Business Intelligence for Banking
Drive & control better bank branch operations performance through customer-segment and product level planning, analysis, and reporting.
For most banks, managing customers effectively at the branch level is critical to success. Drawing demand deposits from consumers and small businesses funds the crucial lending activities that drive bank profits. Consider the importance of attracting the right customers, providing them with the right products, and retaining them in profitable relationships. The branch-customer relationship, when taken collectively, touches every part of the retail bank. 1KEY Bank Solution offers best practices in branch planning, analysis, and reporting, including customer segment and product planning for revenues, balances, and assigned costs.
Benefits of using a BI Solution for Banking:
1) Reports and Analysis on clear and concise targets & variances for each branch at P&L level.
2) Reports and Analysis on clear and concise targets and variances for each branch by product group and customer segment.
3) Calculates revenues and loan losses based on account balances & account levels.
4) Reports on activity-based costing to calculate activity volumes from historic activity intensity rates driven by forecast account activity by product data and transaction data.
5) Reporting based on derived volume activity data to calculate assigned expenses using shared services rates
6) Lets managers plan drill down on staffing data at all levels in the branch
7) Provides the ability to enter monitor and report expenses analytics associated with the branch
Provides immediate data alerts on variance with planning decisions data
9) Allows reporting and analysis by branch, product, and household and many more dimensions
The Decision Support System created with 1KEY Framework will allow the branch manager an on-the-ground view, with real-time profitability feedback on decisions related to branch volume, accounts, rates, spreads, fee income, compensation, staffing, direct expenses, and assigned expenses. The components of profitability are interrelated and act as drivers. For example, an increase in the number of deposit accounts will create more cash inflow and also drive an increase in the transaction volumes and activities associated with deposit accounts thereby generating an increase in the associated expenses. By implementing this 1KEY Framework a bank will also benefit from forward-looking visibility into workforce decisions at both the branch level and the company level as a whole. The 1KEY Framework solutions described here in are brief are generic for any retail bank, yet can be configured to support the complex and diverse requirements of any financial institution.
1KEY allows banks to grow rapidly, perform quickly and results become more obtainable with new ways to cut their costs and increase profitability.
All banks to develop a robust regulatory risk engine to deliver timely alert and accurate economic capital allocation information
BASEL II: 1KEY provides solutions for addressing the credit risk domain.
Benefits of Risk Management Reporting:
Monitor, measure, and control risk across portfolios. The Credit Risk solution can be developed using 1KEY Framework which can addresses the full array of credit products as outlined by Basel II.
It measures and controls risks across individual credits and portfolios using one of the most powerful analytical reporting tools on the market –letting managers view risks in a highly focused and actionable way.
Quickly and precisely calculate, analyze, and report on risk exposures. The solution can be configured to automatically calculate risk and capital under both the Standardized and IRB approaches for Basel II.
Work with a highly configurable and flexible 1KEY frame work system with alerting capability. Report and assess flexibly and in accordance with Basel II. The robust reporting solution can be developed covering nonperforming loan analysis, location exposure, credit risk analysis, industry exposure, risk mitigation analysis, and so on. Reporting allows any required view at any level in the bank, making monitoring and analysis extremely configurable.
1KEY offers platform for risk-related data aggregation & information dissemination, to help banks address the new era of risk, performance, and customer information management that Basel II demands. These solutions present information in an intuitive, real-time format to speed decision-making and regulatory compliance, from ensuring minimal capital requirements are met or to identify looming risks.
Whether your bank is one of the largest providers of financial services nationwide, a super-regional serving numerous states, or an independent serving a particular region or area, its mission is the same: to create value for customers and shareholders and ensure proper risk management.
Most banks manage the process with hundreds or even thousands of spreadsheets which typically leads to inconsistent plans, multiple errors, and significantly longer cycle times
Common Technologies that Contribute To The Problem
In a bank, transactional core processing systems and general ledger applications are at the heart of the technology infrastructure. However, neither transactional nor G/L systems are well-suited for reporting analysis, alerts & planning variance, which explains the proliferation of spreadsheets in most banks. Spreadsheets, however, do not allow for integrated, enterprise-wide planning, reporting, and analysis. In fact, so much time can be spent trying to consolidate and reconcile spreadsheet-based plans, that they are outdated by the time they are ready for distribution. Branch-teller and platform systems were not designed primarily for planning, but rather for transactions, account display, and new account opening. ERP, Core Banking or general ledger solutions were not designed for MIS and create a Decision Support System.
To understand performance of different products or customer segments—or product/customer segment combinations — is typically difficult to impossible. For data collections and roll-up, typical solutions can be painfully cumbersome. When you need to do complex modeling—constructing what-if scenarios or slice and dice the data, for example—most ERP, Core Banking, & (especially) spreadsheet based systems, can grind to a halt.
The result is typically misaligned strategies, inconsistent priorities, ambiguous messages across branches, and—ultimately—lost opportunity to generate revenue or improve profitability
The 1KEY Framework Banking Soution
1KEY provides an effective BI solution for all variety of reporting analytics needed in banks or other financial services organizations. By integrating with 1KEY BI capabilities, users can easily publish reports and conduct analysis based on critical information such as product sales, interest income, branch staffing, advertising spend, and customer loyalty.
Using 1KEY, collect the right information from the right data sources as often as needed. Up-to-date intelligence is available on demand, allowing more time for analysis and better-informed, more effective decision-making.
The solution extends the MIS process beyond finance to the branch network—the people at the regional, district, or branch level who are accountable for performance.
Reports and dashboards allow branches to monitor and analyze key revenue, cost, and profitability measures by branch, product type, product, customer segment, and even household. Analyze which products are most profitable overall, and which are most profitable by factors such as age, gender, region, income, and more. Access a customer’s entire relationship with the institution, enhancing customer service and uncovering cross-sell opportunities.
With 1KEY Banking Solution, you can truly understand which customers, products and branches are contributing most to your success—and those that are not meeting expectation. With these capabilities, banks can use capital more efficiently, which boosts profitability and benefits shareholders.
Posted on February 2nd, 2009 by Ashwin Dedhia
Filed under: Business Intelligence, Emerging Trends, View Points & Perspective
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