Operational Business Intelligence in Banking

Operational Business Intelligence in Banking

Special Report November 2007 Author: Hari Misra, Editor-in-Chief, Finsight Media eMail: hari@finsight-media.com

Contents

INFORMATION NEEDS OF BANKING ARE UNIQUE BUSINESS INTELLIGENCE IN BANKING OPERATIONAL BUSINESS INTELLIGENCE OPERATIONAL BUSINESS INTELLIGENCE IN INDIAN BANKS IS THERE A WAY OUT? 3 5 9 12 17

Research Sponsor:

Finsight Media 104, Hillside-1, S. No. 1, Baner Road, Pune 411045, INDIA. Tel: +91 20 40788537 Fax: +91 20 27291351 eMail: contact@finsight-media.com Copyright 2007: Finsight Media. All Right Reserved

Operational Business Intelligence in Banking

IBA - Finsight Special Report November 2007

1. INFORMATION NEEDS OF BANKING ARE UNIQUE

The information requirements of banking business differ from other businesses on account of the following:

a. Banking converts money into information and vice-versa

Modern banking offers a large variety of services. But the most fundamental activity of any bank is ‘accepting deposits for purposes of lending’. By accepting deposits it converts money into a piece of information that is commonly known as ‘bank balance’. It converts this information into cash at ATMs and its branches.

b. Banking manipulates this information to produce services

The large pool of banking services is a result of various ways in which banks manipulate this information. For instance, banks offer payment services through cheques, drafts, electronic remittance, plastic cards, and mobile phones. What actually moves is the information, and what actually changes is also the information. It comes as no surprise, therefore, that banks worldwide are the major users of information technology.

c. Like any service industry, banks produce in real time

All services are produced and consumed in real time. When you want to deposit money, the bank produces ‘the deposit accepting service’ at that point of time. If you want to remit money to another person, the bank produces the...