2. BUSINESS ANALYTICS
It refers to the skills, technologies and practices which is used for continuous iterative
exploration and investigation of past business performance to gain insight and drive
business planning. Business analytics focuses on developing new insights and
understanding of business performance based on data and statistical methods. It also focuses
on using a consistent set of metrics to both measure past performance and guide business
planning, which is also based on data and statistical methods.
3. BANKING AND FINANCE
Banking and Finance explores the dynamic, fast-paced world of money, shares, credit and
investments. Finance is an essential part of our economy as it provides the liquidity in terms
of money or assets required for individuals and businesses to invest for the future.
4. USES OF ANALYTICS IN BANKING
AND FINANCE
Technology has given rise to powerful business intelligence tools. These tools which the
banking and finance industry can use to leverage customer data for insights that can lead to
smarter management practices and better business decisions. There are various uses of
business analytics in Banking and Finance which are discussed in the following slides.
5. • Improved Operational Efficiencies: In today’s ultra-competitive marketplace financial
institutions need to be as lean and efficient as possible. Using BI solutions to analyze
operational processes, organizations can reduce ongoing costs and maximize existing
resources and expertise. For example, by analyzing the performance of customer-facing
employees, such as sales personnel, tellers, and account managers, organizations can
discover ways to improve and enhance the customer experience at the point-of-contact.
6. • Improved Products and Services: BI solutions allow organizations to track individual
revenue streams to better determine which products and services are profitable and which
are not. But the benefits don’t stop there. Business Intelligence solutions also enable
financial organizations to analyze vast amounts of customer data to gain insights about
customer needs and sentiments regarding banking that can be used to improve products and
services. As an example, perhaps it is learned that customers want a quicker, easier way to
track and analyze their earning and spending patterns. Institutions, may be able to send more
timely alerts to customers. Or they are looking for a smoother and less complicated
application and funding process. Armed with these kinds of insights, organizations can
develop new and improved financial products and services to better meet customer needs,
and in turn create a competitive edge.
7. Improved Marketing: Using BI, marketers can analyze CRM data based on a range of
criteria to uncover the most profitable customer profile. In addition, the customer base can be
analyzed to identify and develop new cross-sell and up-sell opportunities, and to carry out
more targeted online marketing campaigns. This presents a major advantage, as research
shows that it costs five times more to sell financial products and services to new customers
than to existing customers.
8. Improved Customer Retention: As previously discussed, BI applications can help financial
institutions identify and pursue those customers that are the most profitable. BI also plays an
important role in improving customer retention and loyalty. Using business analytics tools and
techniques, organizations can discover the reasons why customers switch to a competing
institution. They can then implement new processes to help reduce customer churn. The ability
to track customer habits, preferences and behaviors also allows organizations to tailor their
products and services in ways that meet needs, solve problems, and promote customer
retention and loyalty.
9. Developing New Investment Strategies: Asset managers are utilizing new data sets to
develop new strategies for investing. By developing models around social media, investors can
gain specific insight on sentiment and develop trading signals. Other research analysts are
using satellite imagery to understand global supply of commodities like oil & gas or
triangulating consumer spend based on the number of cars in shopping center parking lots.
Whole new categories of investing are emerging from leveraging analytics and BI
applications.
10. • Risk Reduction: The financial world is constantly changing and filled with uncertainty.
More than ever, banking and finance institutions need to use every tool at their disposal to
reduce risk. Fortunately, today’s Business Intelligence solutions provide actionable
information that organizations can use to mitigate risk in several areas. The ability to track
customer transaction histories allows institutions to quickly detect and reduce the incidents
of fraudulent activities, the most notable being credit card fraud. The ability to track the
communications and behavior of internal employees in trading securities helps institutions
comply with new regulation frameworks brought on by the 2008 financial crisis and recent
insider trading cases. Unlocking data from siloed asset class systems could help global banks
predict credit risk for counterparties across all asset classes.
