For any organization across the globe, reporting plays a key role in its success as it not only suggests how well the organization is performing but also the areas which are of focus for the management. In Financial institutions including Banks, reporting is even more important from a governance and regulatory standpoint. There are reports that all the financial institutions need to file to the regulators at regular intervals. It is observed that FIs and Banks have invested heavily in improving their processes, products, services, etc. However, most of them are still using legacy systems and old methods of reporting, whether it’s internal or for regulators. So, with the evolving time, there is an imminent need for FIs and Banks to adopt the newest and latest systems for reporting so that they are not only compliant but can also take accurate and timely business decisions.
Existing Reporting Challenges for Banks & FIs
Most financial institutions and banks don’t have an integrated reporting tool/system that can collate data for a department. Different types of data are stored in different source systems and are collated to bring it into a reporting format. Also, the linkage of data is a big challenge e.g. if a customer is using multiple products in a bank, there is no way to know what products are being used by a particular customer. Similarly, management doesn’t have real-time access to important reports, they have to request them and then they are collated to their use and decision making. Getting real-time updates or dashboards is scarcely available, however, looking at present advancement it is something which can be easily made available.
Limitations of Traditional reporting Tools in the Banking Industry
- Inefficiency in processing huge data sets: For an effective decision making process, an organization has to dive through 100% of its internal and external data. With banking data increasing every second with the increase in the number of transactions, it is near difficult for traditional reporting tools to work on these huge datasets and almost impossible to do this in real time.
- Lack of Advanced Analytics Features: Historical data presents a clear picture and banks have to monitor this in order to be compliant. Metrics of banks exhibit aspects of Seasonality which means there are cyclical patterns in time series data. The periodicity of cycles may differ from an hour, a day, a month to several years. These patterns help in taking better decisions for new products, understanding customers and avoiding breaches of regulations. Therefore BI tools must have the capability to detect them from time to time and forecast in advance. These types of advanced analytics features lack in most of the traditional tools.
- Lack of granularity for parsed information: The deeper an organization digs into its data, the better the insights and decisions can be. It is expected from any type of reporting to present an accurate and highly detailed view, and an option for the stakeholders to see granular level information. Traditional reporting tools fail on this expectation of a high granularity level.
- Collating and analyzing data from various source systems: Different departments use different source systems, however, in some cases one department uses multiple systems for different activities. For example, Anti Money Laundering (AML) has an on-boarding system, a transaction monitoring system and also a case management system. There could be an alert during both the on-boarding and the transaction monitoring stage but both the alerts are of different nature and cases may be investigated in different instances of case management. Many times different departments with their limited business knowledge fail to see the link between various banking processes. A holistic view requires reporting tools to connect all sorts of data sources and then develop visualizations on it. But in most of the traditional tools, the analysis of combining the entire data sources are not properly supported.
How to choose the right Modern Reporting Solution to get the most out of your Data
Every data visualization and reporting tool comes with its own unique set of features. Sometimes it becomes burdensome to actually show the right visualization to the right stakeholders because an incorrect or clumsy visual can confuse them and deviate from the important topic. Banks looking for better Data Visualization through modern reporting should focus on:
Purpose Prior to creating any visual, it is important to understand its significance and purpose, and also to identify whether the information is data-driven or just conceptual. Requirements need to be properly captured so that only visuals are designed by creating data models, transforming data and using charts and graphs.
Audience There are several tools in the market which are user friendly and then there are others which are functionality oriented. It is important to understand your audience. Suppose your audience is not trained enough to see the right visualizations. In that scenario it is of no use to choose functionality over user friendliness. The selection of tools should also be based on the nature and understanding of your end audience.
Features In this technological era, the market is full of tools and technologies which on the first hand seem to be very promising. With great features and functionalities often comes great costs. It is a must to list down the features which are needed to fulfill your purpose; any additional features which are not utilized make no sense.
Team Skills The power of any brilliant solution lies in its implementation, which should be done by a skilled team. Therefore, organizations must train their teams to enhance their knowledge; before choosing any solution the team knowledge about it should be top-notch.
Conclusion: Banks should embrace Modern Reporting and a Future-oriented Mindset
The world is continuously evolving and in the new era, data takes a central role for financial institutions. Though BI has become an important pillar of growth, a large number of banking organizations are questioning if their existing business intelligence tools can keep pace with their changing business needs. Tools and Technologies are also evolving but their adoption is subject to continuous awareness and a future mindset that can foresee potential benefits. A change-mindset is needed to embrace a new way of reporting. Hence, all banks should take an immediate step towards modern reporting solutions to ensure a smooth transition before it’s too late.