The bank failures in the year 2008 have left a scathing scar on banking industry. There were big names in Banking and Financial Services Industry (BFSI) involved. Like Lehman Brothers, Morgan Stanley, Bearings, AIG, Lloyds, etc., the pity part is that they had the best processes and systems in place. The fall out is one of the worst in history resulting in deplorable bail outs by ex-chequer. Of course, the aftermath is a series of reforms and steps.
The information needs of banking sector are unique compared to other industrial/service enterprises. Banks deal with money and only money. By accepting money as deposit they lend money. They get earnings from interest difference and service charges. Most of the time the money handled ends up as data. Their services are in real time, usually spread well over wide geography. And banks are governed by rules of the land; in addition to its own business standards like BASEL II.
Let us have a look at the IT and BI systems in banking.
Information Technology in Banking
In fact even before the arrival of computers, extensive manual records were maintained in banks. With the introduction of computers (and computer networks), the banking operations have undergone a sea change. The Core Banking System or CBS is the main piece of software application associated with banks. With CBS all the core transactions of the bank is carried out in a centralized -manner. CBS is used to maintain account information, transactions, calculation of service charges, interests, credit history etc., almost all the banking operations with Core Banking System. The digital data replacing ledgers and record note books! Everything transmitted, stored and backed-up in digital form. This has resulted in any where banking instead of limiting an account to a particular branch. The CBS has tremendously changed the way the banks operate, in the recent times.
Business Intelligence in Banking
Using Business Intelligence, banks can optimize their operations. It can be in Historical Analysis of Data, Performance Budgeting, Customer Relationship Management (like finding new customers, exploring the current customers higher service worth, effectively communicating with them etc.,); Or in: Risk Management; Or in Regulatory Compliance -Un cover fraud, anti money laundering etc., There is varied requirements of BI at varied levels. For example, Bank Branch Managers need more Operational Business Intelligence.
Operational Business Intelligence
Most of the bank account and transactions details are collected at Bank Branch level. These transaction data are aggregated and send to higher corporate level. An operational business intelligence supporting the decisions taken at Branch Level is required. This operational BI includes, support system for verification of accounts, profitability of the branch and its sections, transactional data between various branches and their balance of payment transaction, purpose specific BI with multi account corporate bodies etc.,
Temenos T24 CBS with Insight BI
Temenos is one of the leading global providers of Core Banking Systems. Temenos CBS is ranked continuously as one of the leaders in Gartner’s Magic Quadrant. Temenos has its BI suite Insight implemented in some worlds’ leading banks. Incidentally this BI suite is built on Microsoft platform and can work seamlessly with Microsoft Excel and Ms SQL Server. Insight BI is a comprehensive, packaged business intelligence suite that empowers banking staff to make faster, fact based decisions to strengthen customer insight, risk and compliance and performance management strategies across the enterprise.
Conclusion
A recent McKinsey study points out that, there is co-relation between performance of banks and their implementation of banking systems. The verticalized BI solutions can help banking sector with better risk management, customer relationship and profitability. As SAS Credit Risk Management for Banking solution states, with better system implementation banks can regain the confidence.