The banking sector is characterized by multiple customer segments, vast product arrays, regulatory changes and increasing consolidation. The intensifying competition not just from other banks but also from online payment firms is putting pressure on banking firms to improve profitability and increase their revenue per customer.
With increasing customer turnover rates, banks are in a need to better understand customer behaviour in order to make targeted marketing efforts. Understanding which customer segments and product offerings are most profitable and which segments are underperforming and being able to analyze the underlying reasons for the existent trends is the secret to marketing success for any organization.
BI capabilities can help banks analyze customer profitability and attrition rates with respect to certain demographic attributes and can provide users with multiple analyses at a single view. For eg users can see profitability by business segment, geography, marketing channel etc at one go, thereby helping them in making well-rounded judgements.
Loan defaults and delinquency is one of the high risk areas for any bank. Understanding and managing this risk is important for overall profitability. BI modules are present that can help banks in analyzing their loans. You can analyze defaults and delinquency trends as per business segments and the severity of these trends, so that banks can make informed decisions.
Increasing consolidation in banking sector is opening up avenues for banks to seek efficiencies in their operations. Banks must also align their internal and external process to the corporate strategy of the firm in order to increase their profitability. BI helps banks take in data from varied sources and integrate and cross-reference it in such a way that is becomes easier for banks to analyse their processes. Banks can use BI in several of their key areas such as Portfolio Analysis, Physical Asset Management, Wealth Management as well as in internal functions such as headcount, staffing and Hiring, employee performance management etc.