Business Intelligence in Banking Through Transaction Monitoring

What is business intelligence in banking? Leverage existing data to make smart business decisions.

What if you had a magic crystal ball that could help you make decisions at work? In a way, that’s what business intelligence is. However, business intelligence isn’t magic, it’s data. And it doesn’t just help Fortune 500 companies be successful; it can be used in financial institutions as well. Here’s what it means to leverage business intelligence in banking.

According to CIO.com, business intelligence is “an umbrella term that refers to a variety of software applications used to analyze an organization’s raw data.” Generally, organizations use business intelligence to make strategic decisions, cut costs and identify new business opportunities in support of the organization’s business goals.

In banking, business intelligence can be used for several reasons. For example, it can be used to analyze demographic data and trends among customers, predict cross-sell opportunities, and so on. Perhaps most importantly, business intelligence can be used to retain customers.

Retaining and growing customers is the core of business banking, and it is getting more difficult than ever. For every 1 account that closes, on average, 1.3 accounts are opened. Plus, the cost to acquire and retain customers is fairly high – it costs an average of $800 to acquire a new customer and $133 to retain an existing one. 

One way to retain customers is offer products and services that are right for the customer’s needs. A staggering amount – 70% – of additional products are sold at key life events such as buying a house. It sounds simple enough, right? However, it is easier said than done. Without automation, it can be difficult to analyze data for trends. Furthermore, Marketing Customer Information File (MCIF) systems can be overcomplicated, core reports can be inefficient and the data provided by some third party systems can be outdated. By the time you analyze the data, the customer may already be on his/her way out the door.

So how do you anticipate what the customer needs? How do you predict a key life event and provide a product or service that will truly add value? The answer is in your transaction monitoring. You can leverage the data already coming into your institution, without relying on a third party, to analyze patterns in customer activity.

Here’s how it works. Your core system does its nightly update, the data is run through an automated solution (like Relationship Manager from Banker’s Toolbox), and goes to both the compliance department for traditional transaction monitoring, plus other relevant parties (marketing, branch managers, retail team, etc.) These parties are notified if a transactional event indicates a risk for attrition or an opportunity for cross-sell. Like magic!

To learn more about how Banker’s Toolbox can help you achieve banking business analytics through a new tool called Relationship Manager, visit the Banking Data Analytics page or email [email protected].