Increased competition, market volatility and regulatory pressure have revolutionised the landscape of the financial services sector. Now, more than ever, it is crucial to leverage data analytics to improve work processes and maintain a healthy business.
Analytics help staff at all levels make better decisions — key performance indicators provide visual transparency for trends and anomalies so opportunities may be harnessed and emerging risks mitigated.
A report released by Aberdeen Group showed financial services firms that use analytics see nearly two-and-a-half times more improvement in customer cross-sell and up-sell rates compared with firms that don’t.
This explains why IT research company Gartner found analytics to be the highest technology investment priority for industry executives over the past two years.
The pressure on the industry has manifested itself in a drive for clarity for the whole business picture – and then to use this knowledge as the basis of a data-driven enterprise.
Sales and profitability
As customer and prospect lists are generated in their thousands, sales staff are often overwhelmed with determining which calls to make and which product or service to pitch.
By combining customer data (holdings, profitability, CRM data, risk and demographics), sales staff can explore their client data-set and identify opportunities to have insightful conversations and deepen relationships.
Advisers are encouraged to question, explore and interact with these living applications, teasing out the clients who represent the biggest opportunity on any given day.
By using the right intelligence, it is possible to bring together insights on product holdings, client situations, research and market movements — revealing an actionable call list.
Advisers can then be there when their clients need them most with timely advice and suitable offerings.
Credit portfolio management
To get an accurate, complete and timely view of the performance of your loan and leasing portfolio, a solution that consolidates disparate data-sets — yield, cost of funds, delinquencies, charge-offs and allocated capital — is necessary.
The right solution can provide a complete picture that generates actionable insights in every department.
Critically, the changes in composition in the credit book may be examined. These changes give users unprecedented capacity to quickly search for exposure to an industry of a single name in distress, taking immediate action to resolve any findings.
They may also produce changes within credit decisioning to rebalance portfolios.
Branch and distribution performance
Success breeds success, which is why it’s so important for financial services firms to explore why certain branches and agents do well, and use the learnings to foster modeling and training throughout the network.
With the right analytics platform in place, you can examine referrals by teller staff, gauge marketing effectiveness, and use client data to help staff educate their clients and offer suitable products.
Compliance and conduct assurance
Regulators are homing in on poor conduct across the industry, leveling hefty fines at firms and holding individuals accountable. When conducting periodic audits, lines of business are often exposed to new threats and findings, with costly remediation work stealing focus from serving clients.
To mitigate issues of this nature, it will be useful for lines of business to receive immediate alerts and real-time KPIs and scorecards then to incorporate new threats into the analytics so emerging issues can be dealt with promptly at the front-line.
Customer experience management
It is far cheaper to retain quality customers than acquire new customers. As customer interactions migrate toward digital channels, capturing and analysing these interactions becomes vital to both customer experience and conversion rates.
Linking feedback from customers with recent episodes (for example a credit limit increase request), product, and client profitability provides useful insights.
The customer experience affects Net Promoter Scores, and it is therefore important to invest in analytics that enhance customer experience management.
With the financial services industry grappling with business-critical issues, such as rapid changes in regulatory requirements, expanding data-sets, and client satisfaction, the importance of accurate real-time data, is top of agenda for financial firms.
It’s critical for the industry to explore various kinds of information with analytics, leading to insight-driven decisions.
Stuart Ward is the director of market development for APAC financial services at Qlik.
