Advanced Analytics in Corporate Banking...
Let me highlight some of the aspects that are relevant for the Corporate Banking. We have lot of participants like Customer Relationships, Portfolio Managers, Product Managers, Regional Managers, Risk Managers, and Finance Managers, who are all interested in different aspects of the customer relationship. Everyone wants to understand their own piece of thing, wants different reports in an ever changing environment. But all are interested in digging through information that has single version of truth. Added to this complexity, in Corporate World, companies get acquired and sold quite frequently. This changes main information called customer hierarchy. Interest rate fluctuations, and currency conversions also keep changing.
On the stakeholders’ side, the Customer Relationship manager is interested in keeping his customers very happy, by selling more at lesser margins where possible. The Portfolio managers are interested in pushing their products but at higher margins. Product Managers are always interested in inventing new products; understand performance of the existing ones. Regional Managers are interested in seeing that their region is performing properly, across the portfolios, and how the funds are allocated to their regions, across portfolios and products. Risk Managers are interested in seeing that they sell to customers with high credit rating; constantly marking the collaterals to market; interested in understanding the overall exposure to individual customers; combining the credit ratings with collaterals and exposures. Finance Managers are interested in checking the existence of a positive spread on all the facilities extended to the customers; properly allocating the funds to facilities; properly calculating the cost of funds and apportioning the same; securitising the collaterals to minimise the risk. They will also be interested in understanding the services revenue coming from customers.
There is also a lot of dependency on external agencies in obtaining the customer’s credit ratings, and constantly changing hierarchies due to frequent buy-outs and sell-outs.
On the architectural front, all the stakeholders will be interested in analysis of daily transactions, periodical aggregates, facility to perform “What if” analysis, trend analysis, cross-sell & up-sell opportunities, provide 360 degree view of customers to understand the overall exposures, integrate all the facilities data to provide a unified picture etc.. etc..
To meet the interactive decision making capabilities, we need to provide Advanced Analytics in the form of a powerful OLAP, but at the same time, we need some data architecture to meet all the other requirements mentioned in the above paragraph. I want to call these are data areas / subject areas. The necessary subject areas are: latest transactions, master / reference data & hierarchies, periodical aggregates, historical transactions, historical aggregates and then finally the all powerful OLAP. Among the periodical aggregates, we need something called 360 degrees view of customers, covering all the facilities enjoyed and the collaterals provided by them.
Since this is finance area, we also need good mechanisms for reconciliation, adjustments and audit trail. We can think of Cognos TM1 for the powerful OLAP, or some BI appliances instead of an OLAP.
There is also a lot of dependency on external agencies in obtaining the customer’s credit ratings, and constantly changing hierarchies due to frequent buy-outs and sell-outs.
On the architectural front, all the stakeholders will be interested in analysis of daily transactions, periodical aggregates, facility to perform “What if” analysis, trend analysis, cross-sell & up-sell opportunities, provide 360 degree view of customers to understand the overall exposures, integrate all the facilities data to provide a unified picture etc.. etc..
To meet the interactive decision making capabilities, we need to provide Advanced Analytics in the form of a powerful OLAP, but at the same time, we need some data architecture to meet all the other requirements mentioned in the above paragraph. I want to call these are data areas / subject areas. The necessary subject areas are: latest transactions, master / reference data & hierarchies, periodical aggregates, historical transactions, historical aggregates and then finally the all powerful OLAP. Among the periodical aggregates, we need something called 360 degrees view of customers, covering all the facilities enjoyed and the collaterals provided by them.
Since this is finance area, we also need good mechanisms for reconciliation, adjustments and audit trail. We can think of Cognos TM1 for the powerful OLAP, or some BI appliances instead of an OLAP.
Comments
agree with the varying level of business needs, and how the dynamics impact the 360 degree customer view. There's a growing need for being more responsive and yet have the benefits of advanced analytical capabilities which obviously take their own course of time and latency before can be made available for decisioning. Gone are the days where organizations are interested in investing heavily in EDW and ODS models for their analytical and operational needs, and that's triggering the innovation in areas like In-memory solutions, as you rightly pointed out Cognos TM1 like solutions which are easy to use and give business the flexibility to react faster. Good analysis though in putting this together KN.
Posted by: Yogesh Bhatt | March 11, 2010 9:07 PM
Thanks for your comments, Yogesh. I am aiming to keep my blogs with more business relevance and to reflect what is happening in the market. Also trying to avoid more theoritical stuff, as BI PM area is considerably old now. It is mass adoption phase now.
Posted by: KN | March 13, 2010 8:11 AM
Hi KN,
A thought provoking post indeed. But, post crisis, there has been an ever increasing need for integrating risk management and management/legal reporting. Thus, I believe the necessary subject areas have to be expanded to include GRC, alongwith PM/BI, in the powerful OLAP landscape.
Regards,
Bharat Chadha
Posted by: Bharat Chadha | April 12, 2010 6:28 AM