Opportunity Watch: Advanced Analytics In Finance

Ritika Puri

Advanced Analytics Is Crucial For Finance

Opportunity Watch: Advanced Analytics In FinanceBig data is transforming industries. From education to tech, retail, and healthcare, sophisticated analytics are helping organizations make intelligent decisions to maximize key goals.

“From Facebook to Netflix, companies are tracking and analyzing our searches, our purchases, and just about every other online activity that will give them more insight into what we are and who we want,” wrote Jim Fruchterman for Harvard Business Review. “The more we use technology in our education and health systems, the more data we collect about how people learn and what keeps us healthy or what makes us sick.”

For financial firms that face challenges of increased governance, risk, strict compliance guidelines, and worldwide economic instability, the need for data-driven decisions is even more crucial.

“To navigate the complexity and manage capital more effectively, it’s essential to develop advanced analytic forecasting capabilities and financial management techniques,” according to a Deloitte case study.

The following three areas are leading the charge:

1. Decision Support Partnerships

Data drives more than just reporting — financial firms need quantitative strategies to drive overall business. Big data transforms finance teams from researchers and analysts to key influencers.

“Companies with strong FPA[Financial Planning & Analytics]-business partnerships have more cost discipline and deliver a 5.9% average annual total shareholder return premium,” wrote Michael Griffin, Jian Chen, and Anna Kipchuck for the Wall Street Journal.

Opportunities include synthesizing diverse data systems, extrapolating trends, improving efficiency, and recommending changes to the overall business.

“Unsurprisingly, finance teams with these capabilities are more likely to be viewed as strong business partners, which means they’re more likely to be involved early in key conversations and decisions rather than during the approval or funding stage,” wrote Griffin, Chen, and Kipchuck.

2. Compliance Cost Reduction

Last year, the financial services industry witnessed hundreds of new regulations. These changes will have a heavy influence on the sector’s data strategy. Beyond long-standing Sarbanes-Oxley regulations, new regulations from Basel III, the Dodd-Frank Act and other legislation create new complexities — with data as a mission-critical remedy.

Boston-based State Street Corp., for instance, is experimenting with semantic databases — information storage solutions with flexible data structures that prioritize meaning in relationships.

“State Street began experimenting with semantic databases last year and has moved from proof-of-concept demonstrations to pilot programs using the semantic data model,” wrote Kathy Burger for Bank Tech.

According to State Street’s chief scientist David Saul, semantic data is a powerful compliance tool for the Legal Entity Identification (LEI) standard mandated by the Dodd-Frank Act.

“State Street has been working on taking a semantic approach to LEI data, and Saul says its ability to link different kinds of data and creative equivalency could prove invaluable to banks in their efforts to comply with this new standard” wrote Burger.

With automation of LEI data — an otherwise manual process — comes cost savings opportunities through improved efficiency.

3. Rigorous Predictive Models

Volumes of data are growing exponentially for the finance sector. These data points are invaluable for profit and efficiency maximization.

“Banks and investment firms assess massive amounts of data to stay ahead of the competition,” wrote J.J. McCorvey for Inc. “In 2011, for example, trading volume grew to 4.55 billion contracts, up 17% from 2010, while the American Bankers’ Accociation reports that there are 10,000 credit card transactions every second around the world.”

Predictive models are invaluable for sifting through massive consumer insight volumes. Best practices rely on the capabilities and priorities of individual organizations.

“Harnessing the ultimate power of an information-driven culture will depend on how organizations approach the opportunities offered by data and analytics,” wrote Jeanne E. Johnson for a KPMG report.

Cut costs, influence business decisions, and grow profits — all three provide opportunities for advanced analytics as a guiding force. As reporting standards grow more complex and competition for consumers becomes more rigorous, the need for data will become exponentially higher.




#Forbes , awareness

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13 Scary Statistics On Employee Engagement [INFOGRAPHIC]

Jacob Shriar

There is a serious problem with the way we work.

