It’s in the nature of financial institutions to deal with risks all the time. Banking, financial services, and insurance (BFSI) companies have long relied on risk management programs to control threats while exploring avenues to improve profitability and earnings.
The current times, however, are full of uncertainties. The economy is still recovering from the effects of the COVID-19 pandemic, ongoing conflicts and logistics issues are disrupting the global supply chain, and many countries are experiencing high inflation rates. These are all considerations one should factor in when calculating risks in this day and age.
Top 4 Enterprise Risk and Finance Data Solution for Banks
To navigate these precarious circumstances and maximize the opportunities they bring to the table, financial organizations must be able to make data-driven decisions based on real-time and ever-changing information. Crucial to this goal is the use of an enterprise-level risk and finance data solution. Such a tool offers capabilities that will enable financial organizations to make practical business decisions while keeping the level of risk they take on within an acceptable range. These include the following:
1. Oversee Multiple Processes in a Single Platform
Calculating risk is a complicated task that requires the use of multiple sources of information and processes. This task can be made even more complex if a financial organization has to use different programs just to fetch relevant information and factor the said information into its calculations.
In the past, because risk calculation required enormous amounts of financial data, organizations had to use multiple applications in order to carry out the task. Now that modern and more powerful financial services analytics programs are widely available, it’s possible to unify all risk-related applications in a single enterprise-level solution.
Having a unified platform for carrying out risk calculations simplifies this task and reduces the amount of time and effort needed to complete it. Such a setup makes it possible for BFSI companies to more quickly get an overview of the parameters that determine their risk level, all while keeping costs down.
2. Track All Risk-Related Processes from Beginning to End
Having a single platform for managing all risk-related activities has plenty of advantages, including the capability to track each process from start to finish. Modern risk and finance data solutions are designed to make it easy for financial institutions to grant, maintain, and take away administrator access to information and processes. Plus, these programs also keep detailed records of all the activities and changes that were carried out by the platform’s users.
Take note, though, that the level of control that a modern enterprise-level risk and finance data solution offers does not come at the cost of flexibility. It’s still possible for third-party engines and incremental modules to be integrated into the platform to aid the accuracy of its calculations and improve its analytics and reporting capabilities.
3. Determine Elements That Drain Profitability
A modern risk and finance data solution keeps a clean record of the processes and functions that it handles. Thanks to this, it’s within the software’s capabilities to come up with a fine-grain data model that points to the sources of losses or profitability drains.
The platform can even zero in on details that play a role in determining the level of profitability that an account can reach during the customer lifecycle. This, in turn, gives the financial institution the capability to tweak its offerings to improve its engagement with customers. It also enables a bank to amend its internal processes with the goal of making them more efficient and cost-effective while still delivering quality results.
4. Quickly Develop and Bring Products to Market
Developing a financial product is a time-consuming process for many banks. In order to design a product that will be well-received by the market, a bank must first determine the exact needs of its customer base. Such an undertaking requires the extensive use of a risk and finance data solution’s analytics and reporting capabilities.
The good news is that an enterprise-level solution can seamlessly integrate vast amounts of information from a financial organization’s various data sources. Using this collected data, the software can then provide a detailed report of the bank’s metrics as well as the performance of its existing products and services. Such details will help the bank quickly come up with new products that don’t overlap with its existing offerings.
Using the same data, banks can also track the performance of both old and new products to determine if they’re meeting the needs they were designed to address. If they aren’t, then the poorly performing products can be reworked in order to meet the goals that have been set for them.
While designed to give financial institutions better control of their risk-related functions, an enterprise-level risk and finance data solution can do more than help a bank balance threats with opportunities. With it, a bank can develop better products and services, address issues that drain its profitability, and quickly design and launch products that anticipate the needs of its target market. Such a tool is indispensable to a financial organization that aims to thrive in the digital age.
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