Business Intelligence and Business Process Management in Banking Operations Ph.D. Katarina urko, Ph.D. Mirjana Pejic Bach University of Zagreb, Faculty of Economics, Department of Business Computing
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[email protected] M.Sc. Goran Radoni Croatian Institute of Technology, Zagreb
[email protected] as ever, financial institutions must keep their focus on key success factors, primarily on customer satisfaction and loyalty. BI technology can collect and transform millions of records for comprehensive analysis and provide tools that bankers can and should use to understand the customer behaviors, to efficiently satisfy the customer needs and fulfill customer’s expectations, and, finally, to gain a competitive advantage over their competitors. Patterns in customer needs and habits are analyzed on sufficiently large sets of data. However, more the data, more difficult becomes their collection and processing into timely and relevant knowledge. If performed without adequate tools, this process often requires a lot of competence, and, ultimately, generates high costs and hardly measurable results. Implementation of BI systems in banking begins with collection, enhancement, and purification of the daily operations’ data from internal and external sources, including thirdparty organizations. Availability of “enhanced” data at low cost helps banks recognize and profit from new possibilities to strengthen customer relations, attract new prospects, and adapt to growth. BI effectively couples business strategies with information technologies leveraging on the existing IT infrastructure and skills. Returns on investment in BI systems are increased customer loyalty, segmentation of profitable customers, attraction of new customers, and increased bank’s market and stock value. Abstract. Success of banking operations is strongly correlated with the quality of customer relations and efficacy of banks processes. Banks seek means for efficient analysis of vast amount of gathered data from their IT systems. They are exploiting business intelligence (BI) technology to analyze every aspect of their data to understand behavior of their clients, striving to satisfy client’s needs, in an endless race for a competitive advantage in the market. The intention of this paper is to review and discuss the most significant applications of Business Intelligence in banking as well as point to new technology trends that will affect bank’s development. Keywords. Banking, Data Warehousing, Online Analytical Processing, Data Mining, Business Process management, Business Process Intelligence. 1. Introduction The worldwide emergence of information revolution affects every type of business and industry, and particularly, the financial industry. The value of a given piece of information increases with the square root of the number of users who can access that information, multiplied by the number of business areas in which users work [12]. Despite a huge amount of information stored inside banking information systems about customers and their transactions, the banks can rarely exploit its full potential in leveraging of tactical and strategic decision making. Striving for a success, banks are trying to find means for efficient analysis of these data. Detection and suppression of fraud, risk management, customer management, product management, and loss prevention are some of the primary concerns of financial institutions. Today, 2. Business Intelligence BI can be defined as an ability of an e