Most employees are disengaged and not passionate about the work they do. This is costing companies a ton of money in lost productivity, absenteeism, and turnover. It’s also harmful to employees, because they’re more stressed out than ever.

The thing that bothers me the most about it, is that it’s all so easy to fix. I can’t figure out why managers aren’t more proactive about this. Besides the human element of caring for our employees, it’s costing them money, so they should care more about fixing it. Something as simple as saying thank you to your employees can have a huge effect on their engagement, not to mention it’s good for your level of happiness.

The infographic that we put together has some pretty shocking statistics in it, but there are a few common themes. Employees feel overworked, overwhelmed, and they don’t like what they do. Companies are noticing it, with 75% of them saying they can’t attract the right talent, and 83% of them feeling that their employer brand isn’t compelling. Companies that want to fix this need to be smart, and patient. This doesn’t happen overnight, but like I mentioned, it’s easy to do. Being patient might be the hardest thing for companies, and I understand how frustrating it can be not to see results right away, but it’s important that you invest in this, because the ROI of employee engagement is huge.

Here are 4 simple (and free) things you can do to get that passion back into employees. These are all based on research from Deloitte.

1.  Encourage side projects

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload. Let them explore their own passions and interests, and work on side projects. Ideally, they wouldn’t have to be related to the company, but if you’re worried about them wasting time, you can set that boundary that it has to be related to the company. What this does, is give them autonomy, and let them improve on their skills (mastery), two of the biggest motivators for work.

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload.

2.  Encourage workers to engage with customers

At Wistia, a video hosting company, they make everyone in the company do customer support during their onboarding, and they often rotate people into customer support. When I asked Chris, their CEO, why they do this, he mentioned to me that it’s so every single person in the company understands how their customers are using their product. What pains they’re having, what they like about it, it gets everyone on the same page. It keeps all employees in the loop, and can really motivate you to work when you’re talking directly with customers.

3.  Encourage workers to work cross-functionally

Both Apple and Google have created common areas in their offices, specifically and strategically located, so that different workers that don’t normally interact with each other can have a chance to chat.

This isn’t a coincidence. It’s meant for that collaborative learning, and building those relationships with your colleagues.

4.  Encourage networking in their industry

This is similar to number 2 on the list, but it’s important for employees to grow and learn more about what they do. It helps them build that passion for their industry. It’s important to go to networking events, and encourage your employees to participate in these things. Websites like Eventbrite or Meetup have lots of great resources, and most of the events on there are free.

13 Disturbing Facts About Employee Engagement [Infographic]

What do you do to increase employee engagement? Let me know your thoughts in the comments!

Did you like today’s post? If so you’ll love our frequent newsletter! Sign up here and receive The Switch and Shift Change Playbook, by Shawn Murphy, as our thanks to you!

This infographic was crafted with love by Officevibe, the employee survey tool that helps companies improve their corporate wellness, and have a better organizational culture.


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Supply Chain Fraud: The Threat from Within

Lindsey LaManna

Supply chain fraud – whether perpetrated by suppliers, subcontractors, employees, or some combination of those – can take many forms. Among the most common are:

  • Falsified labor
  • Inflated bills or expense accounts
  • Bribery and corruption
  • Phantom vendor accounts or invoices
  • Bid rigging
  • Grey markets (counterfeit or knockoff products)
  • Failure to meet specifications (resulting in substandard or dangerous goods)
  • Unauthorized disbursements

LSAP_Smart Supply Chains_graphics_briefook inside

Perhaps the most damaging sources of supply chain fraud are internal, especially collusion between an employee and a supplier. Such partnerships help fraudsters evade independent checks and other controls, enabling them to steal larger amounts. The median loss from fraud committed
by a single thief was US$80,000, according to the Association of Certified Fraud Examiners (ACFE).

