Business Analytics and Data Warehousing Business Analytics as a concept has come a long way, from being a novelty to a norm today Suresh Kumar Financial Services Asia Pacific Oracle Corporation Agenda • Market Assessment • Business Analytics in Banking • Trends In Banking • Business Requirement in Banking • Oracle Business Analytics Solution • What Are Analysts Saying • Summary • Customer Insight – understand customers better, improve interactions and responsiveness, offer multiple channels • Operations transformation of legacy systems to improve process efficiencies • Corporate Governance – integrate Risk Management in day-to-day operations and performance management. • Reduce back office costs through shared service centers, automation of processes • Regulatory compliance requirements • Managing human capital for increased competitiveness Business Drivers Business Drivers Business Challenges Business Challenges Market Assessment: Banking Key Business Drivers & Challenges facing the Banking Industry: • High cost of maintaining highly customized older technology – many organisations looking to replace core systems • Fragmented data – difficult to understand profitability of customers, products and channels • Lack of automation to support key Banking processes, eg: loan origination, transparency and accountability enabling regulatory reporting/tracking • Consistency of service across channels and improve cross selling • To service current business needs through an adaptive IT architecture • To manage human capital and internal knowledge Business Analytics in Banking 2 nd Time Around  Business Intelligence “Failure” – Prior limited success of BI-DWH were not just technology problems, IT was only one of the many reasons  Growth in Distribution Channels & Delivery Systems – Branch, Internet, Contact center, ATM, Payments, Kiosks, Mobile Devices…  Lack of Industry understanding in the past – BI-DWH is about bank profitability & risk, retention and acquisition, not just reporting – Understanding your customer (customer data), automation and integration across systems  BI-DWH is now a Strategic Platform Business Analytics in Banking 2 ND Time Around • Unnecessary Software Spending • Excessive Training Development and Support • Multiple Versions of “Truth” Multi-Vendor BI Strategies Integrated BI Platform • Unified Data Layer • Centralized Tools • Shared Metrics • Complete Customer View • High Net Worth • Mass Affluent • Mass Market • Premier Banking • Geography • Demographics • Product Segments • Alert/Notification • Sales Call • Correspondence • Email • Recovery Plan • Launch Marketing • Hold on Account • Retention Plan • Cross Sell • Personalized Plan • Account • Asset • Liability • Contact Behavior • Customer Information • Customer State • Warning/Fraud Detection • Request to Close an Account • Significant Balance Fluctuation • Address Change • Birthday • Call Frequency/Trends • Documentation/Funding • Fraud Alert • Last Payment or Prepayment Request • Maturity of Investment • Missed Payment • Name Change • New Channel/Product/Service • Trade Information/Transaction/Information Retail Banking ActionsEvaluationsKey EventsIndustry Value Proposition • Information driven Personalized service to the customer across all touch points • Help Increase customer retention and wallet share • Enable execution of segment strategies across branch, call center, web • Drive ROI from data warehouse / mining investments Example – Retail Banking Future Trends in Banking Exception Based Banking – Real Time Interaction Segment a Segment b Segment c… Customer Segmentation & Analysis Select Acquire Retain Extend $  What to Sell  Which Customer  What Price/Risk  What Channel  What Margin? Customer Level Profitability (RAROC) Revenue Expense Cost Of Funds Expected Losses Risk Charges Enterprise Wide Information Data Warehouse & Customer Data Integration Customer Accounts Transactions Products Channels Business Units Financial Acct Future Trends in Banking Beyond Traditional BI-DWH: More Customer Centric Model Future Trends in Banking Empower All Users - Not Just the Few Executives Concise metrics on KPIs at corporate level Highly correlated with overall strategic plans Management Focused on Key Performance Indicators for a business unit Report employee performance versus goals Broader scope of business Employee Users Targeted analytics to improve job performance Broadest scope for ad-hoc analytics Partners Targeted analytics to improve multi-organization initiatives Limited ad-hoc capability Customers Highly focused analytics to monitor customer activity and guide behavior Summary Detailed STRATEGIC TACTICAL ACTIONABLE RELATIONSHIP INFORMATIVE Business Users Requirement Business Users Want Answers Credit Risk Credit Risk Credit Risk Credit Risk Retail Retail Retail Retail Finance Finance Finance Finance H R H R H R H R Market Risk Market Risk Market Risk Market Risk Liquidity Risk Liquidity Risk Liquidity Risk Liquidity Risk Strategic Issues Strategic Issues Strategic Issues Strategic Issues Tactical Issues Tactical Issues Tactical Issues Tactical Issues Operational Issues Operational Issues Operational Issues Operational Issues ? [...]