Hear from five thought leaders as they discuss the opportunities and obstacles facing the financial services industry today as it moves firmly into the digital age.Chris Swecker of Swecker Enterprises covers the current state of fraud in banking and explains how data can be used to mitigate it; Jim Goodnight, SAS CEO, explains how a high-performance banking technology framework can provide the next answer to key business questions; Jim Davis, Senior Vice President and Chief Marketing Officer of SAS, shares his insights on why understanding customers' needs will be critical to thriving in the current economic climate; Nobel Laureate Myron Scholes and Alastair Sim, Senior Director of Global Marketing at SAS, address past risk management techniques and how they should evolve. Learn more at http://www.nafcu.org/sas

1. Insights on How to Run a Bank
A selection of articles by thought leaders that appeared in previously
published material from Financial Times Business Enterprises Ltd.
Featuring:
Jim Davis, Senior Vice President and Chief Marketing Officer at SAS
Jim Goodnight, CEO of SAS
Myron Scholes, Nobel Laureate
Alastair Sim, Senior Director of Marketing at SAS
Chris Swecker, Independent Consultant at Swecker Enterprises

2. HOW TO RUN A BANK
Table of Contents
Foreword ..........................................................................................................1
Connnecting with customers in a multi-channel world ................................4
Mitigating bank fraud: finding the right strategy ..........................................6
Transforming performance: the evolution of risk ..........................................8
High performance banking technology ........................................................10
i

3. HOW TO RUN A BANK
Foreword
For more than 35 years, SAS has partnered with some of the most successful
organizations in transforming the way the world works, from discovering
revolutionary medical breakthroughs to developing innovations to ensure that
business can get the right products to the right places at the right times. Such
innovations have been born from both necessity and opportunity – both in
reaction to changes in the world around us, and in anticipation of the changes
yet to come.
As an example, look at the world of the consumer, which has evolved from
the comparatively simplistic, low-tech domain of a few decades ago to the
constantly changing, complex one of today. In response, businesses have had
to rapidly modernize and adapt in order to survive. Customer choice and fierce
competition have sealed the fates of those too slow to respond.
Arguably, no industry has faced greater changes and challenges than the
financial services industry, which has witnessed dramatic highs and lows over the years in response to fluctuations
in an unstable global economy. Exponential advancements in technology have enabled banks to trade across global
markets, while giving customers unprecedented access to financial services through smartphones and other mobile
devices. The result has been an explosion of data in staggering volumes pouring through financial systems and across
the Internet. And while data is the lifeblood of any business, many organizations are finding themselves drowning in it,
with no strategy for exploiting its potential.
Recent strategic investments by banks have mainly concentrated on infrastructure and operational environments, but
this is no longer the priority. Instead, banks are realizing the need to understand their customers like never before.
Today’s customer expects – no, demands – to be treated as an individual. And for banks, insight and foresight are the
keys to better serving each customer as an individual.
Banks are on a path to realizing this potential both through the modernization of their decision-making processes
and the ability to harness the ever-growing volumes of data. But there are still challenges ahead. The articles that
follow address both the opportunities and obstacles that the financial services industry may encounter in the coming
months and years as it embarks on this path. By sharing these articles with you, we are sharing both our experiences
and those of other thought leaders as the banking industry looks to embed itself firmly in the digital age, with all the
possibilities and perils that it brings.
Industry-leading SAS® Analytics give organizations such as banks the power to know their customers, their markets
and their risk exposures – and, ultimately, to determine their success. And we will continue to help transform the way
the world works through analytics.
Sincerely,
Jim Goodnight, CEO
1

4. chapter 6
Analytics:
the power
to know
How to Run a Bank
Chapter sponsored and contributed by SAS

