Rishi Kapoor, Head of WW Partner Sales Engineering & Solutions at Alteryx
By all measures, financial services and banking (FS&B) has been forward-thinking in adopting analytics as a sector. According to Meongage, over 66% of FS&B firms surveyed this year recognise data as central to achieving their business objectives and a core strategic pillar. Applications of analytics and data to improve customer personalisation, fraud detection and risk management processes are commonplace in the industry today and subject to continued investment.
With such investments, however, comes scrutiny of return on investment (ROI). This is especially true in FS&B. Firms face strict regulatory pressures, high operational costs, and high levels of external scrutiny – whether from investors or boards. Analytics initiatives are therefore pitted against other projects and can easily lose out when their ROI isn’t clear. Analytics can, of course, drive clear benefits. AI and automation can be used to prove that definitively. Let’s examine…
A step forward for reporting
Difficulties to date in proving the ROI value of analytics can be traced back to reporting gaps. Many FS&B firms have invested heavily in advanced visualisation and data analytics tools, but overlook the need for processes and mechanisms to report on their impact. Let’s take an example. Credit acceptance and fraud detection are two core FS&B processes that can be optimised with analytics and data. But without reporting infrastructure to track how overall loan processing speeds and losses from fraud change over time, it’s impossible to determine how the integration of analytics is making a positive impact on these processes.
As AI and automation are increasingly integrated into analytics software, the time is now for FS&B firms to act on this issue. These solution changes pave the way for a more structured approach to reporting.
People-driven change
Earlier in the year, we reported how almost all data analysts are using AI and analytics automation in their workflows today. This speaks to innovation on the tooling side, making it possible for analysts to automate workflow processes, data exploration and insight generation.
This development is significant as it makes reporting against KPIs far simpler with less reliance on manual input. Automated performance-based data collection helps analysts in FS&B organisations keep tabs on revenue, risk and efficiency metrics and their influence on these.
Automation provides another key benefit – the opportunity to make analytics more accessible. Users, regardless of technical competency, can analyse data and visualise key outputs with no-code platforms. In FS&B settings, the use of a no-code platform to access analytics reduces the strain on stretched central IT teams and supports overall efforts to meet the industry’s stringent regulatory requirements when teams can deploy analytics workflows with pre-built controls for compliance and auditability.
Additionally, increased integration of GenAI features into analytics platforms lets FS&B draw from data to generate essential but historically time-intensive regulatory reports. That’s another massive time and resource saving to be seized.
Winning over senior stakeholders
AI and analytics automation serve as the technical infrastructure to expand the practical use cases of analytics and measurement of its effectiveness. But in the massive organisations typical of FS&B, analyst team leaders must put forward a strategy to communicate the results.
As a start, leaders should define what success looks like by pre-identifying metrics that will best show the impact of analytics internally (in the FS&B context, metrics around cash flow improvement, risk control and efficiency boosts catch attention).With the right success metrics, reporting from data initiatives makes a stronger impression with teams that might not feel strongly about the value of analytics but can’t argue with how it’s being channelled to help achieve business objectives.
When it comes to communication, a regular cadence makes a big difference. When analysts share inconsistent updates about their initiatives, there’s a risk of senior stakeholders being left in the dark. Leader figures can operationalise change for improved reporting by putting in place a process for sharing monthly interactive dashboards reporting on analytics initiatives against operational KPIs. Quarterly executive summaries can serve the same purpose with a combination of numbers with concise business impact statements and board-level detail. The trick is finding the best way to drive senior awareness of the clear link between analytics and progress against the objectives they care about. Done right, analyst and business intelligence teams are in a great position to benefit from continued investment and the expansion of analytics into more areas of the business.
Flipping the script
For years, investment in analytics has been handled within FS&B organisations as a difficult balancing act. Vital, but constantly pitted against initiatives and scrutinised for ROI. It’s time to be more definitive. AI and automation make it far easier to measure and communicate the value of analytics. Clearer alignment with business value paves the way for analytics leaders to defend and expand their programmes.