IMPROVED OPERATIONAL EFFICIENCIES
Banks cannot afford to just add employees to grow revenues. They must contunually seek ways to make their exising workforce more efficient. BI solutions for banks can be used to analyze operational processes o help reduce ongoing cost and/ or maximize existing resources and expertise. For example, by analyzing the performance of your branch personal that interact with your customer base, banks can find out ways to improve and enhance the customer experience at the point-of-contact.
IMPROVED PRODUCTS AND SERVICES
Business Intelligence tools for banks are being used to tract customer, pridyct and branch profitability. The bank can modify pricing or business processes to improve the profitability and tract improvement. BI tools are being used for predictive analytics as well to determine which customers might be interested in purchasing which product when and by what method (in-person, over the web, direct mail). With all this new data, banks can create new and improved products and services to better meet customer needs and improve their competitiveness in the marketplace.
Amed with profitability and demographic information on their customer households, banks know what a good prospect looks like and will be better able to market to them. Banks can also create more effective cross-sell and up-sell campaigns by knowing who of their customers to make a marketing pitch to. The payoff is huge as research show that it is five times cheaper to sell to existing customers that it is to obtain a new one.
IMPROVED CUSTOMER RETENTION
Armed with customer profitability information, banks can come up with more cost effective ways of interacting with money losing customers. For example, a customer making cash withdrawals from the bank to pay bills might be persuaded to use online banking to pay bills if educated on the benefits. Online banking has been shown to be a cheaper service that teller transactions involving a human. Being able to track customer habits, preferences and behaviours will enable banks to customize their products and services in ways that meet needs, solve problems and promote customer retention and royalty.
DEVELOPING NEW INVESTMENT STRATEGIES
BI tools can also monitor trends outside the bank for alternative investment strategies. Analyzing data that comes from social media, investors can gain specific insight on sentiment and develop trading signals. Whole new categories of investing are emerging from utilizing analytics and business intelligence applications.
As the banking universe becomes mor complicaed and integrated, the risk factors become much more diverse as well. Fraud is probably the number one risk that banks need to mitigate. Looking for suspicious behavior in checking account and credit card usage is key. Tracking employee behavior for suspicious trades, withdrawals, expenses, and lending will reduce the risk of lawsuits and embezzlement. Scanning past dues and repayment activities may be able to spot general trends such as an economic slowdown.