February 21, 2014

Jon Deutsch, Information Builders
Jon Deutsch, Information Builders

For years, banks have sent static statements to their customers -- primarily monthly and quarterly summaries of checking, savings, credit card, mortgage and investment accounts.

But in today's highly automated digital world, both retail and business banking customers want to interact, explore and engage with their personal data.

Financial services institutions need to provide engaging consumer experiences, especially to attract younger clients who will grow with the bank and become an important part of tomorrow's revenue stream. This trend is especially prominent within the realm of personal financial services, where national and multinational banks are vying for customers by offering highly personalized, interactive services for reporting and analysis of financial and investment data.

Step 1: Recognize Your Information Capital

How can banks move to the front of this rising wave? The first step is to adopt a new perspective: the information you have stored in your databases, data warehouses, and transaction applications is not only of interest to your internal employees, but also to your customers, partners and other third-party stakeholders outside the business.

Just like financial or human capital, information yields higher returns the more it is used. You can extract this information and make it accessible with business intelligence (BI) software. Business intelligence has always been about transforming data into business value. These capabilities are trickling down from professional analysts to casual business users as a new generation of mobile BI apps sweeps through the financial services industry.

These apps rely on data visualization techniques to make sense of complex information -- including financial data. Customers can see at a glance how their finances compare to last month or where their finances stood at the beginning of the year, for example. They can also see their allocations and shares, obligations and liquidity, and the efficiency of the investments over multiple time periods.

For example, Hof Hoorneman Bankers NV, an independent investment management company with a bank license issued by the Dutch Central Bank, uses BI tools to deliver interactive e-statements that let users perform common analytic functions such as sorting, filtering, calculating, and charting their financial data.

Adobe Flash graphics allow customers to see investment results and historical developments through interactive charts, graphs, and tables, making it easy to clearly discern the underlying numbers. Since they are standard PDF files, these statements can be easily distributed as e-statements to large numbers of customers.

Step 2: Empower Your Customers

Business customers appreciate creative reports about their credit cards, debit cards, corporate cards, and other types of electronic payments.

For example, Moneris Solutions, Canada's leading technology merchant credit card processing company, uses BI tools to create a value-added service that allows merchants to view their debit, Visa, and MasterCard transaction data online.

Merchants can drill down into daily sales data by store as well as aggregate summary information to reflect the operation as a whole. This self-service app makes it easy to access information about cash flow and consolidated statements, so merchants spend more time focusing on their customers, and less on routine administrative tasks.

All merchants need is a standard web browser to access all of the rich capabilities of this online application, making it easy to scale to hundreds of thousands of users.

Creating BI apps that are intuitive and visually appealing isn't all that's important.

These apps aren't truly valuable unless they can access trusted information. They need to tie into a robust back-end infrastructure to ensure the quality and integrity of the information. They also need to be scalable to serve the needs of a large and growing user base.

Step 3: Differentiate with Analytics

Already, online and mobile banking services are the rule rather than the exception as both traditional and new-era banks focus on delivering unique digital experiences.

Routine electronic banking services are just the starting point.

Differentiation and competitive advantage will go to those institutions that can take the next step: figuring out ways to teach software to replicate complex behavior -- in particular, offering advice and insights.

Almost all of the 'by rote' activities such as transfers, deposits, withdrawals and loan applications have been partially or fully automated. Progressive banks are looking to create personal financial management applications and dashboards to help consumers analyze their assets and achieve their financial goals.

About The Author: Jon M. Deutsch is Vice President and Global Managing Principal for Banking, Financial Services & Insurance at Information Builders, a New York-based software company that brings smarter decision-making and streamlined processes to leading organizations in banking, capital markets, brokerage and payment processing, worldwide. Nine of the 10 largest banks in the U.S., the five largest banks in Canada, and 85 percent of the world's most important financial institutions rely on software solutions from Information Builders to analyze and manage their data.