the issues of data operating in various departments in silos, transactions in the past, security concerns, compliance factors, etc. have made their influence.
Business Intelligence helps banking and financial industries to overcome these challenges by helping clients with a personalized experience in banking and financial services, mitigating risks, reducing costs and other overheads, fraud detection and many more.
Business Intelligence helps the banking and financial sectors by providing a reliable platform where customer service can be performed with ease and also improve productivity in all financial transactions.
With the availability of excellent e-commerce and social media tools, it is simpler for banking and financial industries to excel with BI techniques to overcome these challenges.
Why Banks And Financial Institutions Must Embrace Business Intelligence Solutions
There is immense scope for Business Intelligence in the future as more and more industries that have adopted BI tools have had positive outcomes.
Creating new investment strategies such as developing innovative models for gaining critical insights and risk reduction have resulted in increased adoption of Business Intelligence in the banking and financial sector.
Let us walk through the major benefits of adopting Business intelligence and how it can be leveraged for an enhanced financial and banking experience.
1. Business Intelligence Tools For Profitable Marketing
Analyzing the customer base deeply is the key to profitable marketing in banks and financial industries. It helps in identifying new opportunities in cross-selling and up-selling. Analyzing and studying past buying patterns of customer behaviour online helps in identifying the right target market without having to shoot campaigns and trying to sell services in all directions.
CRM data is used to analyze customer profiles to identify selling opportunities. Researches have shown that there is around 5 times profitability to sell financial services with BI tools rather than trying to sell services to new customers.
2. Considerable Reduction In Risks
Risk management tools benefit from the implementation of Business Intelligence techniques. Banking and financial institutions require critical information to safeguard operations and transactions from possible risks.
For instance, fraudulent activities have been on the rise and BI provides crucial insights from past transactions and tracks internal employee behaviours to safeguard transactions.
This ability of tracking also helps financial institutions and banks to stay on par with new regulations and rules in trading.
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Another major risk mitigation that can help banks and financial industries is the estimation of customer loans. It is important to have the customer’s revenue data as well as his financial assets in order to detect possible delinquency situations.
3. Improving Performance And Operational Efficiencies
Maximizing existing resources as well as reducing costs is critical for any banking and financial sector. Business Intelligence solutions can be implemented to analyze workflows and operations that will help in improving the expertise of existing resources and also in reducing additional overheads and costs.
For financial organizations to improve operational efficiencies, uncovering potential savings is crucial which is performed by implementing business intelligence techniques to monitor regulatory changes, disintermediation risks and possible market shifts, etc.
4. Knowing Your Customers Better
Business Intelligence tools help you understand your customers better. With business intelligence, banking sectors can anticipate customer requirements and respond accordingly.
BI provides tools and techniques to identify why and to what services customers respond often and more. Customer churning can be significantly reduced by BI implementation with its ability to track customer preferences and behavior online.
Implementing BI favors the financial industries to organize the services that will earn them customer loyalty and boost customer retention.
5. Improving Financial Services And Products
Product usage in this digital era makes use of critical data and insights from previous transactions to determine improvement strategies for banking products and services.
It is thus important to analyze product usage and various revenue streams to determine which services and products are profitable for the organization.
Customer requirements analysis is performed by learning their earning patterns along with tracking their spending patterns and deriving insights out of the same. This helps in creating a competitive edge over other financial firms operating otherwise.
6. Predicting Effective Investment Strategies
With development models around social media and data playing the role of a king, use of excel sheets no more counts valid and accurate, rather as time-consuming.
Predictive analytics is the new agenda that prepares and predicts effective strategies for banking and financial institutions for new and effective strategies for gaining insights.
Understanding customer spends, various investment categories, the global supply of various commodities, etc are required as other key strategies for a positive outcome.
To learn more about how to effectively enhance your financial services, call us today and our team of strategists and experts will guide you through the steps to create a profitable and efficient business with detailed analytics for your business and operations!