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Business intelligence in financial services: Special report

In this report on business intelligence in financial services, learn about BI challenges in financial services and how banks are implementing and managing BI.

In this vertical industry business intelligence (BI) special report, we've compiled popular articles, FAQs and...

case studies on the managing and maintaining of BI software and other data management initiatives in three major vertical industries — healthcare, finance and retail.

In this section of our vertical BI special report, you'll find tips and best practices advice for initiatives and software implementation in the financial industry. You'll also find case studies about how banks and other financial institutions are upgrading their infrastructure to get in line with the 21st century.


More vertical BI reports:

Business intelligence in healthcare: Special report
Business intelligence in financial services: Special report
Business intelligence in retail: Special report


Financial BI news and case studies

It's important for any company to be able to use its data to create sound budgets, complete accurate reports and make better decisions. Nowhere is that more paramount than in the financial services industry, which has fallen under heavy scrutiny over the past couple of years. This section shows what banks and other financial groups are doing to improve their BI and data management platforms and infrastructure.

BI and analytical tools for the financial market

According to BI expert William McKnight, there is not necessarily one BI tool that's best suited for the financial industry since "tools are not industry specific." Instead, the most important factors financial companies need to consider for a successful application are data design, quality of the data and data interpretation.

Instead, the most important factors financial companies need to consider for a successful application are data design, quality of the data and data interpretation.

According to McKnight, multidimensional OLAP is a data architecture that works well with financial data. Oracle/Hyperion Essbase and IBM Cognos are examples of such architecture. For financial groups looking to bolster intellectual property consideration around financial should look into applications instead of tools, McKnight said. Oracle/Hyperion Financial Management is a good example of a financial application.

Financial industry keeping up with the times

In the 1970s, Pershing LLC was on the cutting-edge of IT when it started providing clients with electronic reports instead of paper-based consumer data reports. Nearly 30 years later, however, it was still using the same dry, row-based reports and its customer data-related BI capabilities were stuck in a decade long gone by — i.e., no ad hoc querying or interactive dashboards.

It was time for an upgrade, according to Tony Berman, vice president of information delivery and eAnalytics at Pershing.

"We were always getting requests from our customers for more [data analysis capabilities]," he said. "They were looking for more flexible ways to look at their customers and their behavior." So in 2002, Pershing sent out an RFP for a BI product that could integrate with its financial trading platform to allow clients to manipulate customer data and conduct advanced analysis. When the company finished evaluating different vendors it settled with WebFOCUS BI.

The implementation provided Pershing's clients with access to customers' account data as structured, ad hoc reports with tabular results, interactive dashboards and scorecards. It also allowed clients to do all their analysis from a single portal without the need of help from Pershing's staff or IT.

According to Pershing, the most popular report types have been prospective analysis, customer location analysis and filtering through customer data by age or account type and then putting that info into context by comparing the results with industry-wide and individual market segments.

Conquering budget woes with corporate performance management (CPM) software

One would think that a financial institution would have a sophisticated, or at least fairly modern, system in place to handle most financial functions. That wasn't the case, however, when Jeff Hudson, VP of financial systems, first joined New Alliance Bank (NAB) in late 2005.

The company was doing most of the basic financial tasks — including budgeting — via Microsoft Excel, plus running profitability numbers on a "stripped-down" edition of Hyperion's Essbase and printing out customer account histories with Microfiche. Because of all this, budgets weren't done at the end of the year because it was such a big process and inaccurate, redundant and incomplete data was commonplace.

The impact was almost immediate as the bank was able to cut its budget time in half, from four months to two...

To start, Hudson knew NAB needed a set of BI and financial reporting tools that users would be comfortable using but also flexible enough to meet the bank's evolving data demands. NAB went through a rigorous evaluating phase, looking at about 30 online analytical processing (OLAP) vendors before deciding on Applix' TM1 reporting and analysis tool.

The impact was almost immediate as the bank was able to cut its budget time in half, from four months to two, because of TM1's ability to run multiple scenarios at the same time and the ability to add extra scenarios on the fly, when needed. And, because of an easy interface, NAB's CFO conducts all his ad hoc queries analysis in TM1. One of the downsides, NAB noted, is that the system runs slower towards the end of the budget season as employees try to complete their numbers by deadline.


More on Vertical BI:


More vertical BI reports:

Business intelligence in healthcare: Special report
Business intelligence in financial services: Special report
Business intelligence in retail: Special report

This was last published in September 2009

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