5. section index
74 Connecting with customers in a
multi-channel world: Jim Davis,
chief marketing officer, SAS
76 Mitigating banks fraud: finding
the right strategy: Chris Swecker,
independent consultant, Swecker
Enterprises
78 Transforming performance: The
evolution of risk: Myron Scholes,
Nobel Laureate and Alastair Sim,
senior director for global
marketing, SAS
A
nalytics has opened up the world
to new possibilities and consumers’
expectations are changing. Banks
must adapt in the post-crisis environment
by looking at their customers more closely
and using data to gain further insights.
Jim Davis, SAS’s chief marketing officer,
argues that customer behaviour is
changing, but new marketing technologies
are available for banks to better target their
customers and improve relationships.
Chris Swecker, an independent consultant
at Swecker Enterprises, says data is key for
banks to protect themselves and
their clients from fraudulent activities.
Myron Scholes, Nobel Laureate, and
Alastair Sim, SAS’s senior director of
marketing, reveal that risk management
remains high on banks executives’ minds.
They also discuss new approaches to
traditional techniques.
How to Run a Bank
Chapter sponsored and contributed by SAS 73

6. analytics: the power to know
Connecting with
customers in a
multi-channel world
BANKS THAT HAVE PERFORMED WELL customer needs, providing relevant
THROUGHOUT THE CRISIS HAVE products and services cost-effectively and
calculating the unique lifetime value
UNDERSTOOD THEIR CUSTOMERS’ of customers to the institution. Further
NEEDS. BUT THERE ARE STILL emphasising of analytically supported
decision-making, related to multi-channel
OPPORTUNITIES IN THE MARKETPLACE
marketing optimisation and client service,
will be critical to improving customer
F
inancial institutions have certainly experience, loyalty and profitability.
Jim Davis demonstrated their resilience To illustrate this, one US financial
Chief Marketing to challenging economic events institution is incrementally generating
Officer and pressures over the course of modern $250m in revenue by using behavioural
SAS
history. However, the current period of models and predictive analytics to
global economic upheaval has proven comb through more than 19 million
to be one of the most complex evils the transactions per day from more than
financial industry has ever faced, making 17 million customers. With the insight
the road to recovery less of an uphill it derives, the bank delivers consistent
trudge than an endless ride on an anxiety- messages to customers across all touch
fuelled rollercoaster. points and channels. The solution also
While some stability has returned to helps the bank understand and anticipate
the banking industry following an intense future customer needs, using event-driven
period of financial institution collapse technology to alert representatives when
and consolidation, regulatory rigidity and significant behavioural changes occur so
the slow-to-recover economy have severely that the bank can intervene immediately
constrained a bank’s ability to grow its to address a new customer requirement or
revenue and profits, forcing many to re- save an at risk relationship.
engineer their processes to make them Consumer and business depositors will
more efficient and cost-effective. Nowhere be more valuable to the banks than ever
is this more apparent than in retail before; failure to communicate with these
banking, where institutions must refocus customers at the right time, through the
their efforts on improving customer right channel, with the right offer will
service and retention efforts while slowly wear away the client base. Customer
increasing each customer’s lifetime value. communications must be personalised
and interactive and offer tailored products
Understanding customer needs and services. This requires sophisticated
Retail banks that will survive and thrive analytics and marketing automation
How to Run a Bank
in the current economic climate are technology to create customer insight,
using new technologies and channels to increase interactions across channels,
grow revenue from basic services, such and monitor and respond to changes in
as deposits and loans, by understanding customer behaviours.
74 Chapter sponsored and contributed by SAS
4

