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Business intelligence software has emerged as a key tool for data collection and analytics for BFSI companies, helping them get maximum value out of their data, improve decision-making and stay competitive. With the global business intelligence software market projected to reach $27.36 billion in 2024, as reported by Statista, the incentive to adopt BI systems has never been stronger.
However, implementing BI for finance can be as challenging as implementing any technology. Keep reading to discover which risks are commonly associated with developing and integrating a financial BI solution and how to navigate these complexities effectively.
READ: Maximizing Investments — Harnessing Data-driven Real Estate Strategies
Data quality and integrity
The bedrock of any BI system is data, and a BI solution is efficient as long as accurate information is used for analysis. Financial organizations handle enormous data volumes every day, which often results in inaccuracies and data silos. With low-quality data entering the system, the BI solution is prone to produce erroneous or unreliable analytics reports.
Ensuring data quality management
For a BI solution to operate efficiently and produce valuable and accurate insights, it should both ingest quality data and provide robust data quality management capabilities to process inconsistent data formats and incomplete datasets. Thus, it is recommended to implement robust data governance practices to oversee data acquisition, storage and usage processes company-wide. At the same time, the BI system should allow for:
- Data profiling to assess data quality and identify anomalies.
- Data cleansing to correct errors and inconsistencies.
- Data transformation and standardization to convert data into a standard format to ensure uniformity and consistency.
READ: Battling the “Data Wheel of Death” in Business Development
Data security and compliance
BFSI companies are ideal targets for cybercriminals due to the sensitive nature of the information these organizations manage. Therefore, protecting data within BI software from unauthorized access or data breaches is paramount. In addition, financial institutions must comply with multiple stringent regulations, like GDPR, PCI DSS or SOX, which require companies to have transparent financial reporting, established internal controls, and audit trails.
Put security measures in place
When implementing a BI solution in the finance sector, ensuring data security and regulatory compliance involves a comprehensive approach that integrates technology, policies and employee training. As a part of this approach, it is advisable to:
- Introduce advanced security mechanisms into your BI system, like role-based controls or multifactor authentication (MFA).
- Set up continuous security monitoring and automated alerts for any suspicious activity.
- Develop a clear incident response plan describing steps to be taken in case of a data breach or security incident within the BI solution.
- Make sure your employees are aware of the most common cyber attacks, such as phishing, insider threats or malware, and know how to avoid getting tricked by cybercriminals in the first place.
- Conduct regular compliance audits to verify that the way data is collected, stored, and analyzed does not violate its accuracy, integrity, and security and adheres to these regulations.
READ: How to Protect Your Business Against a Data Breach in 2024
User adoption
Introducing a new technology does not always receive a warm welcome from employees. Resistance to change is common, as employees may be accustomed to traditional methods of handling data, like Excel, or they don’t understand how the tool benefits them. Another common reason for skepticism about new technologies is the lack of skills to operate the newly introduced software. That is why even the most powerful BI tool becomes a waste of investment if rejected by your employees.
Fostering a culture of change
Implementing a BI system in finance may require significant changes in organizational processes and culture. Start with organizing workshops for your employees to communicate the reasons for implementing the BI solution. Demonstrate the new system’s capabilities to show how it will make their daily work easier and more efficient.
After implementing the system, conduct role-based training sessions for your staff, tailoring the training content based on their job positions. Some employees will only need the basic BI functionality, while others will need to learn advanced capabilities, such as creating analytics reports and dashboards or integrating new data sources.
In addition, establish two-way communication with your employees, thus ensuring users can ask questions about software and leave feedback on the BI system usage. This way, you can monitor and adjust the software adoption process.
READ: 6 Ways to Create a Lasting, Thriving Company Culture
Long-term costs
As for any other sector, implementing and maintaining a BI solution for finance can be costly. Apart from the apparent BI implementation costs like software fees and the salaries for BI implementation specialists, companies should also consider hidden costs like user training expenses, potential upgrades to the existing IT environment and data management and migration costs.
Careful budget planning and iterative BI development
Managing apparent and hidden costs associated with implementing BI software in finance requires a strategic approach. To develop a detailed budget that covers all the expenses incurred, conduct a thorough needs assessment and gather input from all key stakeholders to ensure a comprehensive understanding of software requirements.
Instead of a full-scale implementation, consider a phased approach, starting with core functionalities and gradually adding more advanced features. This way, you will be able to evaluate the impact of each phase before proceeding further, allowing for cost adjustments and optimizations.
The bottom line
Implementing BI in the finance sector presents challenges, primarily centered around data management and its security, organizational change and unpredictable expenses. By addressing these challenges through strategic planning, adopting robust data management approaches, investing in data security mechanisms and fostering a culture of innovation, financial organizations are sure to unlock the full potential of BI.
If you lack the expertise to plan BI implementation, consider seeking advice from a BI consulting firm that can provide guidance on best practices for BI adoption and help navigate arising challenges.
Elizaveta Karpovich is a Technology Observer at Itransition, a Denver-based software development company.
