The influence of business intelligence on consumer and commercial lending
The financial industry has become increasingly dependent on IT tools and techniques. From marketing, prospect identification and customer acquisition to product lifecycle management and customer management, virtually every single process today is driven by information technology. Of late, banks have begun combining IT tools and techniques with analytics to improve efficiencies and drive better outcomes. The end goal is entirely customer-focused - improve customer trust, loyalty and delight.
In the area of credit, it is now the norm for banks to possess enormous quantities of data that need to be stored. The size of this accumulated data continues to grow exponentially and, if leveraged properly, can help provide meaningful business direction and enable better decision making. However, due to the sensitive nature of credit data, it is mandatory to comply with regulatory requirements to avoid potential data ion protect breaches or an adverse impact on data security. Therefore, financial institutions have started segregating data based on confidentiality and accessibility. As a result, the questions that now need to answered are based on confidentiality levels of the data and power of access. Once the data is secure, it is then time to think about utilizing it's power and leveraging the underlying information within the data. Often, historical data helps provide valuable insights. Historical data talks about frequency, consistency, repeat behavior, trend, most or least, highest or lowest, etc. When subjected to extract, transform, load (ETL), data begins to take on a tangible "shape" and can provide very accurate direction, beside helping answer several questions like:
- What's the current trend?
- Where should the business focus be?
- What parts of the business fare well and what parts do not?
- When is the next change needed?
- How can we satisfy the customer's requirements?
Identifying business needs
The most crucial aspect is to leverage BI to benefit your business as well as your customer. The first major step in this direction is to convert raw data into actionable information. With the help of BI frameworks, you can identify quality data, extract the right information from it and create reports that contain usable information for the business. This information can help decision makers make the right decision at the right time.
Re-engineering and consolidating business processes
The credit process includes several business modules like marketing & sales, loan origination, underwriting, fulfillment and closing & monitoring. Each module consists of several business process entities, actors and actions. For ease of management and maintenance, each credit module is considered an individual application. This has made each application move in different directions over a period of time. Some applications are coded in Java while others use DotNet. Some applications continue to use the legacy system of access database while others use advanced SQL Server. With the passage of time, as the process becomes more mature and customers become more knowledgeable, these different directions cause a conflict in interest. Higher maintenance, low compatibility and inadequate integrity demands need for reengineering and consolidation of business process. Business intelligence provides enterprises with the right path for business process reengineering, in addition to making sure that the initiative addresses all concerns identified through historical data and business intelligence.
Lessons from hands-on experience
We have partnered with clients and re-engineered their business processes for several legacy applications to resolve conflicts. These conflicts arose due to isolated individual applications, inconsistent and bulky data volumes, and lack of systematic processes to convert data to information. We introduced business intelligence tools into the system and, to their surprise the clients began reaping the benefits within a short span of time. There were changes and business process reengineering activities initiated by the meaningful direction provided by these tools. Through business reengineering and process consolidation, the customer started experiencing more benefits than expected. The steps followed to implement the solution are:
- Analyzed several applications used within client organization in the Commercial and Consumer lending domain
- Implemented business intelligence tools across applications in scope to gather meaningful data
- Identified applications and processes to be streamlined based on the direction received from the BI tools
- Qualified applications went through business process reengineering and business process consolidation
- Improved data integrity and reusability through data consolidation and single view
The success of this systematic solution was the result of the close partnership with the client and the ability to leverage subject matter expertize from both sides. Actions were driven by data and results were driven by action. The client was able to address existing business issues and significantly enhance user experience. Infosys helped reengineering the user interface based on several attributes that were obtained through a thorough analysis of product-related data. These solutions resulted in the streamlining of legacy applications and created a single window view of the data and applications across the entire commercial and consumer lending domain.
In today's information-driven world, data is one of the most valuable resources an organization can possess. However, the data is only of value if your institution can analyze it to derive actionable insights and drive tangible, measurable improvements - for the customer as well as yourself. Leveraging the power of business intelligence to reengineer business processes can help you reduce operational costs and financial risk.