Are We Ready For Agile BI?

[Doug Heywood]

Blog: Agility Means Cause and Effect Happen Quickly; Are We Ready?

Michael Hugos 30 September, 2008

Banks and other financial organizations have certainly been agile these last seven or eight years as they maximized the number of mortgages they sold. Now we're learning that agility also implies we better be able to cope with how fast things happen. As we the people all participated in the first great real estate boom of the 21st century, banks responded and gave us what we asked for (whether it made any sense or not).

Cause and effect follow each other quickly. It’s a lot harder to separate our words from our actions and the consequences that result from them. The real-time feedback loops that drive our economy are mirrors showing us who we really are even as we try to pretend to be somebody else. The real-time economy and the agility it demands is like the genie who quickly gives us what we ask for – so we better learn to be careful.

If banks make money from selling mortgages and if regulations are relaxed on who banks can sell to and what products they sell, then banks sell more mortgages and worry less about who buys them. We miss the point when we call banks’ behavior unethical; it was we the people and our elected government that relaxed the regulations on what the banks could do.

We gave them license to behave foolishly; and they did; and we benefited from their foolishness (for a while). Did we want everyone to get mortgages and “realize the dream of home ownership” so that there would be more and more buyers in the real estate market and thus keep driving up the prices we could charge each other for our properties? (I don’t remember if I was once in favor of something like that myself. If I was, I’m sure there were reasons why it seemed like a good idea at the time.)

The financial services sector spends more on IT than any other business sector so it’s not that they didn’t know what was happening; it’s just that there was no good reason until now to care about it. Business intelligence systems can tell you what’s going on, but how you react to that news depends on what your motivation is. And we all know motivation is largely determined by where the money is and the regulations about how to get it.

An agile enterprise is like a heat seeking missile; it locks onto the money and moves fast as it follows that money. A global economy composed of companies like this is much more volatile than the industrial economy of the last century. Regulations that define where the money is and what is legal and permissible to get it are the real time business rules that drive our economy.

We could have said we wanted the greatest possible home ownership and also said we don’t want banks lending our money in mortgages where people spend more than 30 percent of their annual income on mortgage payments. Banks would then have applied their agility to sell the maximum number of loans within those limits and that simple rule would have prevented most of the bad mortgages.

But it would also have restricted the number of real estate buyers and prevented the big run up in prices and lots of speculative opportunities and quick profits. Hmmm...what was it we were asking for then and what do we want now? Are we ready to put our money where our mouth is?

[Jo Vincent]

HSBC improves real-time fraud management

Protection against branch banking, bank transfer and online payment fraud

By Carol Ko 09 Jun 2009
HONG KONG – HSBC has deployed a real-time fraud detection system to combat fraud across multiple lines of business and channels.

The bank is implementing SAS Fraud Management system to step up the bank’s protection beyond the credit and debit card fraud. SAS is a US-based business analytics software and services provider.

HSBC Holdings has more than 100 million customers worldwide through around 10,000 offices in 86 countries and territories in Europe, the Asia-Pacific, the Americas, the Middle East and Africa. With assets of some US$2,527 billion at 31 December 2008, it is one of the world’s largest banking and financial services organisations.

Real-time monitoring

The real-time fraud detection system is said to enable the bank to monitor activity at the customer, account and channel levels, resulting in further protection against branch banking, bank transfer and online payment fraud, as well as internal fraud. It represents part of SAS’ continuing investment in helping financial institutions to reduce fraud.

With the new deployment, HSBC is expected to gain benefits from enhanced reporting and rule writing capabilities, resulting in greater detection rates and continued reduction of false positive rates. By monitoring behaviour at the customer level, the bank will gain more streamlined and efficient use of its investigative resources. The bank will also continue to use SAS’ alert management, routing and queue prioritisation software to maximise efficiencies and allow the highest priority alerts to be worked on quickly.

Derek Wylde, head of group fraud risk, HSBC, said: “We are keen to continue our investment with SAS having seen success with SAS Fraud Management in credit and debit card fraud protection and experiencing SAS’ flexible and innovative approach to fighting fraud. As a testament to this, we have chosen SAS as our solution for enterprise fraud management and are expanding our protection over other areas of fraud with SAS’ software. We’re also delighted that HSBC customers around the world are now benefiting from the same level of fraud prevention and detection success we originally saw in the US.”