Costs increase along with the number of perpetrators involved. Fraud involving two thieves had a median loss of US$200,000; fraud involving three people had a median loss of US$355,000; and fraud with four or more had a median loss of more than US$500,000, according to ACFE.

Build a culture to fight fraud

The most effective method to fight internal supply chain theft is to create a culture dedicated to fighting it. Here are a few ways to do it:

  • Make sure the board and C-level executives understand the critical nature of the supply chain and the risk of fraud throughout the procurement lifecycle.
  • Market the organization’s supply chain policies internally and among contractors.
  • Institute policies that prohibit conflicts of interest, and cross-check employee and supplier data to uncover potential conflicts.
  • Define the rules for accepting gifts from suppliers and insist that all gifts be documented.
  • Require two employees to sign off on any proposed changes to suppliers.
  • Watch for staff defections to suppliers, and pay close attention to any supplier that has recently poached an employee.

About Lindsey LaManna

Lindsey LaManna is Social and Reporting Manager for the Digitalist Magazine by SAP Global Marketing. Follow @LindseyLaManna on Twitter, on LinkedIn or Google+.


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Time For Banks To Fight Back

Laurence Leyden

Metamora, Illinois, USA --- USA, Illinois, Metamora, Close-up of man photographing checque --- Image by © Vstock LLC/Tetra Images/CorbisThe financial services industry has suffered consecutive blows in recent years. The global banking crisis, new regulations, empowered customers calling the shots, not to mention a new breed of digital disruptors out to steal market share, have wreaked havoc on business as usual.  Profits have been slashed, reputations have been damaged, and management has been blindsided.

The only way forward is change – a change of business model, a change of mindset, and a change of ecosystem.  It’s a major upheaval, and not to be taken lightly. Banks in particular have operated largely the same way for the past 300 years. Management is facing a once in a generation reassessment of 21st century banking.

Changes in customer behaviour, including 24×7 omnichannel service expectations, lack of loyalty by current customers willing to exchange privacy for easier access to information, generational expectations of future customers – “screenagers” and tech savvy Millennials – and technology advances in cloud, mobile, real-time data, and predictive analytics make yesterday’s business model redundant.

Banking isn’t actually about banking anymore. It’s about enabling people’s lifestyles. That means you have to completely re-think how you engage with customers. The lessons are everywhere in parallel industries. Nokia, for example, thought it was about the phone, not the customer experience. Digitisation has both emboldened and empowered customers. Ignoring this fact is pointless. You need to cater to what consumers want. That means your back-end systems need to be integrated, consistent, contextualised and easy to deploy across any channel.

There’s also a whole new ecosystem required to support this new business model. Banks are facing disaggregation as they no longer own the end-to-end value chain, as well as disintermediation as new market entrants attack specific parts of the business (think Apple Pay). Smart banks are forging relationships with different and unexpected partners, such as mobile and retail organisations, even providing products from outside of the group where they are the best fit for a customer’s needs.  As I’ve said in one of my previous blogs, there’s a new mantra for modern banking: “Must play well with others.”

Old-fashioned banking is gone, and with it so have old style processes, business models and attitudes. Nobody wants to be the last dinosaur.  It’s time for the industry to dust itself off, and step up. Embracing change is easier – and far more profitable – than risking irrelevance in the widening digital divide.

I’ve briefly summarised only some of the key drivers of digital transformation, but you can find much more insight – including views from thought leaders in banks, insurance companies, fintech providers, challenger banks and aggregators – by downloading the eBook from the recent SAP Financial Services Forum: The digital evolution – As technology transforms financial services who will triumph.

It’s essential reading if you’re going to successfully fight back.


About Laurence Leyden

Laurence is Director, transaction Banking for EMEA and is primarily involved in helping banks in their transformation agenda. Prior to SAP he worked for numerous banks in Europe and Asia including Barclays, Lloyds Banking Group and HSBC. He regularly presents on industry trends and SAP’s banking strategy.

