BUSINESS INTELLIGENCE IN FINANCIAL SERVICES

BY: NAVLY AGRAWAL ENROLL: 10810037

Abstract
Banking, financial services and insurance industries are sophisticated and complex. These industries are subject to significant regulation and they generate mountains of data. For the enterprise that participates in one or more of these markets, it can be difficult to stay abreast of changes in the market, changes in competition, and customer and regulatory changes. The paper discusses how Financial Sector Companies have integrated Business Intelligence into their daily operations, giving more autonomy to every collaborator by using performance management tools and best practices. In other words, driving the democratisation of Business Intelligence. It presents much more than just business direction, it provides strategic support for every business performance objective.

Introduction
Business intelligence, or BI, is an umbrella term that refers to a variety of software applications used to analyze an organizations raw data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting. Companies use BI to improve decision making, cut costs and identify new business opportunities. BI is more than just corporate reporting and more than a set of tools to coax data out of enterprise systems. CIOs use BI to identify inefficient business processes that are ripe for re-engineering.

With todays BI tools, business folks can jump in and start analyzing data themselves, rather than wait for IT to run complex reports. This democratization of information access helps users back up with hard numbers business decisions that would otherwise be based only on gut feelings and anecdotes. Although BI holds great promise, implementations can be dogged by technical and cultural challenges. Executives have to ensure that the data feeding BI applications is clean and consistent so that users trust it.

Bi in financial Services INDUSTRY OVERVIEW Today's banking, finance, and investment companies operate in an industry more diverse and unpredictable than any other. Through mergers, acquisitions, partnerships, and internal growth, financial institutions are racing to gain a competitive edge by entering new business areas and delivering more products and services. BUSINESS REQUIREMENTS Financial Service businesses such as banks handle very large volumes of transactional data on a daily basis. E-business, retention and analysis of detailed electronic records are driving rapid expansion in the scale of data warehouse and BI solutions, with most companies measuring performance based on financial results for each line of business. Hence, focus is on making incremental improvements in each aspect of the business: Fraud and Risk Management - Consolidating operational information is a common BI solution to provide high performance data integration and a single, consistent data environment for all departments. This provides a sound basis for real time fraud management and early stage profitability analysis. Marketing & Profitability - Customer segmentation needs can be finely tuned using

behavioural analysis, with effective micro-segmentation also supporting the ability analyze the

effectiveness and costs of sales channels used in the business. BI establishes a more sophisticated view, substantiated with data and analysis, of customers and sales channels. Performance Management - BI is effective at improving efficiency, reducing costs and having a single reporting and analysis platform for all credit, market, and operational risk information. Financial Reporting - accurate timely data, efficient business planning and consolidation provides greater confidence and reliable results.

Many Financial Services organizations are introducing self-service reporting delivered through personalized interfaces via an Intranet. The ability to personalize information delivery is critical to ensuring that each role is able to meet their specific needs. The overall BI architecture must support many different types of decision, from strategic to operational. A process approach can build firm foundations for information sharing, collaboration, and individual empowerment. Operational BI is supporting management by exception through messaging alerts and also offers the opportunity to increase efficiency via automation of routine decision making. Building strategic-level IBI infrastructures based on open standards is the best path towards total compliance solutions, especially as regulatory requirements are still evolving. Following the driving force of compliance to using BI for risk management other parts of the enterprise are recognizing the value of insights possible from analysis of enterprise level data. This has lead to: Data Certification - an innovative and cost-effective approach to data quality, certified for specific use across multiple layers of criteria, driven by data users Data Marts - used for pre-staging consolidated enterprise data in a format that enables easy and quick data joins for reports and analysis Enterprise Dashboards - displaying the activity and health of the organization on a real/daily/weekly basis Layered Reporting - enterprise dashboards, parameterized reports and the data marts

enable faster, more flexible and targeted analysis of problems and emerging market opportunities Data Centricity - realizing competitive advantage of rapid, flexible staging of data for analysis of the potential revenue impact and devise strategies to replace revenue. Interconnectivity - interconnectivity between the drivers forcing BI trends is spawning other trends. Information quality - driving master data management, data governance, regulatory compliance and enterprise data transparency. Enterprise level BI - driving SOA, actionable BI and semi-structured and unstructured data.

An example of BI software- COGNOS

With the ability to interact, search and assemble all perspectives of your business, Cognos Business Intelligence provides a limitless BI workspace to support how people think and work. It delivers the complete range of BI capabilities: query and reporting, analysis, dashboarding and scorecarding on a single, service-oriented architecture (SOA). And it expands traditional business intelligence (BI) with planning, scenario modeling, real-time monitoring, collaboration and predictive analytics, to extend your BI capabilities. Analysis Cognos analysis capabilities allows all users to explore information easily and intuitively to drive better, smarter business decisions. Dashboarding Cognos dashboard capabilities allow any user to access, interact and personalize content in a way that supports the unique way they make decisions. Scorecarding It helps executives and managers provide quantifiable goals and targets and allows them to track performance across business units, operating subsidiaries and geographic regions to quickly identify the areas that need attention. Real-time Monitoring It provides an organizations frontline employees with a rich view of operational KPIs and measures to support up-to the-moment decision making.

