The dawn of the digital age has catalysed an explosion in data creation. In just the past two years, more information has been produced than has ever existed up until that point. Increasingly, financial institutions are being challenged to navigate the vast information spectrum and find value within its data-rich environment. The key to their success: analytics.
Statistical data analysis provides banks and credit unions with the information they need to enhance their performance and deliver insight and understanding across all realms of the business domain.
We've made a list of the top five reasons why analytics have become vital for financial institutions and why they will continue to spur banking growth into the future.
1) Increase Revenue
Analytics, combined with business intelligence, provides CFOs with the ability to drive product and channel development, as well as improving economic forecasting, business improvements, and financial modelling.
With improved insight into customer habits and activities, financial institutions can drive lead generation through marketing, creating more targeted opportunities for customer conversion and ultimately improving revenue streams.
2) Reduce Risk
One of the most beneficial uses of analytics is within the area of fraud and risk management. With increased awareness of purchasing habits, transaction patterns, and social media interactions, financial institutions are better equipped to tackle cases of fraud and prevent potential losses.
Data and analytics can also help CFOs leverage data for guidance when making traditional management decisions. In situations such as pricing or purchasing, statistical analysis can help banks and credit unions better predict transaction outcomes, improving
3) Derive Insight
The value of a customer's behavioural preferences is becoming increasingly acknowledged. Channel selection and product-use are becoming more and more fractured, but insight into customer habits can increase the effectiveness and efficiency of targeted marketing.
Statistical analysis enables banks and credit unions to derive greater value from the information available and draw useful conclusions. This provides marketing managers with the necessary intelligence needed to replace traditional product-led adverts with customer-led campaigns.
4) Improve Customer Experience
With increased insight into the financial landscape, banks and credit unions are better able to make unique, timely, and relevant offers to customers based on available statistical data.
This form of analysis enables financial institutions to deliver personalised, contextual interactions that assist customers with their daily financial needs and improve their overall consumer experience.
5) Exploit Opportunities
As the financial landscape becomes increasingly fast-moving and complex, banks and credit unions must be able to react quickly to opportunities or face being left behind.
Driven by business intelligence, statistical data analysis provides financial institutions with a comprehensive view of consumer engagement, channel use, and customer satisfaction. With this information, CFOs can look into which products and services consumers are using, enabling them to act more rapidly in response to any market change.
The Power of Data and Analytics
Data and analytics provide exceptional opportunities for banks. Every major financial decision can be supported by information to achieve a more favourable outcome.
To extract the greatest value from internal and external data sources – guiding product development, customer communication, innovation and growth – data analysis is a powerful differentiator. Financial institutions able to seize the power of business intelligence and analytics are far more capable of effectively understanding the financial landscape, enabling them to better connect with consumers, react to opportunities, and generate growth.
In today's digital age, data is abundant. It's not so much the information itself that's most important, but how that data is analysed that is the key to financial success. Banks and credit unions able to effectively analyse data sources and create value will find themselves well placed to thrive within the current market, while those unable to piece together a coherent financial picture will be left behind.
To discover for yourself how business intelligence and analytics can provide value for your financial institution, request a free demo of BankBI here.