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
kcurko@efzg.hr, mpejic@efzg.hr
M.Sc. Goran Radoni
Croatian Institute of Technology, Zagreb
goran.radonic@hit.hr
Abstract. Success of banking operations is as ever, financial institutions must keep their
strongly correlated with the quality of customer focus on key success factors, primarily on
relations and efficacy of banks processes. Banks customer satisfaction and loyalty. BI technology
seek means for efficient analysis of vast amount can collect and transform millions of records for
of gathered data from their IT systems. They are comprehensive analysis and provide tools that
exploiting business intelligence (BI) technology bankers can and should use to understand the
to analyze every aspect of their data to customer behaviors, to efficiently satisfy the
understand behavior of their clients, striving to customer needs and fulfill customer’s
satisfy client’s needs, in an endless race for a expectations, and, finally, to gain a competitive
competitive advantage in the market. advantage over their competitors.
The intention of this paper is to review and Patterns in customer needs and habits are
discuss the most significant applications of analyzed on sufficiently large sets of data.
Business Intelligence in banking as well as point However, more the data, more difficult becomes
to new technology trends that will affect bank’s their collection and processing into timely and
development. relevant knowledge. If performed without
adequate tools, this process often requires a lot of
Keywords. Banking, Data Warehousing, On- competence, and, ultimately, generates high costs
line Analytical Processing, Data Mining, and hardly measurable results.
Business Process management, Business Process Implementation of BI systems in banking
Intelligence. begins with collection, enhancement, and
purification of the daily operations’ data from
1. Introduction internal and external sources, including third-
party organizations. Availability of “enhanced”
The worldwide emergence of information data at low cost helps banks recognize and profit
revolution affects every type of business and from new possibilities to strengthen customer
industry, and particularly, the financial industry. relations, attract new prospects, and adapt to
The value of a given piece of information growth.
increases with the square root of the number of BI effectively couples business strategies with
users who can access that information, multiplied information technologies leveraging on the
by the number of business areas in which users existing IT infrastructure and skills. Returns on
work [12]. Despite a huge amount of information investment in BI systems are increased customer
stored inside banking information systems about loyalty, segmentation of profitable customers,
customers and their transactions, the banks can attraction of new customers, and increased
rarely exploit its full potential in leveraging of bank’s market and stock value.
tactical and strategic decision making.
Striving for a success, banks are trying to find 2. Business Intelligence
means for efficient analysis of these data.
Detection and suppression of fraud, risk BI can be defined as an ability of an
management, customer management, product enterprise to comprehend and use information in
management, and loss prevention are some of the order to increase the performance [13]. BI
primary concerns of financial institutions. Today, comprises of a number of activities, procedures
57
Proceedings of the ITI 2007 29th Int. Conf. on Information Technology Interfaces, June 25-28, 2007, Cavtat, Croatia
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