... Data Warehouse Enabling Analytics to Provide Business Insight What is Data Warehouse? Definitions “A Data Warehouse is a subjectoriented, integrated, time-variant, nonvolatile collection of data in support of management’s decision-making process.” Bill Inmon The data warehouse is intended for knowledge workers, that is, the people who need to analyze information provided by the warehouse and make business. .. sophistication Simplify, costly ETL procedures Complete ETL, metadata services, based on open standards Oracle Business Analytics Platform Simplify Your Life S O U R C E S Y S T E M U s e r A c c e s s Oracle Business Analytics Helps Bank to Achieve Revenue growth • Achieve Single view of customer Data, optimize customer segmentation unify the data silos” and provide a single version of the truth throughout the... Poor and incomplete BI solution P o rt al Oracle’s Business Analytics Strategy Simplify, simplify, simplify Enable consolidation to fewer, more cost effective systems Scalable, integrated, costeffective data warehousing Eliminate the need for special purpose engines Analysis capabilities embedded in the database “Bring the algorithms to the data, not the data to the algorithms” Simplify the end-user experience... decisions Oracle’s Business Analytics Solution Traditional Business Analytics Environment Multi-Vendor, Un-integrated OLAP Engine ETL Tool Analytic Apps Transformation Engine Name/Address Scrubbing Transformation Engine Security? Mining Engine Query & Analysis Database Reporting Engine Enterprise Reporting • Protracted and complex implementation • Escalating maintenance costs • Poor and incomplete BI... identify risky behaviors and profile, target proactive service and marketing actions to prevent and reduce attrition • Better cross-sell/up sell through increased interaction intelligence optimize each interaction to increase perception of value added to customer Banks need to truly understand what is being done with their products and services and how they impact a customer’s life and lifestyle • Accelerate... seconds and pervasive rather than days or weeks long and exclusive Deliver granular insight to all touch-points in order to respond rapidly and intelligently to customer requests, and increase the value of each interaction Oracle Analytic Applications Increase Value of Every Step Of The Customer Lifecycle Implementation Approach for Banking Data Warehouse in Banking In search of a problem • Business. .. & Solution – – • Real Application Cluster Various Options e.g Partitioning, OLAP Analysts Reports & Benchmarks Reference Customers Security and Audit – – Most Secure Database Extensive audit capabilities within the Database Oracle Business Intelligence & Data Warehousing Thank You ... the Bank to provide the service differentiator and innovation to it customer • Enable Banks for Corporate Compliance and Regulatory Compliance • Enable Banks to provide analytical information to every realm of the business for making better and informed decisions • Enable Banks to provide a uniform method for information delivery irrespective of location and geography though a well defined user friendly... Initiatives – Information that supports initiatives Data Warehouse in Banking Starting Points • • • • • • Top Down: Business / Functional Analysis Bottom Up: Technical Analysis Think Big, Start Small Incremental - limit scope, limit risks Each increment has value Start with Proof of Concept Data Warehouse in Banking Implementation Methodology Warehouse Planning Phase Business Strategy IT Strategy Warehouse Infrastructure.. .Business Users Want Answers Customer Segmentation • What is the customer break up across various categories (e.g salaried, selfemployed and professionals; rural and urban)? • How has this changed over the last three months in different organizational units reporting to me? • What is the demographic and lifestyle break up of my customers? Budget Achievement . Business Analytics and Data Warehousing Business Analytics as a concept has come a long way, from being. Agenda • Market Assessment • Business Analytics in Banking • Trends In Banking • Business Requirement in Banking • Oracle Business Analytics Solution • What