IDC Financial Insights: Analytics in Financial Services Scott Lundstrom, GVP IDC ANALYTICS AND VISUALIZATION FOR THE FINANCIAL ENTERPRISE CONFERENCE June 25, 2013 The Langham Hotel Boston, MA

1. Analytics in Financial Services
Scott Lundstrom
GVP & GM IDC Financial Insights

2. IDC Snap Shot
Market Intelligence, Research and Advisory
• 1200+ analysts providing a global information community
• Coverage of 50+ countries around the world
• Almost 50 years experience analyzing IT and Communications end-
user and vendor markets
IIAR “Global Analyst Firm of the Year” 2012

3. World Wide Financial Services
The Dynamics of 2013
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4. Macro Priorities
 Optimize Capital
 From balance sheet planning and performance, to liquidity
management, to IT investments, capital optimization is king
 Create Omni-channel Experience
 A more consistent customer experience across
all channels and a strong move to mobile
 Renew IT Infrastructures
 Legacy infrastructure continues to plague performance
 Weather Economic Turbulence and Regulation
 Find value in uneven markets and make compliance risk a
predictable operating expense.

5.  Exceed the expectations of current and targeted
customers
 Continually streamline business processes to
achieve profitability, flexibility and adaptability
 Maintain constant awareness using analytical
competencies of external and internal events and
risks to better shape strategic decisions and
tactical initiatives
 Build in evolving local, country and regional
regulations
An Operational Vantage Point
Continuing Global “Reality”

6. A New Platform for the New Reality
 Big data, cloud, mobile and social
technologies will continue to be at the
forefront of discussions between IT and
business professionals at financial
institutions
 Together, these technologies form the
foundation of a "Third Platform", which
will allow greater flexibility and agility
 While some of these technologies are
further down the maturity and adoption
curve than others, all will be important
components for driving value in 2013
and beyond
5

7. 7
Transformation is Happening
Focus on the Desired Outcomes
 The increase and sophistication of these disruptive
technologies is highlighting the need for business
model transformation in financial services
 Leading this change is ultimately the consumer who
is enabled by mobile technology to dictate when and
how they will interact with the marketplace and
business
This shift has profound implications for institutions in
how they interact with customers, how employees
deliver goods and services, and ultimately how IT
delivers services

8.  Regulatory pressures in global business demands financial firms re-think value of the
technologies, data management, and business process used to operate effectively,
compete, and manage risk.
 Convergence of intelligent devices, social business, pervasive broadband networking, and
analytics ushers in a new platform for building and servicing relationships between bankers,
customers, partners, and regulators
 “Analytics” is the NEWEST Core. Increasingly vital to harness information - make data
actionable, optimized, timely, keep risks at anticipated and acceptable levels, and uncover
opportunities ahead of the competition
 IT Reliability and Efficiency increases as risk factor. Age and complexity of systems,
lacking resources and skills for legacy systems , push to reduce costs and meet regulatory
requirements means additional outages, errors, and missteps.
Reality of ………..
Economic Instability and Financial Reform
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9. Business and IT Balancing Act
Risk and Innovation
9
Efficiency &
EffectivenessNew Services & Revenue
Opportunities
Channels, Analytics, &
Customer Engagement
Regulation & Compliance
Innovation versus
Operation

10. Global Financial Services
Information Technology Spend by Sector
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$USD Millions
Source: IDC Financial Insights Banking, Insurance, Capital Markets, Risk WW IT Spending Guide, Jan 2013

11. Overall 2013 IT Budget Outlook
Brighter Than Recent Past
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Increase Decrease Stay the Same
Avg. increase = 11.4%
Avg. decrease = 3.6%
n= 68
US and WE respondents
Source: IDC 2013 CIO Sentiment Survey, Fall 2012
Q. In 2013, do you expect your total IT budget to increase, decrease or remain the same as 2012?
Please indicate the percentage change in your IT budget from 2012 to 2013.
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12. Business and Performance Management
Models can exist in any one of these areas; they are different models in terms of data, methodology, delivery,
use and validation requirements. Diversity of models becomes a challenge, also making sure all models are
validated
Spatial Information
Analytics Tools
Content Analysis Tools
Business Intelligence Tools
Query, Reporting, and
Analysis Tools
Dashboards, production reporting,
OLAP, ad-hoc query
Advanced Analytics Tools
Data mining and statistics
Performance Management & Analytic Applications
Financial Performance
& Strategy Management
Budgeting, Planning, Consolidation,
Profitability, Performance
Management
CRM Analytic Applications
Sales -, Customer Service -,
Contact Center -, Marketing -, Web
Site Analytics
Credit Risk
Analytic Applications
Credit Analytics, Default Probability,
Loss Given Default
Investment Management
Analytic Applications
Portfolio Modeling,
Investment/Concentration Scenario
Modeling
Capital Optimization
Analytic Applications
Liquidity Risk, Asset Liability
Management
Operational Controls
Systems
Audit, GRC, SIEM
Data Warehouse
Event Discovery, Collection, Consolidation Layer
Common Infrastructure (compute, storage, networking, integration)
Fraud Management
AML, Payment Fraud, Insider

13. Financial Analysis, Risk Management, & (profitable)
Customer Acquisition Driving Risk Analytics Marketplace
N = 93
Source: IDC Global Technology and Industry Research Organization IT Survey, 2012
Q. What were the top 3 drivers for your organization to implement Business Intelligence/Analytics
solutions?
2.2
18.4
18.6
23.6
23.8
28.9
29.6
35.6
35.8
38.3
45.1
0 20 40 60
Other
Optimization of operations
Workforce optimization
Product or service innovation
Customer retention and service
Internal reporting and information
sharing
Regulatory compliance requirements
Cost control or reduction
New customer acquisition
Risk management
Financial reporting and analysis
(%)

14. Attention is Therefore Turning to Analytics
Most Impact To Business Units
0 5 10 15 20 25 30 35 40
Faster analysis (e.g. ability to
evaluate more scenarios)
Faster access to information
(i.e., faster query response times)
More accurate analysis
Ability to aggregate more data sources
Ability to aggregate structured
and unstructured data
Decrease in number of systems required
to answer business questions
Other
CRO “the number of
questions we’re being
asked on both the tactical
and analytic level has
gone through the roof”
• Which of the following changes or improvements would you expect to have the most positive impact on your
organization or business unit (both business and IT)? Multiple responses accepted.

15. Q. What recognized benefits has your organization achieved as a result of implementing a Business
Intelligence/Analytics solution?
2.2
0.6
18.0
26.9
22.1
23.1
27.4
35.3
33.6
34.1
32.8
0 20 40
Other
Improved Workforce optimization
Improved risk management
Improved efficiency of financial reporting
and analysis
Improved regulatory compliance process
Improved internal reporting and
information sharing
Improved optimization of operations
Reduced costs
Improved customer retention and service
Improved new customer acquisition
Improved product or service innovation
(%)
N = 93
Source: IDC Global Technology and Industry Research Organization IT Survey, 2012
For those able to measure benefits, value in improved risk
management and financial analysis trails value in customer
acquisition and product innovation.

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17. Scott Lundstrom
GVP & GM
IDC Financial Insights
slundstrom@idc.com
p: 508-935-4767
IDC Financial Insights
www.idc-fi.com
IDC Financial Insights Community:
www.idc-insights-community.com/financial
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