In the past 2 decades, the amount of data which has been generated through various devices like mobiles, computers, IoT objects is massive. In fact, majority of the data in the world was generated in the past 3-4 years at a rate of 2.5 quintillion bytes of data per day, and which is only accelerating with the growth of the IoT. With so much data in place, businesses have the opportunity to gain deeper insight into customer behavior. Major Banks and Financial Institutions are not left behind and are leveraging Business Intelligence (BI) for their benefit and be competitive.

Business Intelligence in Banking is the term used to describe the adoption of applications, infrastructure and tools that enhance the banking operations by identifying patterns, analyzing connections, addressing and resolving issues in real-time etc. In order to stay ahead of the competition, adopting BI solutions is very much essential as they enable them with capabilities to detect frauds, mitigate risks, and reduce costs and more.

According to the Fortune Business Insights, the overall Business intelligence market is expected to grow at a CAGR of 8.7% and is forecasted to reach USD 43 billion by 2028. According to a study from Bain & Company, early adopters of Business Intelligence and big data analytics are

• 5x times as likely to make decisions faster than their peers
• 3x times as likely to execute their plans as intended
• Twice as likely to be in the top 25% of financial performance for their industry

According to Gartner, ‘Improving revenues using BI is now the most popular objective enterprises are pursuing in 2019’ and Business intelligence (BI) Tools are the main go-to resource for banks to harness the power of big data and analytics and make smarter, data-driven decisions. Some of the most used Business Intelligence Tools of 2020 are Sisense, Microsoft Power BI, Tableau, SAP Business Intelligence, QlikView, Oracle BI, etc.

Benefits of Business Intelligence Tools

• Reduce Risks

BI tools can mitigate risks by putting data into action. By tracking customer behavior, we can quickly detect fraudulent activities. The available data along with information related to the current economic conditions can also be used to analyze credit portfolios and spot possible frauds.

• Drive Profitability

Retaining existing customers is cheaper, profitable and sustainable business model which can be achieved using business intelligence tools. Maintaining up-to-date information of existing customers helps in suggesting most relevant products and services according to their needs and preferences.

• Gain a Competitive Advantage

Personalization of the product/service is a very important aspect in any industry, more so in banking and finance sectors. Using business intelligence tools and the existing data banks can predict customer behavior, and customize their offerings according to each customer’s needs there by enhancing customer experiences.

• Optimize Marketing Efforts

Customer Relationship Management (CRM) data can provide insight into the success of the marketing campaigns. Tracking email performance, advertising spend, and overall campaign success helps in understanding areas where the message is resonating with customers and areas to improve.

• Improve Internal Operations

Business Intelligence tools helps in resource allocation, operational procedures, and evaluating the performance of the employees. BI Tools along with the data can tell us areas where we can cut costs, improve the customer experience, and maximize operational efficiencies.

Future of BI in banking:

Business intelligence offers banks the adaptability required to compete in both business-as-usual conditions and in more turbulent economic times. BI processes and software give banks deeper understanding of their business, their customers, and their future. Beyond 2020 the use of AI & ML being used in banking will increase resulting in generation of heaps of data. This generated data will be integrated into a single platform to generate powerful insights in real-time for a quick and strategic decision-making. Whether it’s growing the customer base and revenues, fighting frauds, business intelligence is going to change the face of banking.

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