Looking over the challenges that face the banking industry—from media scrutiny to customer alienation to increasing regulation—you might think this is not the best time for banks to focus on expanding their business intelligence capabilities. But according to the Aberdeen Group’s brand-new report, you would be wrong.
Business Intelligence in Banking: Analytical Customer Focus Drives Performance offers some key insights about the value of BI for an industry in transition. First revelation, based on a survey of respondents from 80 banking organizations:
- The top two pressures driving BI investment—as ranked by all respondents–were in a dead heat: “Customer relationships are underdeveloped” (51%) and “Need to improve the timeliness and accuracy of business decisions” (49%). While those are fairly familiar objectives for retail and other consumer-facing businesses, they don’t seem to have been major motivators for banks in recent years.
The study divided responding organizations into two groups, “Top Performers” (25%) and “All Others” (75%), based on the amount of year-over-year increase reported in three areas: customer value, customer satisfaction, and opportunities for cross-selling. Interesting to note–average Y/Y increase among the Top Performers was around 15%, while average increase among All Others was 1% or less.
My pick for the most intriguing comparisons:
- Top Performers were only moderately (15-25%) more likely than All Others to have data integration tools, dashboards, and operational BI. But . . .
- All Others were more than twice as likely than Top Performers to use BI only internally.
In terms of external BI use, both groups reported collaboration with regulators about equally (44% and 42% respectively), but Top Performers connected with other stakeholder groups at a much higher level than All Others. For example—32% of Top Performers reported collaboration with investors (compared with just 11% of All Others), and the ratio was 42% to 21% when it came to partners.
The concise, idea-rich Aberdeen report is well worth a download. And access is free for a limited time.
Spotfire Blogging Team
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