Banking on Analytics in 2013
January 17, 2013
As banks and credit unions search for ways to be more competitive in 2013, many are examining analytics to improve the customer experience while increasing their efficiencies and overall operating effectiveness.
Today’s financial institutions are among the most data-intensive organizations in business today, and their use of data is increasing at an unprecedented rate. Not only do financial institutions collect, analyze, and use structured data as part of every transaction, they also feeding their CRM and other enterprise marketing systems with such data. In addition, they are now beginning to collect and analyze unstructured data to better mine social network data for use within their systems, making them prodigious creators and users of “big data.”
Many financial institutions are concluding the only way to keep up with this data avalanche is by using analytics tools. Without a robust processing method, such data is merely bits and bytes, and meaningless without context.
But what is analytics? It’s such a broad term that it can mean different things to different people. Typically, topics such as databases, data warehousing, data mining, business intelligence, marketing analytics, and predictive analytics are top-of-mind when discussing analytics.
Conventional descriptions vary, but a common component of analytics technology is the categorization of data in a relational database or centralized data warehouse. Relationships are organized in tables, with queries of the data often made from table views. These queries are typically executed through a Sequential Query Language (SQL) interface, through SQL statements, or similar data extracts using variations of SQL or other methods through product interfaces.
Analytics products and methodologies enable drill-downs into the data, offering nuggets of information not available with traditional reports or other processes. The end result of such efforts is deep insight into customer needs, wants, and behaviors.
For financial institutions seeking ways to increase their competitiveness in their markets, expanding the use of analytics should be on their short list. Analytics can help identify relationships between disparate data sources that might otherwise be unknown or unavailable, and offer visibility into attributes that can contribute to an increase in customer satisfaction and loyalty, a decrease in attrition, and the creation of a truly superior customer experience.