Data Driven Insight: The Power of Business Analytics
 

Data Driven Insight: The Power of Business Analytics

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Even with the economic success of the financial industry, there will be challenges credit unions will face. With the use of business analytics and intelligence, your credit union will have a ...

Even with the economic success of the financial industry, there will be challenges credit unions will face. With the use of business analytics and intelligence, your credit union will have a framework for tackling these challenges that will help with developing insights on business performance using statistical methods. So, what results should credit unions expect with the use of analytics? According to a recent survey, business analytics has been proven to reduce costs, increase profitability, improve risk and optimize internal processes for businesses. In this presentation, you will learn how to use business analytics and how the insight it provides will benefit your credit union today and in the future. For more info: www.nafcu.org/sas

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Data Driven Insight: The Power of Business Analytics Data Driven Insight: The Power of Business Analytics Document Transcript

  • Data-Driven Insight: The Power of Business Analytics David M. Wallace Global Financial Services Marketing Manager SAS Copyright © 2011, SAS Institute Inc. All rights reserved. Agenda  Introduction: The Economy and Credit Unions  The Case for Business Analytics  Succeeding with Business Analytics  Getting Started with Business Analytics 2 Copyright © 2011, SAS Institute Inc. All rights reserved. The Economy: Where Are We Heading? 2.3% 2.0% Source: The Wall Street Journal, Economic Forecasting Survey, June 2012. n = 53 3 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 1
  • The Economy: Where Are We Heading? .85% 7.9% Source: The Wall Street Journal, Economic Forecasting Survey, June 2012. n = 53 4 Copyright © 2011, SAS Institute Inc. All rights reserved. Credit Unions: Where Are We Now? Q1 Loan Originations Up 24.7% to $72.5B Credit Unions First Mortgage Market Share 3rd at 8.2% Core Deposits Growing at Double Digit Pace 1 Source: Callahan & Associates, 1st Quarter Trendwatch, May 2012 1 Regular shares up 11.9%; share drafts up 16.2% YTD 2012 vs. 2011 5 Copyright © 2011, SAS Institute Inc. All rights reserved. Credit Union Challenges  Regulatory requirements  Risk management and fraud prevention  Changing member preferences  Financially stressed member base  Consistency of member experience  Improving operational efficiency Source: Nicole Sturgill, CEB TowerGroup, May 2012 6 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 2
  • Member Experience is Priority One Source: Forrester Research, The Customer Experience Index, 2012, January 2012 7 Copyright © 2011, SAS Institute Inc. All rights reserved. Measuring Member Experience Source: Forrester Research, The Customer Experience Index, 2012, January 2012 8 Copyright © 2011, SAS Institute Inc. All rights reserved. Forrester Customer Satisfaction Index – Good News for Credit Unions! CXi Score USAA (bank) 89 USAA (credit card provider) 84 Any other credit union* 83 USAA (insurance provider) 83 Any other regional or local bank 80 Morgan Stanley Smith Barney 77 ING Direct 77 BB&T 77 Discover 77 Fifth Third Bank 77 70 75 80 85 90 Source: Forrester Research, The Customer Experience Index, 2012, January 2012 * No specific credit unions were identified in survey 9 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 3
  • The Case for Business Analytics 10 Copyright © 2011, SAS Institute Inc. All rights reserved. Defining Business Analytics “…the broad use of data and quantitative analysis for decision-making within organizations. It encompasses query and reporting, but aspires to greater levels of mathematical sophistication. It includes analytics, of course, but involves harnessing them to meet defined business objectives. Business analytics empowers people in the organization to make better decisions, improve processes and achieve desired outcomes. It brings together the best of data management, analytic methods, and the presentation of results—all in a closed-loop cycle for continuous learning and improvement.” Source: Thomas H. Davenport, The New World of Business Analytics, March, 2010 11 Copyright © 2011, SAS Institute Inc. All rights reserved. What Exactly is Business Analytics and How Can It Help? “Business analytics is, simply put, the application of analytical techniques to resolve business issues. It provides organizations with a framework for decision making, helping organizations solve complex business problems, improve performance, drive sustainable growth through innovation, anticipate and plan for change while managing and balancing risk.” “If you break it down it’s all about enabling effective decision making.” Source: Jim Davis, Business analytics: helping you put an informed foot forward, April, 2010 12 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 4
  • 5 Stages of Analytical Maturity Source: Thomas H. Davenport, Competing on Analytics 13 Copyright © 2011, SAS Institute Inc. All rights reserved. Business Analytics vs. Business Intelligence Business Intelligence Business Analytics 14 Copyright © 2011, SAS Institute Inc. All rights reserved. Business Analytics vs. Business Intelligence Business Intelligence Business Analytics What happened? What will happen next? 15 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 5
  • Business Analytics vs. Business Intelligence Business Intelligence Business Analytics What happened? What will happen next? Reactive Decision Making Proactive Decision Making 16 Copyright © 2011, SAS Institute Inc. All rights reserved. Companies are looking to business analytics to help solve big issues Source: Bloomberg Business Week, The Current State of Business Analytics: Where Do We Go From Here? August 2011. n = 930. 17 Copyright © 2011, SAS Institute Inc. All rights reserved. Which of the following would you consider to be business analytics capabilities/tools? Source: Bloomberg Business Week, The Current State of Business Analytics: Where Do We Go From Here? August 2011. n = 930. 18 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 6
  • Which of the following describes the use of business analytics across your organization? Source: Bloomberg Business Week, The Current State of Business Analytics: Where Do We Go From Here? August 2011. n = 930. 19 Copyright © 2011, SAS Institute Inc. All rights reserved. Companies are still turning the corner on analytics investments Source: Bloomberg Business Week, The Current State of Business Analytics: Where Do We Go From Here? August 2011. n = 930. 20 Copyright © 2011, SAS Institute Inc. All rights reserved. Business Analytics Functions and Tools Functions Very Effective Users Other Companies Strategy/Planning 78% 55% Finance 69% 49% Marketing 68% 48% Sales 64% 44% Information Technology/Management 64% 48% Operations/Supply Chain Management 60% 41% Product Development 57% 34% Customer Service/Support 54% 37% Human Resources 40% 29% Tools Very Effective Users Other Companies Spreadsheets 74% 59% Business reporting/KPIs/dashboards 72% 52% Forecasting 71% 50% Query and Analysis 57% 35% General statistics  53% 37% Data/Text Mining 50% 36% Simulations and scenario development 46% 27% Model management 43% 24% Optimization 43% 24% Web analytics 34% 23% Interactive data visualization 31% 15% Social media analytics 22% 21% Text/audio/video analytics 16% 12% None of the above 1% 2% Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930. 21 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 7
  • Business Analytics Reliance and Effectiveness Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930. 22 Copyright © 2011, SAS Institute Inc. All rights reserved. Ready Access to Data and Analytics Tools Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930. 23 Copyright © 2011, SAS Institute Inc. All rights reserved. Executive Buy-in and Positive Impact Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930. 24 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 8
  • The What and the How Succeeding with Business Analytics 25 Copyright © 2011, SAS Institute Inc. All rights reserved. Managing and Integrating Data  What – data from core and operational systems  FIS, Fiserv, Harland, Jack Henry, Open Solutions, etc.  The gap  Repository needed to assemble/integrate data for BI, reporting and analytics  How – use pre-built industry data model as repository of key data from core systems  Use as integration hub for analytics and reporting  Included data integration/data quality tools for reliable data 26 Copyright © 2011, SAS Institute Inc. All rights reserved. Industry Data Model Analytical Financial Financial Financial Banking Insurance Customer Models & Products Instruments Accounts Accounts Accounts Intelligence Scoring SAS Detail Data Store for Banking – Single Version of the Truth Risk Factors Operational Financial Financial Risk Financial Risk Factors Market Data & Model Loss Events Parties Reporting Mitigants Positions & Models & Quotes Assessment 27 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 9
  • Integrating Data for Analytics and Reporting 28 Copyright © 2011, SAS Institute Inc. All rights reserved. Executive Dashboard 29 Copyright © 2011, SAS Institute Inc. All rights reserved. Growing Members & Member Relationships  What – need to grow and retain members; grow member relationships  The Gap – which members, what channel(s), gathering non-members  How – evolving to analytically driven marketing  More relationships with current members  Reach through multiple channels  Members  your advocates through social media  New members 30 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 10
  • Evolution of Financial Services Marketing Expectation Expectation Deliver a consistent Integrated, multi- positive member channel in/outbound experience across conversations in real- the credit union time The Marketing Campaign The The Member Brand Experience Responsibilities Expectation Sustain brand health in a rapidly Insights changing virtual world and Analytics Expectation Unearth and dynamically manage insights to drive action 31 Copyright © 2011, SAS Institute Inc. All rights reserved. Financial Services Marketing Best Practices Strategic Segmentation Campaign Execution  Analytical and Operational  Collaborative Marketing Profiling  Channel Coordination  Predictive and Analytical Modeling  Coordinate Inbound and Outbound Marketing  Member State Changes  Decision Optimization  Event Triggering  Marketing Campaign  Real-Time Decisioning Optimization Source: BAI Research, The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives, April 2012 32 Copyright © 2011, SAS Institute Inc. All rights reserved. Segmentation: Starting Point for the Member Engagement Strategy Member Segmentation Drives Initiatives Enables Member Insight Capabilities 33 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 11
  • Driving Results Through Segmentation Who are our targeted member groups? What are their key Which treatments characteristics & offers to present Member Strategy value to each segment? propositions? Who are our most valuable member segments? Key Outputs • Differentiate members based on segments • Segment treatment strategies • Marketing optimization (based on resources) 34 Copyright © 2011, SAS Institute Inc. All rights reserved. Refreshing Member Segmentation Member Data Sources Existing Member Existing Member Existing Member Segment 1 Segment 2 Segment 3 Analytical Segmentation Marginalized Disengaged Satisfied Sophisticated Struggling Middles Skeptics Traditionalists Opportunists Techies Campaigns, Offers, Interactions Segment names from: BAI Research, The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives, April 2012. 35 Copyright © 2011, SAS Institute Inc. All rights reserved. Member Insight Analytics 36 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 12
  • Improving Member Experience  What – monitor behavior on CU web sites; monitor comments from social media  The gap – internal & external data needs to be integrated to get true picture of member experience  The how – customer experience analytics; social media analytics 37 Copyright © 2011, SAS Institute Inc. All rights reserved. Customer Experience Analytics 38 Copyright © 2011, SAS Institute Inc. All rights reserved. Social Media Key Performance Indicators Ways to filter data Historic volume reports with sentiment Hashtag listing (sort by columns) Detailed Sentiment by Type, Source, and Site. Data is compared against historical trend lines, using statistical rules and predefined business rules to understand if the movement is significant and relevant to the business. Top Sites by volume (sort by type) Drill to document detail is available throughout this portal. 39 SAS Proprietary & Confidential Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 13
  • Real Time Twitter Analysis Intra-day volume reports with sentiment Multiple tabs for each unique Twitter query Tweet Report (sort by columns) Real Time look into Twitterverse “buzz” around a certain topic 40 Signifies Twitter handle SAS Proprietary & Confidential Copyright © 2011, SAS Institute Inc. All rights reserved. Analyzing Credit Union Performance  What – bringing data together for KPIs and dashboards; doing advanced analytical analysis  The gap – how to get started?  The how –CU dashboard, office analytics, rapid predictive modeler 41 Copyright © 2011, SAS Institute Inc. All rights reserved. Office Analytics 42 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 14
  • Predictive Modeling for Business Analysts 43 Copyright © 2011, SAS Institute Inc. All rights reserved. Credit Union Dashboards 44 Copyright © 2011, SAS Institute Inc. All rights reserved. Credit Union Dashboards 45 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 15