7. New channels customer relationships through closed-
Social media is one evolving channel loop customer marketing processes with
that will help banks to generate insights a complete view of customers and include
on customer attitudes and preferences, the ability to:
which can be used to inform marketing ■ Collect meaningful customer data from
campaigns and help deliver better all channels, including social media, in
customer experiences. However, an one place.
August 2010 study, conducted by Harvard ■ Apply advanced predictive analytics
Business Review and SAS, shows that for more accurate forecasting and insight
banks lag behind other industries by into customers and households.
10% when it comes to using social ■ Match individual customer profiles to
media to understand and communicate the most relevant offers.
with customers. In fact, 57% of bankers ■ Run intelligent campaigns that account
polled admitted that their social media for different customer interactions.
efforts were ineffective, compared with ■ Learn from campaign results and build
43% of those polled from non-banking lessons back into the process to improve
industries. future marketing and customer service
For banks, social media has its pros and efforts.
cons. One influencer can drive thousands In addition to the belt-tightening effects
of potential customers to a website. of the recession, consumer behaviours
However, that same influencer can and expectations have radically changed
spread his or her dissatisfaction, causing in recent years, requiring banks to
erosion in brand equity and profitability. improve outreach to customers and earn
Regardless, embracing social media is not their trust and good old-fashioned loyalty.
a choice for banks; it is an imperative. To accomplish this, banks have to meet
Fortunately, as social media has evolved, customers where they work and play
so too has the technology to understand – on the web, through mobile devices
users and their networks. The myriad and social media sites. They can then
benefits that come from analysing use the wealth of customer intelligence
social media data include product and that is generated to create new product
service quality improvements, assessing and service offerings, acquire and retain
customer sentiment and uncovering customers, and maximise the profitability
fraud rings. of each relationship.
Improving value
With the increasingly sophisticated
biography
Jim Davis is senior vice-president and chief
customer analytics and marketing
How to Run a Bank
marketing officer at SAS, overseeing various
automation technologies that exist strategic and operational functions. Mr Davis
co-authored the book Information Revolution:
today, retail banks have the perfect Using the Information Evolution Model to
opportunity to improve the value of Grow Your Business.
Chapter sponsored and contributed by SAS 75

8. analytics: the power to know
BANKS CAN NOW CONNECT WITH of fraud incidents through their own
auditing processes.
CLIENTS THROUGH A NUMBER OF
COMMUNICATION CHANNELS. BUT Finding the weak links
FRAUD REMAINS A HUGE PROBLEM Consumers, retail merchants and business
are weak links when it comes to virtual
AND BANKS MUST STAY ONE
security. They respond to phishing schemes
STEP AHEAD TO PROTECT that solicit their most sensitive information,
THEIR CUSTOMERS allow already imperfect anti-virus and
spyware software to expire or disable the
F
inancial institutions are leaders programs, use vulnerable passwords and
in delivering of a wide range of don’t cover their PIN numbers when using
services and products via the an ATM. They are ill equipped to counter
internet and mobile communication botnets, worms, malware and viruses such
channels. Unfortunately, electronic crimes as the Zeus strain, which has stolen more
targeting consumers and businesses have bank credentials than any other virus and
become the most pervasive crime problem is linked to more than $100m in losses
of this millennium. Financial institutions worldwide. These exploits spontaneously
must realise that fraud undermines mutate to stay ahead of the latest detection
customer confidence in the bank’s ability, software.
or willingness, to protect its customers. The latest battleground is business
Fraud rings have proliferated because account takeovers. These accounts
being a professional fraud operator is typically hold higher balances to meet
easy, profitable and presents low risk payroll and daily expenses, and often
and high reward. Ironically, institutions the business customer has weak internal
that pride themselves on fostering safeguards. Businesses are not afforded
collaborative environments are being the same protections as individuals and
out-networked by the bad guys, who thus are often held responsible for losses
work in a communal ecosystem devoted when their accounts are compromised.
exclusively to committing fraud around Businesses are especially vulnerable
the clock. They are adept at exploitation because their information security,
of gaping vulnerabilities caused by online banking protocols and technology
compartmentalisation of fraud detection configuration are seldom as good as they
units and the schism between the lines need to be.
of business and fraud components, One important enabler is that fraud
including inefficient management and receives scarce attention from top
Chris Swecker use of data. Sadly, a recent survey of 230 executives unless a significant negative
Independent banks by the Information Security Media media event occurs. Revenue growth
Consultant
Swecker Enterprises Group revealed that only 23% learn and business expansion are paramount;
Mitigating bank
fraud: finding the
right strategy
How to Run a Bank
76 Chapter sponsored and contributed by SAS
6

