How finance leaders use analytics to manage risk and maintain profitability

Jon M. Deutsch, Vice President and Global Head of Financial Services  at Information Builders writes,


Using data to manage risk

The Amercian Institute of Certified Professional Accountants (AICPA) asked more than 400 finance leaders and chief financial officers about their risk management strategies. The survey, undertaken in partnership with The North Carolina State University Enterprise Risk Management Initiative, found that 65% of those surveyed had recently experienced an ‘operational surprise’ from an unanticipated risk.

Among the top five risk management pitfalls, AICPA identified lack of collaboration with the IT department, advising, “IT can provide key metrics for your risk analysis, help mine the data and assist in SWOT (strengths, weaknesses, opportunities and threats) analysis.”

Using technology to gain visibility

Jon M Deutsch

There are now so many more sources and varieties of data that integration tools are crucial to the success of analytics strategies. To gain reliable business intelligence, organisations need to ensure that they are able to integrate unstructured and structured data. For example, to gain insights into customer demand, organisations might need to combine structured enterprise data from retail sales, with unstructured textual information from customers’ posts on Twitter, Facebook and LinkedIn.

Many of the organisations we work with have unlocked the value of their business intelligence (BI) and data analytics investments by empowering frontline workers to use embedded analytics to generate their own reports and insights to anticipate risk and identify opportunities. It’s really important to remember that most users of operational data will not be trained data scientists, they will be line-of-business managers, call centre staff, or financial advisors. These colleagues need straightforward ways of reading from one or more repositories of trusted information that have been distilled from many sources.

Enabling user insights

Technology is only useful when it’s being applied. The key is to make it easy for all users. To encourage adoption, theWebFOCUS business intelligence platform allows authorised employees to simply search by account name, customer, product, or any other data characteristic available, to discover valuable insights and the detail necessary to identify opportunity and risk – a user experience akin to Google for business intelligence.

Democratising data analytics at PostFinance


Switzerland’s number one payment transaction provider, PostFinance Ltd., needs to provide 2,500 users with current operational insights. Using the WebFOCUS BI platform, PostFinance employees have role-based access to portions of the database, which are required to enable them to acquire current operational data. The BI platform goes beyond traditional reporting by enabling employees to conduct self-service analytics on their mobile devices, with the option to drill down into information to enable further decisions and actions.

Ensuring data quality


To encourage employees, partners and customers to embrace data analytics and make the most of BI investments, the data must be trusted. It is therefore crucial to address data quality issues before rolling out data analytics to the user base. By using BI platforms that can automatically refine data, organisations can prevent unreliable information making its way into dashboards, charts and reports, without having to devote additional human resource to manually fix bad data. It only takes one bad experience to see people going back to using Excel spreadsheets, calling on the IT department to generate reports, or installing shadow IT tools for data discovery. In addition to wasting the enterprise investment in data analytics platforms, shadow IT use will lead to data silos, disjointed reports and data quality problems across the enterprise.

A picture is worth a thousand words


International recruitment agency, Robert Half Finance & Accounting, asked 2,200 chief financial officers what keeps them awake at night. The responses revealed that CFOs are concerned about developing communication skills, as well as managing risk and steering the financial performance of their organisations.

The Robert Half survey revealed that to help their organisations navigate technological transformation, today’s financial directors need to hone their technical and communication skills, as well as their strategic skills. To assist financial directors with communicating key data points to the board and line of business managers, WebFOCUS makes it easy to automatically create infographics from operational data, so that trends, risks and opportunities can be rapidly communicated to those with the power to act.

Creating fresh revenues from data


In addition to identifying risks and protecting profits, when high quality data analytics are effectively implemented they can help financial organisations to identify fresh revenue opportunities. This was the case at First Rate Investments.

Each evening, after the market closes, First Rate Investments receives holdings and transactional records for more than one million accounts. Deborah Repak, managing director and general manager of the Products group at First Rate Investments decided to build a self-service analytics portal, ExecView, which transforms this large data set into data visualisations and reports that help clients to quickly see how their portfolios are performing.

First Rate’s clients saw that there were numerous other questions that could be answered using the same self-service application. Clients suggested several ways they’d like to view their data, such as ‘show me the top 10 holdings across selected domains’. What began as a customised product for one client, quickly turned into a general purpose product that First Rate Investments now sells to broker dealers and other financial services companies.

An investment firm can use the ExecView app to determine activities that may be driving increased revenue through fees, or look for areas where assets under management may be decreasing, or run checks and balances to reconcile accounts that are out of line.

ExecView also helps to prevent regulatory issues in trading, cash management and diversification, and helps wealth management firms to comply with U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) requirements by shedding light on trends and practices that might otherwise be overlooked. Data visualisation within the ExecView InfoApp makes it easy to detect pertinent trends and take appropriate action. Deborah Repak reports, “ExecView has resulted in a 10 per cent increase in our revenue per year as a value-added service.”

Keeping an eye on the future


CFOs are agents of change and need to keep abreast of technological developments. Organisations increasingly draw operational data from connected devices, online activity and social media, in addition to traditional EPOS, CRM and ERP systems. By liaising with their colleagues in IT, financial directors can ensure that operational intelligence can be gained from existing data sources as well as integrating business intelligence platforms with emerging technologies such as blockchain, and supporting integration with IoT devices and data science languages such as RScript, RServe and Python.

By delivering models and formulas within intuitive self-service applications, dashboards and reports, everyone in an organisation can be empowered with advanced analytics, without requiring them to become technologists or data scientists. Finance leaders can draw from trusted data sources to identify risk, returns and fresh opportunities and clearly communicate these to the business using familiar data visualisations.


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