FINANCIAL SERVICE INDUSTRY generally includes banking, security exchange and international finance like currency exchange and foreign investment.FINANCIAL SERVICE INDUSTRY generally includes banking, security exchange and international finance like currency exchange and foreign investment.
FINANCIAL SERVICE INDUSTRY generally includes banking, security exchange and international finance like currency exchange and foreign investment. The chief banking sector is the major field with savings, loans, commercial banks, credit unions and banks for mortgage. In all these business, the primary focusing point is management of finance. The overall financial industry is facing challenges with merger and accusation of companies in this competitive market. So here, Business Intelligence (BI) becomes really important reporting, regulatory compliance and most importantly protection of sensitive customer information.
Business Intelligence in finance sector really helps in creating new financial products and understanding client needs by analyzing data and solving data centric business problems. BI includes services like information management of real-time data flows, data warehousing, and data integration in identifying profitable customer, analyzing customer’s changing behaviour, detecting fraud, interpreting transaction pattern and efficient customer service with quick reporting.
Gathering Information: Though financial service deals with tracking and managing finance but it becomes essential to maintain reports of each transaction, customer accounts and all other financial statements. These kinds of jobs require management of all real-time operational information. For example, when a customer sends application his/her application the process of application approval includes verification, underwriting and preparing accounts. So to handle all customer problems, it is important to collect all information for them. Here, BI tools can assist in maintaining customer accounts and saving all information of the account by saving a lot time. Those information can be later used for financial and customer analysis.
Sales and Marketing: Each financial service company has a lot of product and service to offer through different marketing pathways. Customers always don’t want each product or service but the company wants to promote all and so tries cross selling by selling additional products. This is primarily done through telemarketing or sending mails with customer’s account statements.
Again categorizing a particular type of customers in a single group demands a variety of data essentially demographic with customer’s age, sex, family, financial history etc. This helps in targeting an entire group with suitable offer. All these require data and information on customer in order to make an effective financial decision after analysis. Here, the business intelligent plays a vital role in gathering and evaluating information.
Handling Risk: In financial service, risk can be categorized in two forms: one is the general default of payments on loans and the risk related to the ratings of agencies. In case of the former one, default of loans such as mortgage interrupt cash flow, which is the primary source for the stability of the institutions. BI tools are used to manage risks by better information management. This primarily assists in recognizing a pattern of loan defaulters so that these kinds of problem can be avoided while approving application. The second area of risk management is the evaluation of company by rating agency as the performance of company depends on its history of stability. A bad rating can affect cost of the capital that is the prime factor in company’s success. Cost of the capital is evaluated by calculating the difference between cost and gross revenues. A lower cost of capital can be an advantage over competitors with lower ratings. Here, agencies ask for financial reports and information data for determining your position in the market and hence Business Intelligence technology is inevitable for the growth of financial service industry.