Evaluating Business Intelligence Options Here are several questions to consider when evaluating the technology used for reporting and monitoring data insights: • Is it easy to use, or must staff be technically well-versed in order to use it? Ease of use is a must, particularly in banks with limited staff and bandwidth. Look for a solution with a natural language slant — one that uses straightforward data field names and keywords to generate data insights. Included artificial intelligence (AI) capabilities allow the data solution to learn a user’s interest in certain types of data insights and can suggest bank data analytics based on that user’s patterns. • Is the majority of your institution’s data housed in the solution or data platform? Will you have the option to bring in other data sources to get a fuller, bigger picture, or are insights constrained by the limited data housed with the provider? • Are the insights derived from the tool reflective of up-to-date or real-time data? Historical data serves a purpose and can tell a financial Institution where they have been and how they have historically performed (e.g., in CECL calculations and loan performance), but stale information is not the best to use for strategic planning. A solution that can provide insights based on the most recent available data that you can provide is better. • Does the solution provide dynamic insights? Is there a drill-down feature to gain a more granular understanding of the data? For example, in analyzing a loan portfolio, can you easily and quickly drill down into a geographic concentration, then further identify the most significant loan type, and then further, the FICO score distribution within that loan type and within that geography? This allows for immediate insight to make better decisions as well as reporting to your board of directors on how to move forward with the loan portfolio focus. Using technology to access in minutes what might have previously taken you hours or days to gather fosters nimble decision-making. • Does the solution provide dashboards customized to specific groups within the financial institution (e.g., a lender performance dashboard that automatically updates as the financial institution uploads its data)? • In addition to reports, does the solution have the ability to monitor and alert staff when actual data metrics within the financial institution fall out of range with policy thresholds, minimum/ maximum KPIs, concentration or other limits set? • Does the solution provide access to peer and industry data for creating visual comparisons and providing loan decisioning insights? • Finally, does the solution provide quick and easy options for accessing the data (e.g., emailing, uploading to other documents, creating pdfs and presentation features that allow for direct presentation to management and board groups)? A business intelligence solution that transforms the financial institution’s raw data into the insights leaders need without expensive data scientists or complex technical infrastructure supports timely strategic decisions. How is your strategy working out based on your performance? Finally, banks should monitor performance against strategy using the reports and insights identified above at least quarterly. Findings should be reported to the board of directors at least quarterly, too. This periodic monitoring can provide the understanding necessary to regroup if falling behind on your strategy or to consider whether a strategy change is needed. Data-Driven Strategies in Changing Times Effectively planning for a financial institution’s growth, risks, and regulatory exams or reporting depends on quality data and analysis. The importance of data-driven strategies is magnified when circumstances are changing or are bound to change (such as with the eventual shift from higher interest rates to decreasing interest rates). However, many financial institutions, especially smaller banks, lack BI or business intelligence staff and complex technical infrastructures associated with “big data” options. Nevertheless, financial institutions of all sizes can execute plans developed using data (much of it already in their various systems) by identifying the relevant information, utilizing the right technology, and periodically comparing performance with strategic goals. Paula S. King, CPA, is Senior Advisor for Abrigo Advisory Services, assisting financial institutions with CECL, credit processes, model validations, and recently, the SBA’s Paycheck Protection Program forgiveness process. A former banker and bank co-founder, she has held executive positions (CFO, Chief Risk Officer and Chief Compliance Officer) and has more than 25 years’ experience across all aspects of banking including financial and asset/liability management, credit, services and product development and director responsibilities. 3 14 NEBRASKA INDEPENDENT BANKER
RkJQdWJsaXNoZXIy MTg3NDExNQ==