The banking industry has been expanding in its capabilities owing to the digitization and the pace at which it is being embraced in recent years. Moreover, it is becoming competitive like never before, thereby empowering modern banking customers. For over a decade since the economic crisis hit the world, banks have been under constant pressure to abide by the stricter regulations and deal with the most critical problems like rising NPA levels.
Technologies and tools like Business Intelligence and Data Analytics have been invariably helping banks to reflect all required regulations and stay competitive while attending to the digital needs of today’s customers. BI solutions aid financial institutions in making ‘smarter’ decisions – both financially and operationally.
In the present times, Business Intelligence is a lot more than using fancy graphs and pie diagrams to represent data. Here’s a quick view of the top 5 reasons why modern banks are implementing BI solutions.
Source: IDC Financial Insights, 2010
Let us identify the trends in BI technology that are really transforming how banking is done.
1. Artificial intelligence
Artificial Intelligence (AI) along with Machine Learning (ML) are the new buzzwords in the banking industry and it is of no surprise why. The immense capabilities of AI and ML together have helped banks better manage risks, be compliant and save costs.
Statistics by Goldman Sachs suggest, “AI technology will deliver up to $43 billion in savings and revenue opportunities in the financial sector by 2025.” And so, every year, a large number of financial institutions are considering investing billions of dollars into this technology.
2. Internet of Things
In order to beat the competition and to serve their customers with just-the-right financial products/services, financial institutions are relying heavily on the Internet of Things (IoT). This technology is known to drive higher BI capabilities through smart ways like contactless payment methods, payment through wearables, and more.
Furthermore, IoT brings capabilities of analysing data gathered through all such devices and thereby assisting the Business Intelligence people to define strategies for generating more revenue. E.g. IoT can help banks understand customers in a particular vicinity to push need-specific services and promotions, discounts, etc., and thus ensure greater profits.
3. Fraud Detection
The banking industry is known to be the hub of storing the personal information of customers considering norms like KYC regulations etc. With this, comes the risk of fraud and other attacks on finances. Business Intelligence solutions come with great fraud detection abilities in banking. BI platform enables cyber security, threat detection, and fraud prevention through its advanced functionality.
There are plenty of other areas where the power of BI and analytics can be realised. Want to know more about how Business Intelligence solutions can help banks become more profitable? Talk to our consultants today!