9. when it comes to risk programmes, credit,
market, counterparty and regulatory risks
banks must break
trump all others. As a result of scarce anti- down the traditional
fraud resources and failure to deploy the
most effective analytical tools available, separation
fraud rings are able to exploit the bank’s between anti-
inability to ‘connect the dots’.
The FBI warns that professional money laundering
fraud networks, not opportunistic
individuals, are inflicting the greatest
and fraud
damage. These networks exploit the a shared database of historical alerts,
‘one fraud at a time’ detection tools and red flags, investigations, watch lists and
technologies. Balkanisation of fraud customer claims can help combat fraud.
detection components based on product Components that cannot be consolidated
lines and delivery channels, technology should at least share a case management
architecture that resembles a patchwork system.
quilt and overall fragmentation of anti-
fraud efforts severely hinder the ability to Prioritising the customer
identify ring activity and deploy effective Once and for all banks must break down
loss prevention strategies. Finally, industry the traditional separation between anti-
co-operation must be established. money laundering and fraud. As the chief
Identity impersonations account for of FinCEN has pointed out, fraud and
more than $50bn in losses and directly money laundering are co-dependent. An
affect close to 12 million people annually. effective anti-fraud strategy should focus
Customers expect banks to protect them on expending resources on the greatest
from this nightmare. Consider the highly problems, not just the next alert or case
publicised Heartland Payment Systems/ that shows up in the case management
TJ Maxx hacks, in which more than 140 system. The organisation must prioritise
million credit/debit card transactions and direct scarce resources toward
were compromised, affecting more than events that present the largest losses in
500 banks and countless customers. the aggregate, such as ring activity, and
the greatest potential for recovery and
Using data to prevent fraud prosecution.
From the perspective of bank risk Ironically the tools and capability to
executives, anti-fraud programmes are more effectively prevent and mitigate
low priority because a lack of positive these losses are available. Banks must
revenue and losses are built into budget develop a sense of urgency because their
projections. They discount the impact customers will continue to be easy victims
and reputational risk presented by a without decisive action. The ranks of fraud
well-publicised negative experience on a thieves are increasing every day due to
mass scale. They should view anti-fraud internet networking opportunities and
strategies as a priority, not because of the the low risk of prosecution.
monetary losses that are ‘acceptable’ from Fraud has become viral and will never be
a balance sheet perspective, but rather solved by law enforcement. It is an industry
because current and potential customers solution dependent on the awareness and
feel vulnerable and exposed. Banks that sponsorship of bank executives at the
fail to protect customers will lose them to highest levels. They must deploy the most
competitors that grasp the problem and powerful analytics available, consolidate
the potential opportunity. data and various fraud components,
Fortunately, the banks themselves hold and make use of multilayered detection
the most powerful weapon to predict and technology. It is not about the money; it
prevent fraud – data. Banks hold a rich is about the customer. The customer must
trove of information about customers, feel important and protected. After all, it
transactions, accounts and broader trends is just good business to protect your most
and patterns. The effective use and analysis important asset.
of that data – real time and batched –
can identify fraud patterns, anomalies
and common data points that reveal biography
associations between fraudulent accounts
Chris Swecker is a practising attorney and
and group fraud activity. One best practice independent consultant for Swecker Enterprises,
is to form a small ‘ring identification team’ specialising in financial crimes and money-
laundering mitigation strategies and is a
to proactively identify the malignant social
How to Run a Bank
frequent guest expert speaker. He has 30
networks. Also, the consolidation of fraud years of experience in law enforcement,
national security, legal, corporate security
detection and investigative components and risk management positions including
the third highest executive position in the FBI
into a single platform and creation of and chief security officer for Bank of America.
Chapter sponsored and contributed by SAS 77

