8Dec 2019 - Jan 2020Data Analytics Gaining Momentum in the Banking SectorBy Glen Siegel, Director of Strategy and Analytics, CapStar BankIn light of your experience, what are the major challenges that you have seen in the Banking Analytical space, and what are the emerging trends?Talking about my experience, I have been in the financial services space, especially in data and MCIF for more than 20 years. I had seen it from its infancy when the whole purpose of the MCIF was to reduce your costs, directly taking your account level information, and rolling it up to enable you to save postage. This information is thus used for segmentation purposes and to drive profitability and revision of productand pricing strategy. However, in today's age where data has gained massive significance, it is essential to take all siloed data sets--be it about new products, features, their benefits--and identify how do they all come together to give you meaningful information. Primarily, what I have seen as one of the biggest challenges in the financial industry, particularly in the community-banking sector is the lack of understandingthe value of analytics outside of the G/L. It can enhance the potential of a financial institution in terms of profitability, cutting costs, and other factors related to their growth. This is effectuated by using an Analytics expert to answer the "whys" and "hows," alongside the "what" and "when" addressed by the typical Finance and Accounting areas of the banking sector. The hardships in accessing the siloed data sources and gathering them together to make it meaningful, actionable information has also emerged as a strenuous task for bankers today. The ability to create a dashboard for senior managers to quickly access and evaluate valuable data points, in an automated way, is also of paramount importance.Could you illustrate with some examples of the strategy that you have adopted to entail the new technologies into your organization's ecosystem?I have seen several proficient strategic initiatives coming up in the banking space. However, financial institutions, in their attempt to answer questions, oftentimes, try to tick-and-tie back to a GL answer. Instead, what we need is a relationship, an in-depth look at specific customers who are potentially being impacted. From a community banks perspective, it is just a matter of getting started, someone asking those questions, and using the available software. Unfortunately, there is a lack of a unique, intuitive, and robust systems in the ecosystem. Human workforce and Excel are still in use to pull out data and figure out the answer to the questions--"whys" and "hows"--and decide, "Are we going to do more of it? Are we going to do less of it? Are we going to stop doing it altogether? Do we need to go on a different path?"If you are fortunate enough to work for an organization that invests in Tableau software or technology like BI or some piece on intelligence, you want to look at data deeper. However, at the end of the day, it is just having that role and having the opportunity to answer those questions. The other element, I think that all banks struggle with is a dashboard piece, which brings all data together. It is so critical in today's IN MY OPINIONOne of the biggest challenges in the financial industry, particularly in the community banking sector is the lack of understanding the value of analytics outside of the G/L. In an interview with CFO Tech Outlook for a special edition of Budgeting and Forecasting, Glen Siegel, Director of Strategy and Analytics, CapStar Bank, explains that, "Analytics can enhance the potential of a financial institution in terms of profitability, cutting costs, and other factors related to their growth."
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