Improving Global Transaction Banking Through Analytics

By M. Isi Eromosele

With increasing volumes, decreasing margins, rising competition, evolving regulation, rapid technological changes, expanding financial crime and evolving customer needs, it is clear that the transaction banking marketplace has changed and business as usual is no longer an option.

To manage these changes, institutions need enhanced insight into customer relationships, payments and securities transactions, revenues, costs, risks and liquidity positions, all of which must be consolidated across all lines of business, products and geographies.

Real-time and predictive analytics enable banks to embed precisely these insights into processes and systems. Such embedded services produce the information necessary for enterprise-wide integrated risk management, customer relationship management, and product optimization and operational effectiveness, capable of anticipating disruptive events and predicting customer demands.

The Power Of Analytics

As a result of the global financial crisis, banks are facing intense pressure on multiple, competing fronts. No longer satisfied with trusting banks to act in the public interest, regulators and governments are becoming more prescriptive, requiring more detailed and frequent disclosure and undertaking more forensic analysis. Capital is scarce and will become more expensive.

The challenges of increasing volumes, evolving regulation and growing competition from new entrants, alongside sophisticated financial crime and more complex customer demands collectively require new and innovative business models to drive growth and performance.

This can only be achieved through enhanced insight into client relationships across all lines of business products and geographies, as well as an enterprise-wide view of transaction flows, revenues, costs and liquidity positions.

Responding to these challenges require driven new approaches and leading financial organizations need to start embracing analytics to determine what they are doing, why they are doing it and what they should be doing to survive and thrive in these turbulent

times.

How Are You Doing?

How are you performing and how is that performance impacting your organization’s objectives?

To answer these two questions requires timely insight, generated efficiently, managed appropriately and distributed securely across the bank. The principal means for doing the above are:

• Dashboards: highly graphical and timely presentation of performance data against financial, business and operational targets. The information may be produced centrally and/or tailored by individual users.
• Reporting: timed, event-driven and/or ad-hoc insight into performance goals.
• Scorecarding: key performance indicators (KPIs) and predictors (KPPs) for critical financial, business and operational targets that provide governance and control. Leading and lagging indicators can be identified, targets and tolerances set, indicators owned and commented, and proactive alerting of breaches and events may be triggered.
• Analysis: ad-hoc business analysis and investigation to explain unexpected outcomes.
• Mobile intelligence: alerts, commentary, insight and analysis delivered to remote mobile devices, such as smartphones and tablets.

Predictive Future

Understanding current performance, iteratively developing organizational learning, and anticipating changes and sensitivity demand advanced analytical and predictive

capabilities.

The models used to generate what-if and most-likely scenarios need to be owned by the business and the results must generate confidence if the insight deployed to front-line

decision makers is to have genuine value. Key areas to consider are:

• Capture: collect and collate structured and unstructured data to understand attitudes, correlations, preferences and behavior.
• Analyze: use comprehensive, easy-to-use data sets and predictive analytics tools for business users, analysts and statistical programmers.
• Predict: use powerful, versatile data mining and modeling tools to create predictive customer and operational models quickly and intuitively, without programming skills.
• Deploy: drive results-oriented decisions by building analytics into operations. Integrate the analytics that predict outcomes, and automate processes to deliver insight at the point of impact.

What Should You Do?

Insight needs to inform strategy selection, business modeling, forecasting, budgeting and planning, enabling executives to make fact-based decisions. To build a complete picture of the business impact of decisions, it should be possible to model alternative analytic scenarios, such as:

• Strategy Selection: enable business planning, budgeting, forecasting, what-if analysis and scenario modeling for financial and operational plans, including objective setting.
• Policy control: create and embed policy controls and tolerances with business and department owners.
• Operational Risk: create operational control frameworks, and model potential loss events to inform capital provisioning.
• Governance: establish and monitor statutory financial control and regulatory reporting.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group