10. analytics: the power to know
Transforming
performance: the
evolution of risk
everybody’s concern and there needs to
RISK HAS EMERGED AS AN IMPORTANT
be a greater role for the risk function on
PART OF THE EXECUTIVE BOARD, AND the executive board. Ownership of the
BANKS NEED TO MOVE AWAY FROM cultural change required to embrace risk
across the institutions going forward has
TRADITIONAL TECHNIQUES AND
to be driven by the CEO. Only then, by
ADAPT TO THE NEW ENVIRONMENT determining the tone at the top, will the
elements of this complex puzzle begin
A
s a result of the recent market to come together. So what have been the
Myron Scholes shocks, banks, capital markets elements used to manage risk and how
Nobel Laureate firms and asset managers are should risk management evolve?
rethinking certain issues and focusing on
integrating risk and reward trade-offs. To Risk and return
do this, they are using portfolio theory Risk management has traditionally relied
and planning for market shocks and the upon expert judgement coupled with a
resulting impact on the business and narrow use of quantitative techniques.
its divisions. Leading financial entities These techniques are being replaced
are linking their portfolio risk with the by sophisticated analytics that make
return on capital and integrating market traditional quantitative techniques more
liquidity into their analyses in an attempt transparent and available to decision-
to gain a more complete view of risk and makers by combining them with an
return. As a result, optimisation of capital analytic decision framework that is
deployed – rather than just a single view optimised for exposures and capital return.
of risk exposures – has become the new Predictive, on-demand scenarios provide
role of risk management. an up-to-the-minute, scenario-optimised
Alastair Sim
A recent survey of senior executives from view of risk and return, allowing executives
Senior Director
Global Marketing more than 300 global financial services to understand and integrate capital to
SAS institutions, carried out by the Economist various asset classes and divisions of the
Intelligence Unit on behalf of SAS, firm. By incorporating all elements of the
revealed that one of the most important risk and reward equation – exposures,
concerns of executives was a desire to return, capital reserves, capital deployed
restore credibility in institutions, systems in various forms, firm liquidity and market
and the industry. In the resulting report, liquidity – we now have the opportunity to
‘Rebuilding Trust’, strategic changes were provide and grow high-performance risk
identified. Better communication and management capabilities within firms.
analysis of information across the firm and As we continue to emerge from the
How to Run a Bank
communications between the executive global financial crisis, not only have banks
team, the risk function and the business had to boost capital reserves, but the
was seen to be of great importance. impact of sovereign nation debt has also
Management of risk needs to be seen as constricted the flow of capital. This has
78 Chapter sponsored and contributed by SAS
8

