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Business analytics (BA) is typically implemented to gain insights into and reveal patterns about consumers' behavior. It utilizes statistical technologies such as data mining, clustering and regression modeling to discover relationships in data that can determine the probable outcome of future events and allow for users to take preemptive actions if necessary. Often, such analytics are able to make predictions that are otherwise not apparent or too complex to be identified using core analytics software.
Interestingly, according to several recent IDC end user surveys, we found that BA is establishing rapid inroads into the Asian financial services community. Amongst the insights garnered, we discovered that three in four financial institutions have implemented a BA solution, with the bulk having opted for packaged BA solutions (a testament to the robust functionality of most vendors' off-the-shelf technology). However, almost one-third of the surveyed have issues quantifying the probable cost/benefit trade-off from BA. In addition, a core challenge in implementing BA solutions is poor data quality which limits the efficacy of analytics.
In terms of BA application deployment, financial analytic applications are currently the most commonly utilized software, while dashboard and scorecards tools are those ranked highest in terms of future planned implementation. Meanwhile, 22.6% of the respondents indicated intent to migrate BA software to a SaaS delivery model, convinced of the advantages of adopting an on-demand model to software provisioning. Going forth, we are forecasting that APEJ's BA software market is set to expand at a five-year CAGR of 6.4% to reach US$2,006 million in 2013, with circa 66% of the market being shared by the top five BA software vendors.
BA offers financial institutions an opportunity to leapfrog over decades of disparate data and gives them a leg up in their CRM strategies. IDC Financial Insights strongly believes that financial players will continue to place utmost importance to business intelligence and data management in the foreseeable future, and that you (if you are banker or insurer reading this column) would be no exception.
To find out what else we have to say about this topic, please refer to: Business Strategy: Enhanced Role of Analytics for the Financial Services Institution of Today at http://www.idc-fi.com/getdoc.jsp?containerId=FIN223523. In this report, we further profiled the top five leading BA vendors in the Asia/Pacific region, provided guidance on how financial institutions can pragmatically utilize BA to deliver better business decisions, and how vendors can actively address customers' evolving BA requirements.
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