Finance, IT, and Risk leaders know they must embrace innovative solutions to remain competitive and drive enterprise value creation. But “innovation” doesn’t have to come at a high cost to your budget or bandwidth. Rather, the key to making the leap to the next level in the transformation journey lies in one of the most valuable assets every organization has: its data.
When properly managed and analyzed, data unlocks insights that enable informed decision-making, process efficiencies, and strategic planning. Looking to cost-effectively modernize operations with minimal lead time?
Look no further than business intelligence (BI) solutions.
Order Matters: The Urgency of BI Right Now
The power and allure of AI is undeniable, but diving headfirst into artificial intelligence (AI) initiatives can be costly and time-consuming. So much so, that 30% of GenAI projects will be abandoned after the proof-of-concept stage by 2025. Leaders are recalibrating their approach to AI to better estimate and demonstrate value before dedicating large investments. Furthermore, 63% of IT leaders “regret not choosing technologies more carefully.”
AI often demands substantial investment in development and training before yielding tangible results, and even then, outcomes might not always be accurate or positive. This is especially true for financial institutions, which already face the challenge of managing, accessing, and analyzing vast amounts of data.
Before investing in AI, financial institutions should first establish a solid data management strategy and implement a robust automated BI process. This foundation will set the stage for future AI investments.
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Financial BI Use Cases to Explore
While many companies are still in the early stages of adopting analytical and automation tools for enhanced BI capabilities, those that have done so effectively are already seeing significant benefits. In fact, through 2032, the financial services sector is expected to be the fastest-growing BI market due to financial institutions’ ability to consistently implement BI to improve operations and enable real-time problem resolution.
Two of the most commonly adopted BI products, Power BI and Power Automate, come with a Microsoft 365 subscription, which means there are no additional costs and the tools integrate seamlessly with existing architectures and Microsoft products. Financial institutions have successfully leveraged these tools to transform their operations in a number of critical ways, including:
- Identifying inefficiencies and bottlenecks: Banks can discover their loan approval process is taking longer than industry standards in Power BI by visualizing loan approval data, allowing bank analysts to pinpoint delays and leverage Power Automate to streamline and optimize the process. For example, automating the initial loan application review can significantly reduce processing times and improve customer satisfaction.
- Automating report distribution: Power Automate can be used to schedule and distribute reports generated in Power BI, ensuring stakeholders receive up-to-date information without manual intervention. A financial analyst can set up a workflow to automatically send a weekly performance report to senior management, allowing decision-makers to always have the latest data at their fingertips.
- Triggering automated tasks: Organizations can set thresholds within Power BI that trigger automated tasks using Power Automate. For instance, if a particular financial metric, such as the capital adequacy ratio, falls below a certain threshold, Power Automate can trigger an alert to the risk management team, initiate a workflow to review and address the issue, and even generate a report detailing the potential impacts and recommended actions.
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Future Trends and Opportunities
As technologies and market demands evolve, financial institutions will have continuous opportunities to innovate and mature their data infrastructure. In addition to BI, here are some key areas to watch:
- Integration with AI: As organizations become more proficient with BI tools, they’re better positioned to integrate AI to further enhance analytics capabilities. Microsoft’s CoPilot, a suite of AI-powered tools, can be integrated with Power BI and Power Automate to provide deeper insights and more advanced automation capabilities, including predictive analytics, natural language processing for querying data, and intelligent automation workflows that learn and adapt over time.
- Enhanced regulatory compliance: With the increasing adoption of BI and AI tools, ensuring robust regulatory compliance is more critical than ever. Organizations must prioritize maintaining data quality, accuracy, and adherence to regulatory standards. In the future, the regulatory focus will likely shift toward developing advanced internal compliance frameworks that integrate with BI and AI technologies. These frameworks will automate compliance checks, establish comprehensive audit trails, and ensure all processes align with regulatory requirements. To achieve this, banks could leverage Power BI to automatically extract and transform trade data into the required Trade Reporting and Compliance Engine (TRACE) reporting format and then use Power Automate to automatically submit these reports to the Financial Industry Regulatory Authority (FINRA) within the mandated deadlines. This proactive approach aims to effectively mitigate the risk of non-compliance and associated penalties.
- Real-time data processing: The future will see a greater emphasis on real-time data processing and decision-making. Financial institutions increasingly need to make instantaneous decisions based on current market conditions, customer activities, and regulatory changes. Advanced BI tools, combined with AI and machine learning algorithms, will enable organizations to process and analyze data in real time, offering a significant competitive edge.
Becoming Innovation Ready
While AI continues to capture widespread attention, it’s crucial to first establish a strong foundation with BI. By mastering BI, financial institutions can unlock the full potential of their data, driving operational efficiency, enhancing decision-making, and setting the stage for future innovations.
To make progress on your data and analytics journey using BI and other advanced capabilities, contact CrossCountry Consulting.