11. the potential to heighten the impact of
market volatility, and with unanticipated
traditional
events, we are anticipating that there is techniques are
the potential for an amplification effect
of the volatility and market shocks. The
being replaced
ability to acquire capital for investment by sophisticated
or to liquidate a position may accelerate
more default events over the next few analytics which
years as markets adjust to systemic
changes in the market structure.
bring transparency
Although most firms use dynamic
measures such as VaR to gauge the simply maximised along a truncated view
sensitivity of results to short-run market of possible investment paths, assuming
factor movements, they realise that they that recent volatilities and observed
need to overlay these measures with correlations were the best indicators
additional capital and static reserves to of future volatility and correlations.
handle shocks. Correctly, entities realise Additionally, firms viewed planning for
that short-term measures are inadequate. shocks and changes in the opportunity set
However, new work is needed to measure as unnecessary or of little value. Risk had
the size of needed risk reserves or cushions; been tamed, and risk officers had cried
that is, how to dynamically adjust them wolf too many times to be heard. It turns
and partition the cushion among the out that observed low portfolio volatilities
various asset categories within an entity to largely contributed to low observed
make more accurate risk and return trade- correlations. As a result, regulators and
offs. This is a new direction for research. market participants believed that the
The ability to enhance risk methodologies risks observed years ago were the risks of
is due to advances in technology, the past; risks today were ‘understood’ and
such as the SAS high-performance would remain as such into the foreseeable
computational environment, that remove future. Market participants responded
the computational complexity associated to this belief by increasing their own
with multifactor, cross-firm, full-valuation risks through leverage, concentrating
methods. holdings (becoming less diversified)
and holding riskier positions, and
Advantages of diversification reducing contingency reserves for shocks.
Moving from theory to implementation Contingency reserves were reduced
issues, market participants relied too because risk could be either diversified or
heavily on recent market experience distributed through securitised products.
(during the 1990s and 2000s) to frame Flexibility planning in the form of capital
their views on risk and to calibrate their optimisation became less necessary with
models. They concluded incorrectly that reduced uncertainty.
the likely need and the resultant cost to
adjust their holdings – and to reduce risks Advances in analytics
in light of shocks and lack of liquidity in If risk had been controlled, these were the
the market – were extremely low. They correct planning decisions. In retrospect,
relied almost exclusively on the advantages relying too heavily on recent data – and
of diversification across uncorrelated firm even ignoring recent minishocks – was
activities and concluded that risks were the wrong decision. We had gone through
controlled within the isolated portfolios; a long period of market quiescence;
they relied too heavily on a limited set of risk had not been tamed. The business
quantitative techniques to measure and cycle remains; datasets are too vast
to plan on how to react to unexpected to understand all of the interactions
market conditions. necessary to tame risk unless advances in
They also relied extensively on analytics and technology are applied.
external monitors, such as the rating Today’s high-performance computing
agencies, to validate risks. The rating transforms the ability to address complex
agencies failed to incorporate multiple, and often volatile business problems.
simultaneous failures in their models; This is a new era in managing risk and
they also overlooked the fact that recent business performance.
market event data might not tell the
complete story, or that the quality of biography
Myron Scholes is widely known for his decisive
the composition of structured products work in options pricing, capital markets and tax.
might deteriorate over time as entities He is the co-originator of the Black-Scholes options
How to Run a Bank
pricing model, which earned him the Alfred Nobel
reverse-engineered them to ‘just pass’ to Memorial Prize in Economic Sciences in 1997.
receive a rating of ‘AAA’. Alastair Sim is a member of the global marketing
board at SAS and responsible for the strategy and
Therefore, the problem is that firms marketing in EMEA.
Chapter sponsored and contributed by SAS 79

12. technology
High performance
banking technology
LINKING TECHNOLOGY FLOWS ALLOWS
well-made
FIRMS TO ASSESS THEIR RELATIVE
business decisions
EXPOSURES. NEW TECHNIQUES ARE
PROVIDING FINANCIAL INSTITUTIONS
are backed by
THE ABILITY TO MODEL REAL-TIME analytics that
DATA AS THEY STRIVE TO MEET NEW extract relevant
Jim Goodnight
REGULATORY REQUIREMENTS and insightful
factors needed
I
Chief Executive
Officer
SAS
n a recent conversation with the head
of risk analytics for a large global to assist decision
bank, a comment was made that
is was a very good thing that the Dubai
makers
debt crisis of November 2009 happened to truly understand the performance of
over the US Thanksgiving holiday – the the capital available to a bank, has caused
banking executive (who is located in the bank managers to either aggressively
US) was thankful he was able to call all extend credit or to not participate in the
his employees back into the office on that market due to a lack of information. Due
Thursday. partly to the limitations of traditional
The Thanksgiving holiday and the reporting and ‘computational’ technology,
following weekend were used to prepare banks have only been able to increase their
a detailed, cross-firm analysis of the use of analytics within certain silos of
entire bank’s global exposures, liquidity product offerings, but have not yet reached
and capital available. It took an army of the goal of having ‘on-demand’ firm-wide
executives selected from various business capabilities.
units, risk teams and technology support The ability to do cross-product scenario,
groups three gruelling days to consolidate stress-testing and firm-wide analysis of
the exposures, stress test the portfolios required liquidity for funding of products
across all products and validate the capital and analyse impact to capital required for
position. What typically took two weeks to economic growth and to meet regulatory
compute was compressed into four days. requirements is still a goal many banks
Teams of people worked in round-the-clock and financial services firm are striving
runs of technology systems to calculate for. Market events such as the Dubai debt
new views of risk and exposures. Hours crisis or even the Lehman bankruptcy
of technology processing were required have left banks and other financial firms
to recalculate the updated market pricing scrambling to answer the questions of
formulas with new factors, run new market what exposures do they have on hand?
scenarios and sensitivity analysis and What will be the impact on capital? How
produce reports. The team barely made the can I stress test the ‘firm-wide’ view of
deadline set by the CEO for a review on the what assets are currently on the balance
Monday following the holiday. sheet to determine if additional losses are
impending?
How to Run a Bank
Managing information
Not being able to wholly integrate the full Finding the answer
cycle of credit management, combined with A high-performance banking technology
the failure of market portfolio management framework is the answer. Key elements
68
10 Article sponsored and contributed by SAS

