Bank on the benefits of financial business intelligence

For years, finance professionals have turned to spreadsheets to help organize and analyze data and find answers to pressing business questions. However, the manual process of creating spreadsheets and engineering reports takes time — a lot of it. Financial business intelligence, accompanied by powerful visualization tools, can help financial organizations break free from siloed spreadsheets to perform faster, more in-depth analysis for data-informed decision-making.

What is financial business intelligence?

Financial business intelligence describes the process of collecting, storing, and analyzing data from a financial organization — like a bank or an insurance company — to answer specific business questions or forecast financial scenarios. Because the finance sector centers around transactions, they generate more data than almost any other industry.

This big data creates both opportunities and challenges for financial organizations, and those that learn to harness the power of business intelligence can reap significant benefits.

The benefits of business intelligence in the banking sector

The finance and banking sector is highly competitive and experiences constant risks, shifts, and changes. Equipping employees with business intelligence software empowers each department to uncover insights that mitigate risk, generate growth, and create a competitive advantage. Some benefits that business intelligence brings to the finance and banking sectors include:

  • Increasing operational efficiency
  • Improving products and services to meet customer needs
  • Boosting customer retention
  • Reducing financial risk

Continue reading to see how financial organizations can accomplish these goals.

Increase operational efficiency

Remember those spreadsheets? Each one requires manual labor to extract the data from multiple platforms and put all the pieces together for deeper analysis. A business intelligence platform can help automate this process, providing comprehensive business financial metrics in near-real time and significantly shortening the delay between data collection and data decision-making. The insights uncovered through quicker data analysis can lead to potential savings and even more operational efficiency gains.

For example, treasury and cash flow management can help gauge the health of your business, while visualization tools can help you drill down into the cash flow details. With analysis like regression analysis, you can even predict cash flow to ensure you have the money when you need it. Finance analytics dashboards can help with a variety of functions, from monitoring travel expenses to investigating channel stuffing and comparing budgets to actuals.

Improve products and services

With the help of business intelligence platforms, banking and financial organizations can examine their revenue streams to assess the profitability of products and services. After they identify which products are performing well and which are not, they can make informed business decisions on everything from marketing to pricing.

For example, organizations can use revenue and pricing analytics to develop a deeper understanding of business revenue to forecast spending, performance or pricing trends, or predict variance and product margins. Additionally, product profitability analysis allows organizations to look at the products and services individually instead of the overall business, helping to discover specific insights that can contribute to profit and growth.

Boost customer retention

For products or services that are not performing well, financial institutions can analyze customer data to identify customer sentiment and behavior. With this information, organizations can make key improvements or develop entirely new products to meet customers’ needs and promote loyalty. Even more, business analytics tools can identify an organization’s most profitable customers so you can market relevant products and make efforts to retain and grow their business year after year. With the right customer data, you can create personalized experiences and give your organization a competitive edge.

For example, organizations can use customer analytics to explore the vast amount of data customers create each day, building customer segments and uncovering insights. An organization might discover that thousands of customers abandon an online form at the same point — but those who power past that point are more likely to be loyal customers. The business could use this insight to improve the user experience, personalize the form, or find ways to account for this pain point. Social listening, monitoring trends for investment opportunities, and tailoring marketing activities based on consumer insights are all ways to use business intelligence to boost customer retention.

Reduce risk

Finally, many banks and financial organizations use business intelligence tools to reduce risk. Financial business intelligence gives organizations the ability to accurately estimate the risk of customer loans based on a variety of data points, including earning capacity, financial assets, economic climate, and other factors. Business intelligence tools can even track internal employee behavior, so the organization can increase compliance and help prevent insider trading. By using and acting on available data, financial organizations can proactively mitigate risks.

For example, finance analysts can use audit, risk, and compliance analytics to explore all business data to both flag suspicious activity and alert stakeholders before it’s too late. Through transaction analytics and classification models, organizations can look at transaction trends over a long period and quickly detect fraudulent activity.

The challenges of business intelligence in the banking sector

Taking advantage of financial data provides significant benefits, but implementing business intelligence throughout your organization also presents challenges. A few major challenges to account for include:

  • Security. When dealing with customer’s financial data, security is a primary concern. Organizations have to make sure all of their tools and processes are secure and adhere to compliance regulations.
  • Scaling. Getting crucial data and insights into the hands of those who use it most can be a considerable challenge. Organizations have to scale business intelligence across departments and eliminate silos to create a competitive advantage through data.
  • Systems. Finding a business intelligence tool that can work seamlessly with current data platforms can be difficult, and some organizations have legacy systems that have trouble keeping up with the demands of big data. Organizations have to identify a solution that can work with or transform their existing data ecosystem and meet their needs.

Examples of business intelligence in action for banks and financial institutions

What does it look like to implement financial business intelligence? See how financial institutions like JPMorgan Chase and Charles Schwab turned data into trusted, actionable insights.

JPMorgan Chase uses Tableau to mitigate risk

Company: JPMorgan Chase
Use case: As industry regulations tightened after the 2012 economic crisis, the relationship between IT and business at JPMorgan Chase (JPMC) became strained. The business needed transparency and trust in the business’s data. IT needed to ensure compliance with government regulations.

Previously, risk analysis was completed in bulk with Excel, Access, and other tools, making it difficult to prove the accuracy of data sources and adhere to regulations. To solve these problems, IT trained the business team on Tableau, giving them access to data models and fostering a collaborative relationship. Now, hundreds of team members can use Tableau Desktop or Tableau Online to create dashboards with controlled, compliant data and share results with other teams and executives through the Tableau Server.

Charles Schwab uses Tableau to streamline reporting

Company: Charles Schwab
Use case: Before Charles Schwab scaled Tableau access to over 16,000 of its employees, branch management dealt with fragmented reporting across several platforms, leading to inefficiencies and inconsistencies in data.

Now, leadership can quickly visualize performance across the whole network and even drill down to branch-level performance metrics to identify opportunities. Plus, branch managers can now track their team’s progress against key performance indicators — such as benchmarking net new assets to customer experience. Over 140 branch managers can dig deeper into the data to inform everything from customer retention to marketing initiatives.

Get started with financial business intelligence

Start turning your organization’s financial data into actionable insights. Tableau makes business intelligence in finance departments and organizations more visible and accessible so teams can make a bigger impact with their time and resources.

Read more and explore Tableau’s finance analytics dashboards.