Banking | Dashboards and Data Viz

Dashboards are a potentially powerful new tool for banks and financial institutions.

Featured in the BankNews April print issue.

In an industry where complex financial data is integral and essential, banks and other financial institutions face formidable information-management challenges. For executives and decision makers at those institutions, the process of corralling and sorting through vast amounts of data is time-consuming, often resulting in metrics that are difficult to digest, challenging to contextualize and even harder to use as the basis for making educated decisions.

From gauging teller efficiency and evaluating risk profiles to monitoring transactions and tracking loan applications and productivity, the financial and operational variables involved in running a financial institution are enormously complex. Banks traditionally handle high volumes of data by implementing detailed and demanding reporting structures. But interpreting that information is the real challenge: Executives often struggle to make sense of the data they have, let alone how best to use it to their advantage.

For growing numbers of financial institutions, dashboards are the answer. These sophisticated data- gathering and visualization tools can help consolidate and coordinate critical data (in real time) into a single screen presentation — helping decision makers better understand the bigger picture at a glance and make better business decisions quickly and more efficiently.

The value of visuals

High-quality dashboards are both simple and powerful, offering specific metrics that can be tracked in real time. They are effective and engaging, with dynamic visual displays of essential information in an accessible and intuitive interface that is easy to use and understand.

Robust dashboards can pull critical data in real time and allow executives to drill down into specific aspects of their data to achieve clarity around certain measurable results. Progress toward defined objectives can be monitored and evaluated. While real-time data is essential, the ability to visualize that data in a dashboard to see the bigger picture is even more important in helping business leaders make better business decisions.

The regulatory advantage

Larger financial institutions have the same problem faced by many large organizations: a structure that creates distinct “silos” of information/operations. This silo structure
hampers efficiency and is a significant regulatory liability. With Dodd-Frank and other demanding regulatory obligations on the horizon, taking on too much risk as an organization is a serious problem. Dashboard solutions make it possible to easily and conveniently assess exposure and risk levels at a glance — eliminating the need to dig through columns of spreadsheets to ensure that loans are being managed effectively.

Dashboards are also an unmatched audit/review tool. One credit union in Clinton Township, Mich., that was experiencing rapid growth was consequently scheduled for review by a risk-assessment officer. With a high-quality dashboard in place, the credit union was able to quickly produce critical financial data and illustrate that it was effectively monitoring risk levels and exposures on a daily basis — ultimately leading to the fastest and easiest review the organization had ever experienced.

More than simply another business tool, dashboards have the potential to transform the way financial institutions operate. Understanding the best practices involved in implementing these systems is an important prerequisite, however.

Read next: How Dashboards Can Help Banks Embrace Technology

Best practices

Metrics matter. Understanding specific metrics that impact your organization — and, consequently, which metrics should be included in your dashboard — is the first and most important step in designing and deploying an effective dashboard solution. Specific metrics can be designed to assess an institution’s ability to execute corporate strategy and target investment profiles.

The who and the what. Understanding the big-picture goals behind dashboard data (the what) is one puzzle piece, but the who is another important element. Think critically about who needs access to various dashboards. In some cases, dashboards can serve as portals that distill the big picture down to a manageable perspective for stakeholders and executive decision makers. In others, they can become real-time tools for customer-facing employees. Tellers, customer representatives or call center employees need to see very different information than senior executives. In an industry where security is paramount, designing dashboards that provide different employees with the precise information they need (while limiting access to information they do not) is critical.

Unlock productivity. Visibility and transparency create accountability — especially for customer-facing employees utilizing dashboards. Some banks have seen dramatic gains in productivity after adopting dashboards. While account openings and card enrollments are often incentivized, simply seeing your performance versus other tellers drives increased productivity.

Clarity and quality. Decision- makers should ensure that dashboard information/metrics are straight forward and easy to understand. Too many business-intelligence tools are not designed for average users. To fully utilize an analytics tool, more than just serious data analysts need to be able to interpret the information it presents. CEOs should be able to understand dashboards at a glance — and subsequently use that information to make timely and informed strategic decisions.

Prioritize flexibility. The best dashboards are flexible and fully customizable, features lacking in many existing dashboarding tools. Generic options are relatively easy to implement, but banks have limited opportunities to design their systems to accommodate their operational preferences and corporate philosophy. Quality dashboards connect seamlessly to multiple data sources and integrate a range of customizable options for clients to access and visualize data in their preferred manners.

Embrace change. Banks are generally “old-school” organizations: traditionally risk averse, conservative and resistant to change. That cautious and deliberate approach is an understandable byproduct of operating in a highly regulated industry. Many banks have become accustomed to regimented reporting schedules — sometimes scheduling regular reports to be automatically emailed to executive inboxes. Transitioning to a data-on-demand model is a cultural change that requires courage on the part of tradition-bound organizations, but the transformation is profound. The best dashboards make it possible to have your cake and eat it too: integrating automated reporting functionality along with the real- time data displays.

For experienced professionals in the banking industry, under- standing how the right dashboard can simplify and clarify operations while boosting efficiency and transparency is the first step in an ongoing transformation. Dashboards offer the kind of sophisticated information management that financial institutions need to utilize to be consistently successful in a competitive and rapidly evolving industry.


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Stephen Misajlovski

Stephen Misajlovski is a Financial Services account manager, who has just finished his second Master’s Degree specializing in operations and strategy. If you're looking to connect, he likes to talk about sports, the difference between "your" and "you're", and visualizing data.


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