Revolutionizing the Finance Industry With Analytics Infusion
AI-driven analytics can help financial organizations gain deeper insights about customers, accelerate real-time decision making and help identify transactional eros and financial waste. But while these positive impacts of data-driven decision-making in the finance sector are far-reaching, many financial institutions are still missing the opportunity to infuse data analytics.
A recent Sisense survey found that while 30% of finance departments are planning to increase their use of BI and analytics post-pandemic, only 33% of finance departments are currently using analytics or employing BI solutions. That means that two-thirds of finance departments have not experienced the power of infusing analytics.
Building Resiliency in the Finance Sector by Infusing Analytics Everywhere
To transform and build resiliency beyond the pandemic, here are some key ways financial organizations can implement infusing analytics.
Say Goodbye to Spreadsheets
Spreadsheets have become almost synonymous with financial reporting.
Spreadsheets can be found in most finance departments worldwide as the go-to tool for all reporting needs. Financial statements such as balance sheets, income statements and cash flow statements are all prone to arrive in lengthy Excel spreadsheets.
While spreadsheets can offer a reasonable way to summarise large amounts of information, they are not as useful for exploratory analysis. The purpose of a spreadsheet is to condense a large amount of data into an easy-to-digest summary. However, a spreadsheet usually lacks analysis of trends and is usually unable to clearly highlight issues in real-time. In many ways, a traditional balance sheet is written to satisfy accounting and tax requirements, not for easy to access data exploration.
Visual Management and Dashboards
Visual management is a way of easily communicating expectations and standards, without the complexity of spreadsheets and data sets. A visual, ‘at a glance’ report that is easy to understand and shareable across all levels of the company, is one of the most powerful ways to make everyone in the organization become aligned on current business performance and future goals.
Easy to understand, visual ‘dashboards’ are also now an integral part of infusing data analytics and can help financial organizations easily understand and share data insights at scale. When creating dashboards for financial companies, CFOs and finance departments can accurately assess the risk and liquidity, manage the capital structure (debt and equity), and make sound decisions in positioning the firm to take advantage of future opportunities.
In a financial organization, some common KPIs of interest to CFOs or managers include:
- Accounts Payable Turnover
- Accounts Receivable Turnover
- Quick Ratio
- Current Ratio
- Debt-to-Equity Ratio
- Working Capital
- Finance Error Report
- Budget Variance
For most of these metrics, whether a value is ‘good or ‘bad’ is heavily dependent on industry comparisons and past performance.
Financial organizations can also enable interactive data exploration such as analysis capabilities and operational reporting. Interactive dashboards for a CFO, or other upper-level management, need to be analytical. The data shown in the dashboard needs to enable CFOs to assess the firm’s progress towards the business goals. CFOs need the ability to deeply analyze macro-level metrics, and their projections in the dashboards, to understand the whole story that the KPIs are telling them.
Conversely, operational reporting is better suited to other managers that have the responsibility of running the day-to-day operations.
Who Is Getting It Right?
With an authentic data culture, financial organizations can leverage more efficient processes that guide innovation and new business opportunities. Here are some examples of organizations in the finance sector infusing analytics to successfully accelerate their data-driven transformation journey.
Profectus is an international technology and services company based in Melbourne Australia, that provides leading technologies for rebate and deal management, contract compliance, and accounts payable audits.
Profectus does a lot of transactional processing and needs to ensure the accuracy and efficiency of processing the large volumes of data.
For Profectus, having a streamlined, automated online system as a single source of truth became their “holy grail” solution.
“We did a very thorough and rigorous examination of the BI space, and we put all of the different platforms through the wringer. Sisense came out as the leading BI solution on the market,” Mark Webster, CTO at Profectus said. “With Sisense, the data is stored safely and securely, so we can extract the full value from our data. We can get consistent, repeatable and scalable answers to our business needs.”
Financial advisory software firm Orion was previously using a static reporting solution that served up stale news weeks after month-end. However, their customers wanted real-time, pre-configured, dynamic dashboards.
The company needed to move from business metrics to BI. Their customers needed a platform with better visualizations and direct access to accurate, up-to-date data, in order to make informed business decisions. However, with 51 terabytes of data to wade through, Orion needed to find a BI tool that could handle this volume without sacrificing granularity.
Their customers wanted pre-configured dashboards, with interactivity to let them explore their data and drill into details. The white labeling function in Sisense worked perfectly for this; Orion could embed the BI tool into their product and offer it to their clients as part of their own platform.
As a result of the Sisense integration, advisors are better equipped to analyze business trends, and address customer questions regarding Assets Under Management (AUM) changes over time. The advisors can also monitor business performance KPIs such as the opening of new accounts, transaction types, top staff performers, cash flows, and customer insights such as demographic trends.
Nasdaq Investor Relations
Electronic stock exchange, Nasdaq Investor Relations, uses an automated network of computers to create a virtual trading floor for exchange activity. While Nasdaq has its share of unique challenges, a key consideration is cybersecurity when handling data and sharing it with customers.
In financial services, security is paramount. Nasdaq must meet incredibly high-security standards while operating the exchange. Using Sisense embedded analytics has given them a solution that meets the high-security standards.
“Our biggest win is allowing our clients to have a new way of interacting with data that they’re very familiar with,” says James Tickner, Head of Data Analytics for Nasdaq Corporate Solutions.
“Our customers rely on a range of content sets. This includes information that they license from others, as well as data that they input themselves. It’s beneficial to layer all this data together to attain a new level of value. They may have been looking at the same data for years, but now they view it within a different context to develop deeper insights.”
Bringing Deeper Insights to Influence the Future of Finance
Challenges provide tremendous opportunities to grow. As financial organisations face fast-changing customer expectations due to Covid, it is the right time for financial leaders to evolve their role. They can bring their analytics-driven insights to the boardroom to prove measurable and strategic importance and help influence strategy.
To achieve this, a strong foundation of analytics is essential. With the right analytics solution, infused seamlessly into workflows, finance leaders can develop an analytics-driven culture that leads to optimised strategic outcomes, which ultimately impacts revenue streams. An agile analytics infrastructure is key to evolving the future of finance.