Since its initial US launch in 2007, HSBC has implemented SAS Fraud Management across the US, Europe and the Asia Pacific. Hong Kong, Philippines, Singapore, Thailand, Macau, Brunei and Sri Lanka are all now using it to protect 100 per cent of their credit card transactions in real time. HSBC UK, including First Direct and M&S Money, is using the solution to protect all of its UK credit and debit cards. With this, SAS and HSBC are now realising the original joint-development vision of an enterprise-wide risk management system.

John Foulley, head of banking financial services solutions at SAS Asia Pacific, said: “Despite growing investment in fraud prevention in Asia Pacific, card fraud is a growing issue and fraud schemes are becoming increasingly sophisticated. Common issues in this region are application, identity and card fraud. The challenge is for banks to ensure they have dynamic and integrated fraud detection mechanisms in place that are geo-specific.”

[fgeorge]

Accenture, 11 December 2008
Most U.S. Companies Say Business Analytics Still Future Goal, Not Present Reality

Many companies still working to increase investment, use of business analytics
NEW YORK; Dec. 11, 2008 – Two-thirds of large U.S. companies believe they need to improve their analytical capabilities and only half believe they are spending enough on business analytics, according to findings of an Accenture (ACN: NYSE) survey released today. The survey of more than 250 executives is the basis of a report, “Competing Through Business Analytics,” which studied companies’ use of and investment in analytics to remain competitive.

While more than half (57 percent) of companies surveyed said they don’t have a beneficial, consistently updated enterprise-wide analytical capability, nearly three-quarters (72 percent) said they are working to increase their company’s business analytics usage.

“These findings show that business analytics prowess will be a high priority in the boardroom in 2009 and beyond,” said Royce Bell, chief executive officer of Accenture Information Management Services. “While executives understand that companies with enterprise-wide business analytics have an advantage over those still relying on nebulous sources to make decisions, they face institutional challenges to reforming their processes across the board. Leading organizations are moving from a siloed approach to more inclusive information management programs that work across the entire company.”

The survey also addressed the balance between using analytics and using judgment to make important business decisions, and found 60 percent of major decisions are based on analytics and 40 percent are not. The reasons executives cited most often as to why 40 percent of major decisions are based on judgment rather than business analytics were: because good data is not available (61 percent); there is no past data for the decisions and innovation they are addressing (61 percent); and their decisions rely on qualitative and subjective factors (55 percent).

The challenge to moving from “gut decisions” to employing data goes beyond just infrastructure investments. Large businesses also face a glaring human resources challenge, as 23 percent of respondents identified “insufficient quantitative skills in employees” as a main challenge to their company, and 36 percent said their company “faces a shortage of analytical talent.”

“There’s a strong concern over the future lack of analytical skilled resources,” said Bell. “The shortage in new talent adept at business analytics is stark and will pose a growing challenge as businesses remain committed to honing their analytical capabilities to enable them to make more well-informed decisions. Our findings indicate that some businesses have neither the systems nor the personnel in place yet, although their goal is to achieve this soon.”

The survey also found that institutional hindrances need to be addressed to improve business analytics capabilities. For instance, 39 percent of respondents said that IT capabilities restrictions were a major challenge and 27 percent said there was an inability to share information across organizations within their company.

A concurrent study of firms based in the United Kingdom found many similar results. For more information on this study and Accenture Information Management Services, please visit Information Management Services: Enterprise Information Management Solutions from Accenture.

About the Survey
As part of a survey to gauge the challenges related to business analytics adoption and the anticipated future investments in information management systems to garner advanced data analysis capabilities, Accenture conducted a quantitative online survey in July of 2008 of 254 executives with the title of manager or higher at companies with reported revenue of more than $500 million in calendar year 2007. Respondents were from a variety of industries, with those working in education, government, or non-profit or trade associations excluded. The survey was part of the ongoing work of Accenture Information Management Services, which is focused on integrating and managing all the diverse information assets necessary to plan and run a high-performance organization.


About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 186,000 people serving clients in over 120 countries, the company generated net revenues of US$23.39 billion for the fiscal year ended Aug. 31, 2008. Its home page is Global Management Consulting, Technology and Outsourcing Services from Accenture.