If you step into your bank today, it seems that all the services the bank is offering are tailor-made for you. It sets you thinking about how your bank knows your needs so well. The answer is quite simple. All kinds of organisations including banks are today equipped with business intelligence tools to enhance their product mix. Enterprises are facing enormous data growth in the current information era and are desperately looking for tools that can help them to extract intelligence about the market using available data.

Business Intelligence (BI) can be defined as a set of technologies, applications and tools for the collection, integration, analysis and presentation of business information. BI has become a handy tool for most companies to gain analytical insights. And experts are backing this trend. Ted Friedman, research vice president, US, Gartner, says that today organisations want more transparency in the way they conduct their business. "BI helps them to allocate their resources in an efficient manner. It also provides them insights to identify opportunities for business growth and that’s the reason why BI is very hot," he explains. As per an IDC report, the Indian BI software market is slated to grow at a CAGR of 35.9 percent. (Source: IDC's India BI Software Market Report, June 2007).

Banks exploring BI solutions

BI is slowly gaining popularity among various industry verticals in India. At the macro level though, banks are proving to be the most aggressive adopters of IT systems in the country vis-à-vis other corporate organisations. The banking sector is actively looking for analytical tools to exploit the data generated by their multi-channel operations. Leading banks like Centurion Bank of Punjab, Kotak Mahindra and Yes Bank are driving the BI revolution by either implementing or evaluating BI solutions for their respective organisations.

Currently, IT systems like Core Banking and CRM, which are already being widely used by banks, generate a humongous amount of data everyday. However, this data is not put to any relevant use. Umesh Jain, CIO, Yes Bank, feels that this data can reveal consumer trends, patterns and correlations among various factors. "“The available data at this point of time is not being used to enrich the relationship between various business parameters or even to address the issues that banks might be encountering," says Jain. Arvind Kathpalia, CTO, Kotak Mahindra Bank, expresses a similar opinion. He says that lots of data is available with banks, however, very little 'actionable' information is derived out of it.

Both Yes Bank and Kotak Mahindra Bank are relatively young banks trying to make their presence felt in the market. They have gathered a fair amount of historical data on customer transactions. Both wish to propel their initial growth and hence, are considering intelligence tools. Jain says, "A BI solution will helps us to know the kind of relationship we share with each and every customer. It will help widen our scope for expansion and help us deal better with issues that customers encounter."

While Yes Bank and Kotak Mahindra bank are still evaluating BI solutions, Centurion Bank of Punjab (CBoP) is already in the second year of its BI implementation. It has completed the first of phase of building data warehouses across 14 major business systems and is now in the second phase where it plans to implement business analytics at the corporate and product levels. "Our training programme will start with the top executives and will be extended right up to the level of branch managers so that they can apply the benefits of BI at the branch level also," elaborates Sanjay Narkar, CTO, CBoP.

Targeted financial products through BI

On one hand, while BI can help banks to analyse the tonnes of data that they possess, on the other hand, it will also help them to come up with targeted financial products. According to Jain, BI can helps banks to analyse trends and patterns from the accumulated data, which can be further utilised to do 'focussed shooting' rather than 'carpet bombing' of financial products. He explains with an example, "Let's say a particular customer, who had a baby three years back, is visiting my ATM. At this point of time, the BI solution should be able to flash a product or advertisement, which focuses on his specific needs, like insurance for his child’s education. This will change the entire manner in which banks target customers". CBoP is developing a BI platform that will enable sharing of data with front-end CRM. The queries or campaigns generated by data warehouse analytics will provide automatic feeds to CRM, which in turn will be accessible to all bankers while interacting with customers.

According to Kathpalia, it is far easier to sell a service to an existing customer than to acquire a new customer. He suggests that banks should spend time in scoring, modelling, cutting and dicing the available data through analytics to reap new rewards as they move forward. "BI also brings to the surface important aspects of customer buying behaviour and thus, helps to improve customer service".

BI- Not Just Another IT project

Adoption of BI solutions certainly means more business for banks, however, its successful implementation still remains a challenge. Companies often treat BI projects as just another IT project. BI is neither a product nor a system. It is, rather, a constantly evolving strategy, vision and architecture that continuously seeks to align an organisation’s operations with its strategic business goals. Challenges involved exist at both the technical and business levels.

According to Friedman, bridging the gap between BI as an IT project and BI as a business project is the biggest challenge for CIOs. More often, the primary focus of BI projects is tech-oriented rather than business-oriented. A CIO needs to make sure that there is adequate representation of the business community in any BI project as they are the ultimate users of such decision-aiding tools.
Besides, having the right skill set is also a key to successful BI implementation. "Most CIOs are content with acquiring and maintaining skills needed to run their operation or transaction processing systems. However, these people may not have the right skills required for the BI domain," he says.

Data quality is another major challenge that CIOs have to overcome while implementing BI solutions. Narkar feels that quality of data should be managed right from the first stage i.e. its capture or generation stage. "If customer data is not captured correctly by the system, then you may not be able to produce good BI solutions", he says. Again clean data is of no use to workers if they do not have the right context. 'Meta data' refers to data about the data, which provides meaning to each data element. Management of Meta data is a crucial element of any BI project.

Combining performance management with BI

Industry experts say that most enterprises will consider business intelligence (BI) offerings from one of the mega-vendors, whose products are already in use within their enterprises, for instance, SAP ERP implementations. Also, BI tools will be increasingly bundled with data warehouse appliances. Today, a number of organisations have real time enterprise dashboards, which provide decision makers with the key performance indicators at different levels. Increasingly, companies will integrate BI tools with performance management. It is no longer an option to report and analyse metrics in isolation. Companies recognise the connections between operational performance and financial results, leading to an enterprise-wide as well as an enterprise-deep plan of attack.