Banking business intelligence should deliver more than merely reporting results. With the right business intelligence applications, users can really get to grips with their data giving them more accurate insight into their business.
Results
The solid base for business intelligence starts with calculating results and answering basic questions:
- What is our return on assets this month?
- What is our efficiency ratio this month?
Comparisons
By making comparisons we can put results into context based on previous performance to ask questions such as:
- How does that compare to the budget?
- How does that compare with last month?
- How does that compare to the same month last year?
Trends
The ability to look at all aspects of results visually over a period of time enables us to identify good and bad trends and intervene where necessary. Trends enable us to answer simple but critical questions such as:
- How is this trending over a 12-month period?
- Is this result an ongoing trend or just a blip?
Relationships
Having the ability to calculate and report results, make comparisons and identify trends gives a solid foundation for supporting decision making and taking action.
However, when you do take action you need to know how those decisions affect other elements of the business and therefore you need to be able to visualise relationships between one ratio and another to answer questions such as:
- What effect has our recent loan growth had on our return on assets?
- What effect has the cost of opening new branches had on our efficiency ratio?
Understanding Why
The right business intelligence applications should allow you to truly identify what's affecting your results, enabling you to make the right decisions and incremental improvements.
This is where it becomes paramount to be able to drill down into any element of the business and scrutinise that element until you understand why.
We produced a series of eBooks on understanding risk and finance. You can download the first in the series below:
