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Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
Busienss intelligence in banking sector
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Busienss intelligence in banking sector

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  • 1. Business intelligence and Data warehousing <ul><li>Business Intelligence in Banking sector </li></ul><ul><li>Naveen Gupta 09BM8033 </li></ul><ul><li>Vipin Dutt 09BM8091 </li></ul>
  • 2. The KPI in retail banking <ul><li>The KPI in retail banking may include the factors that have links to the performance of a retail bank. </li></ul><ul><li>There may be several KPI to measure the performance. However, it is important to keep the number of KPI to a minimum and to choose KPI's that have direct attributes to its performance. </li></ul>
  • 3. The KPI in retail banking <ul><li>The total cash deposits held in a month </li></ul><ul><li>The average annual deposits held </li></ul><ul><li>Average number of depositors per retail bank branch </li></ul><ul><li>Average withdrawals made by each depositor </li></ul><ul><li>Ratio of active depositor to dormant depositor </li></ul><ul><li>Average number of default borrowers in a year </li></ul><ul><li>Average number of credit cards issued by the retail bank </li></ul><ul><li>Rate of borrowing risk </li></ul><ul><li>Rate of default risk </li></ul><ul><li>Average number of customers served in a day </li></ul><ul><li>Average number of closed bank accounts </li></ul>
  • 4. Performance measure for banking sector <ul><li>CAMEL Model </li></ul><ul><li>CAR Ratio </li></ul><ul><ul><li>Measure of bank capital as a % of risk weighted credit exposure </li></ul></ul><ul><ul><li>RBI norms: CAR 8% </li></ul></ul><ul><li>Asset quality </li></ul><ul><ul><li>Net NPA to Net Advances </li></ul></ul><ul><ul><li>Total NPA to Total assets </li></ul></ul><ul><li>Management </li></ul><ul><ul><li>Profit/Business per employee </li></ul></ul><ul><li>Earning </li></ul><ul><ul><li>Return on asset </li></ul></ul><ul><ul><li>Net interest income to total asset </li></ul></ul><ul><li>Liquidity </li></ul>
  • 5. Need of business intelligence and Data warehousing <ul><li>Risk Management </li></ul><ul><li>Probability of loan default and expected recovery of loan default – Important for loan pricing </li></ul><ul><li>Credit cards early detection and prevention of frauds </li></ul><ul><li>Analyzing credit portfolios, enabling banks to quickly identify potential delinquency cases </li></ul><ul><li>  Determine overall financial health </li></ul><ul><li>Information about volatility in current economic environment </li></ul><ul><li>Accurately estimating the risk of customer loans based on: The financial assets and earning capacity of the borrower </li></ul><ul><li>The prevailing economic climate </li></ul>
  • 6. Contd… <ul><li>Improve operational efficiencies and boost profit </li></ul><ul><li>Generate massive internal efficiencies (eg: analyzing the performance of sales personnel, tellers and account managers) </li></ul><ul><li>Track individual revenue streams to determine profitable and non-profitable services and products </li></ul><ul><li>Understand growth patterns to maximize the chance of repeatability </li></ul><ul><li>Set key benchmarks for crucial metrics such as the number of net new customers and their profitability, compare them against industry standards, and track them towards defined goals </li></ul>
  • 7. Contd… <ul><li>Customer segmentation </li></ul><ul><li>Required to defined profitability amount of service and attention to be provided to customer </li></ul><ul><li>Better understand customer needs and sentiments regarding banking </li></ul><ul><li>Effective tailored product and services to a segment </li></ul><ul><li>Effective customer profiling according to the segment </li></ul><ul><li>  Determine profitability across branches and products </li></ul><ul><li>Identify and develop new cross-sell and up-sell opportunities and marketing campaigns accordingly </li></ul>
  • 8. Contd… <ul><li>Pushing new product to existing customers </li></ul><ul><li>Need to maximize profit by cross selling and upselling of product to existing customers </li></ul><ul><li>Cost of selling product to existing customer is five times lower than selling to new customer </li></ul><ul><li>Improve customer relationship and customer loyalty </li></ul><ul><li>Effectively and efficiently satisfy customer needs and demands </li></ul><ul><li>Their latent needs have to be gauged and then should be approached with relevant product </li></ul>
  • 9. Contd… <ul><li>Securing Existing client / Reducing churn rate </li></ul><ul><li>Utmost attention to maintain customer relationship and </li></ul><ul><li>Uncovering the reasons behind customers switching to a competing institution </li></ul><ul><li>Tracking changes in customer behavior so products of services can be tailored accordingly </li></ul><ul><li>Segregate customers into the baskets and focus on the needs of most profitable customers </li></ul>
  • 10. Contd.. <ul><li>Regulatory requirement </li></ul><ul><li>Regulatory requirements indicated by the RBI for preparation of Off-site Monitoring Surveillance (OSMOS) Reports on a regular basis in electronic format </li></ul><ul><li>Asset Liability Management (ALM) guidelines for banks being implemented by the RBI w.e.f. April 1, 1999 </li></ul><ul><li>Regulatory requirement of filing of statutory returns such as the one under Section 42 of the Reserve Bank of India Act, 1934 </li></ul><ul><li>Need for timely submission of Balance Sheets and Profit & Loss Accounts </li></ul><ul><li>Need for Inter-Branch Reconciliation of Accounts within a definite time frame </li></ul>
  • 11. Role of Business Intelligence <ul><li>Provide tools that can be used to understand customer behavior </li></ul><ul><li>Efficiently coupled business strategies with the IT infrastructure and skills </li></ul><ul><li>Can collect and transform millions or record/transaction for analysis </li></ul><ul><li>Support strategic goals of gaining competitive advantage </li></ul><ul><li>Gives and ensure bright prospect for the future </li></ul><ul><li>Efficiently customers needs </li></ul><ul><li>Gain advantage over competitors </li></ul><ul><li>Fulfills the regulatory requirements </li></ul>
  • 12.  
  • 13. Fact table for all accounts
  • 14. Multivalued Dimensions
  • 15. Arbitrary Band value reporting
  • 16. Point in time balance
  • 17. Heterogeneous product : Specific line of business schema
  • 18. Examples <ul><li>Bank of India </li></ul><ul><li>Faster time-to-market thus making the Bank of India 'Business Agile' </li></ul><ul><li>Enabled BOI's focus on core business activities </li></ul><ul><li>Reduction in the Total Cost of Ownership (TCO) of the project and a high level of predictability on future cash flows </li></ul><ul><li>Increased productivity, standardization, consistent service levels and customer experience </li></ul>
  • 19. Examples contd… <ul><li>ICICI Bank </li></ul><ul><li>Establish business intelligence market leadership in the fast-growing Indian financial market </li></ul><ul><li>Develop tailored marketing campaigns that have boosted customer acquisition rates significantly </li></ul><ul><li>Helped the bank optimize its delivery channels across 400 shop fronts, 1,600-plus ATMs, multiple call centers and Internet banking services </li></ul><ul><li>Non-branch transactions have grown from 5 per cent to 50 per cent of all transactions in a two-year period, representing an important revenue source for the bank </li></ul>
  • 20. <ul><li>Thank You </li></ul>

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