13. CEO Agenda
1. Modernisation – the
pace of change in market
conditions has dictated a
step change in the desire to
integrate risk types across
the business.
2. Better business
decisions are based on an
ability to see current state
and remodel for future states
in a high-performance
environment.
3. High-performance
technology – combining
model accuracy, integration,
volume and speed.
4. Optimised – advances
in analytical model
technology allows ‘real-time‘
include computing what you need to know Well-made business decisions are backed optimisation of risk.
today – questions asked today cannot be by analytics that extract only the very
answered with ‘stale’ information that relevant and insightful factors needed to 5. Competitive advantage
was computed yesterday. Some historical assist the decision maker in their business. – high-performing banking
factors need to be archived and utilised Advances in analytical model development technology concentrates
for the back testing of assumptions but technology and methods exist today that on increasing the value
a high-performance banking technology keep sophisticated models ‘fresh’ with the delivered to people who
solution relies on the ability to combine principle factors to make better decisions. make decisions.
historical events, allows for the insertion Model variables can be ‘optimised’ in real-
of new factors and to compute in real- time as market conditions change.
time the ‘next’ iteration of the answer to The impact of a local business unit
the question being asked. decision can only be accessed for ‘firm-
wide’ impact when provided the capability
New technology to aggregated information in real time.
Radical new technology exists right now Transactional systems and the reporting
that goes beyond the computational available from these systems has evolved to
advances that GRID technology represented the extent that with the use of proper data
a few years back. Advanced technology that quality and monitoring tools, confidence
integrates the computational matrices for can be applied to the data used for decision
sophisticated analytics directly on to a CPU making. What a high-performance
rich processing environment is a reality technology approach allows for, is not only
for today’s banks. Entire data centres of the rapid integration of these data sources,
traditional servers can be replaced with but also the ‘real-time’ aggregation of the
an ‘appliance’ type of technology that results of computational and analytical
provides integrated software and hardware models. Traditional ‘cube’ technology still
– providing an analytics ‘analysis’ machine takes hours and days to update once the
reducing days to minutes. results from the analytical models have
Business decisions are made within been computed. Advanced technological
established methods – focus on getting the methods are available today in an ‘on-
key factors to support decision processes demand’ manner to provide results to
in place – do not focus on having all data business users as dynamically, updated
available. The traditional transaction analytical information is produced.
and reporting approach that has been
a part of the banking industry is still a
necessary part of the banking business.
biography:
How to Run a Bank
Dr Jim Goodnight is CEO of SAS, the world’s leading
Operational reporting is different from business analytics software vendor. Dr Goodnight
has been CEO of software vendor SAS since its
the predictive analytics used for helping incorporation in 1976. He is an active speaker
business leaders make today’s decisions. and participant at the World Economic Forum.
Article sponsored and contributed by SAS 69

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