Today's Management Information Problems in Banking

Introduction

For the past decade banks have focused on progressively rebuilding operational systems, but most have problems with old and new systems that lack integration. They are now faced with unprecedented demands, both from management and regulators, not only to deliver more information, but to demonstrate tight control over internal processes.

Business Intelligence This presents major challenges, with most of their vendors merely supplying bolt-on modules to existing applications and systems integrators delivering solutions which are very expensive and slow to implement.

As a result, many bank IT departments have become adept at extracting data from different sources and re-presenting the combined information using spreadsheets.

This has often led to "Excel hell", causing significant concerns about the integrity of data which is often used to make critical decisions. This approach also does not satisfy bank auditors and regulators as the audit trails are poor or non-existent. Huma Business Intelligence products address the demand for sophisticated, real-time management information within the banking sector. This is needed not only for strategic purposes, but is required to comply with increasingly complex operational and financial regulation.

What are Today's Problems?

Many operational banking systems do not make it easy to report on operational data. Typical problems are:

Reporting is often not centrally planned, but developed ad-hoc to meet individual department or staff needs.
Many different tools are often used to extract data e.g. Access and Excel. For Midas clients, this also includes IBM Query, Midas/Q and Optical Reporting Facility (ORF)
In addition, there can be many one-off solutions for specific purposes e.g. reconciliation, regulatory and compliance reporting etc.

There are often multiple databases and multiple spreadsheets across all bank departments, maintained by many staff. These are often very complex with databases feeding spreadsheets, which then feed more spreadsheets etc. This can mean significant operational risk
Many different extracts are difficult to audit and difficult to maintain or change to meet new requirements.
Banks need to keep staff skilled in all these different tools, solutions, databases and spreadsheets. This can be a significant cost and an operational risk as often such knowledge is only in one or two staff. When staff leave, often the knowledge goes with them.
Much redundancy, with many reports produced but no longer used.
Cost to ensure all these reports still work when source systems are upgraded or changed
Analysis is mainly done with Excel, leading to similar problems e.g. no audit trail, no "single version of the truth", many unmanaged end-user applications etc.

What's changed recently to make Business Intelligence more achievable and affordable?

Memory is plentiful and cheap - huge amounts of data can now be analysed in real-time.
Data management software and tools are now much cheaper.
Business Intelligence software is more sophisticated and usable.
An Intranet is in place for internal web-based distribution and analysis.

So it is now possible to build a Business Intelligence solution at reasonable cost. Huma Business Intelligence can offer such solutions to banks.

What are the challenges providing Business Intelligence to banks?

The amount of financial and operational data in a bank is huge. The data is usually inconsistent across systems and is always difficult to access and understand.

Transforming this data into useful information is a complex and painstaking process. This means:

analysing business and data requirements.
building a data model to support the business requirements.
mapping source system data to the data model.
writing code to read, transform and join the source data. The key word is ‘transform’ as considerable work can be needed to transform it from a transaction processing system to be suitable for a management information system.
building the processes to access the source data and load a data repository.
building the processes to access the data repository and present this information to users to allow them to quickly and easily use it.

How have Huma BI created their Products?

Huma BI has spent considerable time meeting these challenges by performing the tasks above and engineering their products. This meant:

First designing a generic banking data model.
Then building the product components using the latest database technology together with the highest performing OLAP technology.

Many BI companies talk about what could be done with banking data but considerable work would then be required to perform detailed analysis, extract & transform data and create a solution.

With Huma BI, this work has been done - solutions exist and are live at clients.