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Create A Culture That Doesn’t Fear Failure

JP George

A fear of failure could be holding back your business.

If the people on your team are worrying about being ridiculed or blamed for independent creativity or the downfall of an entire project, they are likely to hold back their ideas and stick to completing projects in the same way over and over again. In comparison, people who work in an office culture with no fear of failure feel free to bounce ideas around, which helps generate new practices, keep up with the times, push projects along, and can “wow” customers with innovation.

Changing the way your office works won’t happen overnight, but these five tips could begin to implement positive changes to help steer your team toward a working environment that is good for the staff and good for the business.

1. Recognize and reward

Employee recognition is the key to not fearing failure. When an employee or team member goes above and beyond; make sure they know that their hard work is appreciated and that an efficient system for providing employee recognition awards is in place. Even small things like suggesting a new way to carry out a particular process should be celebrated. If an employee, colleague, or team member has a suggestion that isn’t quite on-point, find the positive; for example, you might say, “You’re on the right lines, your idea will help speed the process up, but…” Always make sure to offer positive feedback first, then mention the thing that needs changing, and end with encouragement: “Once that’s ironed out, we can implement this — great work!”

2. Adopt a team mentality

Seems straightforward and fairly obvious for a first step, but so many companies do not know how to really generate a feeling of teamwork and inclusivity, and instead put up a front of “togetherness” while retaining the bad practices that divide a workforce. Start by calling a team meeting and setting some ground rules together. Yes, it’s a basic ice-breaking activity in almost all training sessions, but it also helps each person to display respect and hear the opinions of other members of the group. Suggest from the start that the team use “we” rather than individual pronouns when discussing projects, as it helps to dispel blame culture and reminds each person that they are all responsible for any successes and downfalls of the team.

3. Say “yes” more

When staff members and colleagues approach you with ideas and innovation, are you more likely to think “straying from the status quo is dangerous,” or are you willing to hear the person out and let their creative juices flow? Even if the first suggestion they offer is horrible, try not to say “no” outright or make the person feel bad for sharing. Try to find a way in which their idea can be incorporated, even if it has to be altered to fit the project. Saying “yes” to the inspiration and thoughts generated by staff and colleagues means that they will be likely to offer more ideas in the future, and without that openness, you might miss the next great innovation in your industry.

4. Blame less

Similarly, try to incorporate policies that encourage employee recognition rather than shame for sharing concepts. If failure does occur, do not publicly belittle the person deemed responsible, even in jest. This creates tension within the office or team and can make the person receiving the blame less likely to contribute in the future, and may even affect their personal well-being. Instead of blaming and shaming, discuss what went wrong as a group, and try to enforce the group mentality of “we could have done…” rather than “I/they/she/he did…”

5. Look for the positives

If, for any reason, your team does experience failure—and you should, otherwise you’re just not aiming high enough—try to see the positives, and discuss the issue as a group — not in cliques of us vs. them, but together discuss what the group could have done better. If a majority insist on blaming one or two people, move onto analyzing how communication channels could be opened up and ask members how inclusivity could be improved. After all, if only a few people are responsible for a project failing, the responsibility was obviously not being shared in an equal manner while the project was underway. There are positives to every situation, even if it is just the ability to improve your team dynamic.

The changes won’t happen immediately, but once the systems are in place and your staff, colleagues, and team members start to understand the goals within both the office and working environment as a whole, your employees’ creativity should start flowing and you will start hearing new suggestions regularly. Even if some don’t work well, remember to recognize employees and enjoy the rewards of your newly open and trusting workforce.

Want more employee engagement tips? See Boost Productivity With These 4 Brain Breaks.


About JP George

JP George grew up in a small town in Washington. After receiving a Master's degree in Public Relations, JP has worked in a variety of positions, from agencies to corporations all across the globe. Experience has made JP an expert in topics relating to leadership, talent management, and organizational business.

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