“Intelligence without ambition is a bird without wings.” –Salvador Dali
Business intelligence has been listed as a top priority for CIOs and executive teams for the past several years across many industries, including banking. For banking, top business drivers have included customer engagement and innovation, but also just plain old know-your-customer regulatory and compliance expectations.
With an increasing industry focus on finding opportunities for revenue growth, BI comes up all the time in conversations of both strategy and technology. But, let’s face it. Getting past the nebulous is tough stuff with BI. What is the best approach for implementing BI in reality?
Since BI initiatives are among the worst at scope creep and, well, going off a cliff, let’s start with a definition we can (hopefully) all agree on:
Business intelligence helps turn internal transaction and external market data into an asset.
OK, got that out of the way. Now, the top challenge organizations face in turning data into an asset is leadership. Anyone running a BI team knows that managing technology is easier than setting specific priorities across the enterprise. So, from my experience, here’s the four-point plan for business intelligence leadership.
1. BI = Leadership Tool.
Business Intelligence should become an extension of the bank’s strategic direction and communicating top priorities. A few examples from the trenches:
- Identify customer pain points across physical and virtual channels
- Evaluate portfolio concentration and exposure
- Build a common single view of a customer’s relationship so communications across the bank are made in one voice
- Reduce the cost of compliance by presenting regulatory information in an enterprise-wide dashboard
- Present effective, real time cross-sell opportunities to customers and staff
- Better understand specific product cost and profitability components
BI then becomes the bank’s continuous communication tool. The entire organization sees on a daily basis a reminder of the priorities and progress to date. The tempo on projects that are driving the priorities can stay high. Transparency can improve accountability.
2. C-level managers see themselves as enterprise digital leaders rather than functional silo leaders.
As a leadership tool, BI can be used to give banks insight into their operations that can point to low-cost innovation opportunities. These opportunities often won’t surface if banks stay in functional area thinking. For example, staff can build a BI environment that collects data, measures and teaches the bank where customer pain points are. Voice analytics in contact centers can surface pain points. This gets Lending, Retail, HR, Marketing, Finance and Risk Management all involved. Everyone brings their functional lens to the table, but with the same idea of making it easier for the customer.
3. Bottom-up sounds better, but top-down driven BI is actually better.
Been there, done that, bought the t-shirt, wasn’t comfortable. Bottom-up leadership appeals to our sense of democracy and the underdog. I was the CIO of a large financial institution and introduced a BI environment driven by IT. It was technically a success, but strategically? Not so much. We believed that as we increased the number of trained power users, value would rise to the top of the barrel. Not the case. And, this was at a strong financial institution with solid proven leadership. Lesson learned. BI is tough stuff.
The bank’s chances of success with BI increase exponentially if it starts with a compelling direction from the top and asks the leadership team to imagine a BI tool set that will help get you there and help communicate the progress across the enterprise on a daily basis. Dashboards, balanced scorecards and the like are awesome communication tools when tied to a compelling direction.
4. BI is a program, not an implementation project.
As the bank becomes more digital enterprise- and less silo-focused, management sees more programs develop instead of standalone projects. The beauty of a program approach is that you expect continual improvement in a domain. With projects, you have a conversion party and then move on to the next project. You find years later there has been little or no improvement since go live.
Imagine a new customer onboarding software selection and implementation project compared to a customer onboarding program. With the project approach, the organization becomes wrapped around software selection and hitting the go live target and budget. With a program approach, the organization expects annual budget items focused on improving the customer experience, maximizing existing software assets, and continual tailoring of the onboarding process around elimination of pain points, product focus, engagement measurements, and other virtuous priorities.
This is especially important with BI because so many of the potential initiatives can be executed using different systems. The same project being touted by a data warehouse vendor might also be done by a profitability, credit, fraud or marketing CIF system. If we keep our eye on what we are trying to accomplish and the new information needed to continue the conversation, it allows us to value what different approaches and systems can (and cannot) bring without stalling the entire program.
A BI program is expected to evolve continually, be responsive to new opportunities, and be a driving source of energy in moving toward the bank’s direction for the future.
Got Big Data Under the Hood? How About an ETL Engine?
GonzoBankers out there may have noticed the absence of big data, OLAP, ETL, meta data, and other components of the typical BI tech stack in this article. The technology solutions available are ever changing. They are the shiny chrome wheels on the muscle car. We get it.
We’ve seen BI data architecture charts that were super cool but also clearly designed to scare off small children, senior executives, and anyone else with a short attention span. They are not the place to start a BI conversation, much less a BI initiative. Once the bank has a compelling direction for BI, the makeup of its technology stack will be easier to define and implement.
Let’s Do This.
If a bank’s team is not committed to leading, BI initiatives might actually be the single largest waste of spending out there. That said, better customer engagement, risk management and innovation can all be enabled with BI. Yes, with a return on investment, too. Staff can be fully informed on the bank’s desired direction and progress, technology assets can be better utilized, and the leadership team less siloed. Not really a bad deal, if you think about it.
CUES School of IT Leadership™
GonzoBankers Butch Leonardson and Steve Williams will be presenting at the CUES School of IT LeadershipTM Sept. 27-29 in Charleston, S.C.
Current and future credit union CIOs and executive teams won’t want to miss this opportunity to explore ways to guide their IT organizations’ direction and spending. Attendees will leave with a Strategic IT Action Plan designed to take their CU’s ITO further.