Integrated Data Analytics: A Financial Business Case

This article will delve into the business challenges and processes of strategic importance in an executive decision plan for the financial services sector and will discuss the data analytics related to those processes in an integrated fashion to ensure better decisioning.

A challenging business environment, more red tape around risk and compliance, the growing importance of strong governance structure, more demanding customers and maintaining efficiency and productivity are some top-of-mind headaches for executives in the financial services industry. For better decision-making, data analysis is a prerequisite. Data analytics should have historic views, but also should include predictive analytics. In this article, I attempt to clarify the process analytics that are of extreme importance to executives, which should be presented in an integrated manner.

In a globally distributed business scenario, financial services executives currently have internally and externally challenges; both are of equal importance to the overall solidity of the organization. Internally, the governance, risk and compliance (GRC) issue is of prime importance to the business and its industry reputation. Externally, customer-focused processes will be the number one priority area for CXOs’ observations. The crux of the analysis should be to understand why these processes should be observed and analyzed in an integrated manner, rather than taking a siloed approach. I will now briefly look at those processes.

Customer Service

Globalization, fierce competition and technological innovation are some of the factors that have made customer servicing of prime importance. Today’s customer is more informed, risk savvy, more demanding and expects better return with top-class service. To satisfy the new brigade of clients, service providers should not only have good existing relations, but they also should have amenities, insight, predictability and infrastructure to improve them. There should be data analysis in place for customer expectations, existing relations, history, market offerings, risk and, the biggest one, customer relationship management.

Governance, Risk and Compliance (GRC)

SOX demands more executive oversight of internal controls, risk assessment and management and regulatory compliance. This has given rise to top management prioritizing these processes to be streamlined. GRC analytics are strategic in nature, and key long-term decisions will always be guided by the GRC health report of the organization. This is of paramount significance because financial services will always be under regulatory observation to gauge their behavior internally and externally in market. The enterprise GRC matters more than a segregated view.

Product/Service Innovation

Innovation is key in the financial services business, especially when organizational reach spreads to geographies. Globalization and surges in emerging markets have produced more demanding customers who are no longer happy with run-of-the-mill offerings and search for service providers who can provide more customized products. In this highly complex environment, it is important for organizations to keep tabs on existing product/service status, customer expectations and churn. A detailed and data intensive analysis of market offerings is critical for organizational growth and executive decision-making.

Technology Pervasiveness and Outcome

Technology is the differentiator in every business decision in the financial services industry. Greater process automation has assisted in reaching a larger customer base and also improving the service availability. This large-scale dependency on technology in each process has resulted in massive IT budget allocation and subsequent challenges to administer the IT governance. The turning point is to analyze the return on these IT investments in business lines, products/services, compliance/risk, data management, etc. Executive knowledge of these parameters is necessary, considering the burgeoning IT investment and in defining the future technology roadmap.

If you closely observe the above parameters, each is addressing an ingredient of strategic importance, greater shareholder value creation and enhanced investor confidence. That’s where the decision-maker would be keen to have parameters analyzed cohesively in an integrated manner. Subsequent sections will delve further into their interdependencies during strategic decision-making and the need for an “integrated data analytics” structure for them.

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