  • Credit Union Dashboards 46 Copyright © 2011, SAS Institute Inc. All rights reserved. Getting Started with Business Analytics 47 Copyright © 2011, SAS Institute Inc. All rights reserved. 10 Practical Steps for Making Analytics Work 1. Expand the use of business 6. Deploy the necessary analytics where feasible. analytical technology. 2. Integrate analytics across 7. Develop formal data- the organization. management processes. 3. Deploy analytics on specific 8. Secure executive support. business tasks. 9. Deliver and communicate 4. Use a variety of analytics value. tools, including more sophisticated ones. 10. Hire and develop the right analytical talent. 5. Create a data-management strategy that includes ready access to data. Source: Bloomberg Business Week, Making Business Analytics Work: Lessons from Effective Analytics Users, May 2012. n = 930. 48 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 16
  • Establishing a Solid Foundation for Analytics  Get executive buy-in  Essential to success  Use a pilot to demonstrate the benefits  Establish an analytics culture  Show skeptics how analytics translates to business decisions  Tie analytical outcomes to strategic business issues  Identify your analytical talent  Who can pose analytical questions?  Who has the desire to move from “amateur” to “semi-pro”  Tap into the right tools Source: IT Business Edge, You’re Never Too Small for Business Analytics, September 2011 49 Copyright © 2011, SAS Institute Inc. All rights reserved. 4 Keys to Analytical Talent 1. Put talent before technology  Maximize analytics tool investments by getting talent in place first 2. Emphasize “soft” skills in addition to technical skills  Critical thinking and problem solving capabilities  “ability to deal with the world through an analytical lens” 3. Invest in ongoing staff development  Training existing employees  creating a fact-based decision culture 4. Be creative when looking outside for new talent  Go beyond traditional areas (examples: engineering, math)  Partner with local universities; tap provider resources Source: Bank Systems & Technology, 4 Keys to Building an Analytical Workforce, February 2012 50 Copyright © 2011, SAS Institute Inc. All rights reserved. What to look for in a business analytics solution  Robust visualization  Support for advanced analytics  Prebuilt analytical models and task support  Suited for range of users  Ease of use  Balance of user autonomy and IT control  Modular  Fully integrated  Availability of training and technical support  Low total cost of ownership Source: IT Business Edge, You’re Never Too Small for Business Analytics, September 2011 51 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 17
  • In Summary 52 Copyright © 2011, SAS Institute Inc. All rights reserved. Thank You! David.M.Wallace@sas.com Copyright © 2011, SAS Institute Inc. All rights reserved. Resources  Business analytics: helping you put an informed foot forward (included in Business Analytics Insights). Jim Davis. Available from SAS*.  The New World of Business Analytics. Thomas H. Davenport. Available from SAS*.  The Current State of Business Analytics: Where Do We Go From Here? Bloomberg Business Week. Available from SAS*.  Making Business Analytics Work: Lessons from Effective Analytics Users. Bloomberg Business Week. Available from SAS*.  The New Dynamics of Consumer Banking Relationships: Segment-Driven Perspectives. BAI Research. Available from SAS*.  Driving Profitable Growth for Marketers series. Available from SAS*.  Part One – The Thought Leader Perspective  Part Two – The Practitioner Perspective  Part Three – Technologies Available to Marketers  Part Four – Best Practices and Lessons Learned from Marketers  4 Keys to Building an Analytical Workforce. Bank Systems & Technology, February 2012.  Fuel Marketing Effectiveness with Customer Analytics. Available from SAS*.  Getting Your Money’s Worth with Analytics. Available from SAS*.  Redefining Customer Value: Corporate Strategies for the Social Web. Economist Intelligence Unit. Available from SAS*.  Five Ways to Drive More Profitable Marketing. Available from SAS*.  You’re Never Too Small for Business Analytics. IT Business Edge. Available from SAS*.  Big Data Meets Big Data Analytics. Available from SAS*.  Banking on Analytics: How High-Performance Analytics Tackle Big Data Challenges in Banking. Available from SAS*.  The Power of Personalizing the Customer Experience. Available from SAS*.  Analytics 101. Available from SAS*. * Free registration 54 Copyright © 2011, SAS Institute Inc. All rights reserved.Copyright © 2012, SAS Institute Inc. All rights reserved. 18