Banks, like so many other organizations, are fundamentally built on data. So why do many of these institutions lack adequate tools to harness the power of this data?
From outside the financial industry looking in, banks appear to be nothing more than institutions built on money movement. And why not? Money is constantly coming and going in the form of deposits, withdrawals, loans, payments, etc. One might not realize it, but a checking account or even an individual’s entire life savings is simply a record in a database that is updated each time a transaction is made. Multiply this transaction by the thousands (or in some cases millions) of customers and multiply it again by the number of products and services offered by a bank, and you’ll realize that banks are sitting on a tremendous amount of data. So why do many of these institutions lack adequate tools to harness the power of this data?
Business intelligence (BI) is the process of unlocking advanced analytics and reporting capabilities and using them to help navigate a bank’s data to identify new opportunities, manage and mitigate risks, and make fact-based decisions. As the technology to access and analyze this data continues to advance, banks are realizing that they are sitting on a data gold mine! In fact, Forrester indicates that business intelligence has been listed as the top technology priority for CIOs across all industries for the last five years.
If BI is an unfamiliar concept, think about the popular website Mint.com. As a customer, your bank can now deliver the same financial analysis tools to the palm of your hand, on demand, or with each monthly statement. More importantly, as a bank, imagine the opportunities available by having the same financial profiles across all your customers. This is just one example from a single data type that will likely play a significant role in how banks look to differentiate their offerings.