Statistics Cognos statistics capabilities, make it easy to incorporate statistical results with core business reporting, reducing the time it takes to analyze data and prepare business presentations based on that analysis. Extending make effective, fact-based decisions. Collaborative BI Collaboration capabilities within Cognos Business Intelligence facilitate decision-making for groups and teams. With this solution, users can build stronger relationships and learn from history with a centralized, searchable corporate memory. BI Empower users across your organization with the business intelligence (BI) they need to make to

Case studies
Situation The India Infoline (IIFL) group, comprising the holding company, India Infoline Limited and its subsidiaries, is one of the leading players in the Indian financial services space. While continued data growth is not surprising in general, it made us recognize that our current infrastructure was not able to handle this growth. Processing more than 1.5 million transactions a day and handling 14TB of data, was not only a strain on the business, it also brought a number of challenges; the most important being the handling and storage of this data. The key challenges included handling the large volumes of data during peak hours, and maintaining efficient transaction turnaround times without increasing storage exponentially. Solution To resolve the current challenges, IIFL decided to implement a Microsoft solution for its critical transaction processing, data warehousing, and business intelligence needs. The solution includes Microsoft SQL Server 2008 and Microsoft SQL Server 2008 Reporting Services (SSRS). We needed a system that could enhance performance and scalability as well as provide the business with capacity for growth and strong reliability, SQL Server 2008 not only provided

overwhelming processing capabilities but also met our needs for high availability, self-service reporting, and enhanced analysis capabilities. With the increase in the number of transactions at IIFL, the pressure on the database for processing these had increased considerably. Also there was an increased need to secure this data. With SQL Server 2008 this problem too was resolved. Built-in Data Compression and Backup Compression enabled IIFL to manage ever-increasing amounts of data. This in turn reduced data storage costs, enhanced query performance and helped to ensure optimal performance of mission-critical applications. SQL Server 2008 provided with cutting edge tools to create, analyze and model, share and manage business intelligence data in a secure and streamlined way. The storage capacity was increased and we could accept more information. The solution not only enabled us to store data more effectively, but also reduced the storage requirements for data. Today, nearly 14TB of data is running on SQL Server 2008. IIFL also saw expressed interest in Microsoft SQL Server 2008 Reporting Services, which gives employees more self-service analysis tools so they can easily create reports and share them across the company. It provided a complete, server-based platform designed to support a wide variety of reporting needs enabling IIFL to deliver relevant information wherever needed. IIFL is taking advantage of the many enhancements of SQL Server 2008. It enables it to maintain sub-second response time, which is a very critical requirement in its environment. Considering that IIFL is using SQL Server 2008 within its transaction cycle, this is a big advantage. Replication and Data Transformation using SQL Server 2008 Integration Services (SSIS) is also utilized by IIFL. Hundreds of transactions are being replicated every second, and hundreds of thousands of rows are imported and exported into different formats every day. Situation

Headquartered in India, with operations in United States, Singapore and Australia, Financial Technologies (India) Limited (FTIL), is the flagship company of the Financial Technologies Group, is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets . FTIL is focused on developing mission-critical technology solutions for the financial services industry and the facilitation of change within the financial marketplace.. FTIL has emerged as the preferred technology partner for deploying straight though processing (STP) technologies for the technology-intensive financial services sector. Financial Technologies revolutionized the Indian Electronic Trading scenario by introducing an end-to end STP solution that supports high-density transactions. Its solutions cater to the equity, FOREX, commodity and derivatives markets, covering all stages of a Trade Life Cycle PreTrade, Trade, and Post-Trade - to deliver single-point transaction fulfillment. Addressing the entire value chain of exchange solutions, FTIL decided to create a multiexchange, multi-segment front office securities trading platform for equities, derivatives, and commodities markets all on a single application. It wanted to offer real time connectivity to the exchange and back office system with faster inter-segment trading. With genesis in the technology solutions business, FTIL thought of developing an innovative technology product to ensure seamless operations. Solution To keep its commitment of being a pioneer in introducing end-to-end STP solutions, FTIL created ODIN, a multi-exchange, multi-currency front office trading and risk management system, which makes trading on multiple markets easier through the use of a single application. Based entirely on the Microsoft platform and built using Microsoft Visual C++ 2005, Microsoft SQL Server 2005, C#, Microsoft Messaging Service, IIS Server 7.0 and ASP.Net, ODIN demonstrates the level of customer satisfaction and business efficiency. Building the systems on Microsoft technologies enabled quick user adaptation as the user interface of Windows was very

familiar amongst users. The training time therefore required was very less. The installation and training both happened quickly and easily. FTIL used the Microsoft Foundation Classes (MFC) available with Visual C++ to have inmemory transactions, improving throughput and avoiding latency. The Microsoft Message Queuing technology was used so that it helps queuing in memory. The algorithm was built such that the information would go to the database only when necessary. FTIL in effect controls every message sent across the system.

Success factors Of Implementation

Before implementing a BI solution, it is worth taking different factors into consideration before proceeding. According to Kimball et al. These are the three critical areas that you need to assess within your organization before getting ready to do a BI project: 1. The level of commitment and sponsorship of the project from senior management 2. 3. The level of business need for creating a BI implementation The amount and quality of business data available.

Conclusion
The need for financial institutions to know their customers and demonstrate management control of every process is driving the implementation of strategic, enterprise-wide, integrated and endto-end BI solutions. BI roadmaps are including future requirements beyond current legislation, and addressingthe unique needs of different Organizations. In summary, there are no clear BI leaders in the Financial Services sector, with buyers needing range of options to get the best strategic fit. The solution generally includes a combination of vendors specializing in the Financial Services sector as well as established BI tools.