Every organization learns through experience, but the smartest organizations also learn from the experiences of others. U.S. banks are going through a tumultuous period due to the uncertain outlook and unstable current situation of the global economy. It is more important than ever for banks to choose an anchor point which keeps their clients and investments safe while still ensuring that all the opportunities provided by the market being availed. Peers in the U.S. banking community have thus become an important point of focus for managers that want to chart a safe course out of the current rocky waters for the future of the banks.

Every business keeps track of how their competitors are doing but to truly turn this knowledge into a strategic advantage, businesses need to codify the process of peer benchmarking. Almost every institution operating in the banking industry in the U.S. publish reports about their performance. These reports contain a treasure trove of data that can deliver amazing insights.

Every business keeps track of how their competitors are doing but to truly turn this knowledge into a strategic advantage, businesses need to codify the process of peer benchmarking. Click To Tweet

Unearthing Insights

Uncovering all these important insights manually is impractical for a lot of reasons. If this task is handled manually by an employee, it may take them many days to complete the reporting. Computers can handle the same task in a few seconds and provide instant notifications and updates to the organization. This exponential increase in efficiency allows bankers to get automated dependable data metrics.

All these data metrics are displayed on executive dashboards accessible by all the assigned stakeholders in the bank. This results in a paradigm shift in the way a bank operates. Instead of sitting and discussing what the other banks are doing and how they are performing, the discussions discuss what the bank should do to fight off the competition – because information about what other banks are doing is already visible to all the stakeholders.

This approach also takes a lot of guesswork and opinions out of the process. Management no longer has to go by the personal assessments of employees. They can instead look at data metrics and get an instant assessment of the market situation.

How Data is Changing Banking

Data has always been one of the most important things for banks. Some of the first corporate computer systems were installed in banks and financial institutions for better accounting and analysis. Every bank in the world uses data about clients and the market – freely available in their own data base or publicly – to create forecasts, models, and much more. However, what is changing is the ability of a bank to personalize the analytical processes on data and the ensuing insights.

It was always possible to look at the reports published at the other banks, but the customization that is now possible with the data allows bankers to slice and dice the data to gain insights that were never possible before. Modern banking management systems allow bankers to select the metrics that they care about the most from a long list, get data related to those metrics from other banks, and then compare those metrics to the internal data of the bank.

This creates an intelligence feed which continuously tells bankers not just how their bank is performing, but how it is performing in the areas where they are competing with other banks. This comparative peer benchmarking alerts banks to any competitor that is performing better than the average and then analyze them to see what makes them different. Technology has enabled banks to take the next step in data analytics; instead of simply looking at the latest data, the data is being combined and analyzed in real-time for personalized insights and recommendations.

As bank technology advances, resulting in smarter risk and compliance management solutions, we can expect data to play an even bigger role in the way banks are governed. We already have compliance and risk management solutions that keep track of important metrics and automatically highlight any problematic trends, thus ensuring that problems are discovered and solved as quickly as possible. Sophisticated bank management solutions have gone beyond increasing the speed of current banking processes and are now introducing new functionality and much more.

Data, Automation, and Smarter Banking

The fast pace at which banking technology is developing will result in banks that rely more on automated intelligence. Many of the banking processes which were traditionally manual until a few decades ago, such as transaction verification, have already been automated. As the sophistication and capabilities of banking technology increases, automation will become more common in governing the bank as well.

Wondering how your bank can get better peer insights? Get in touch with our risk experts to see the Predict360 Peer Insights solution in action and ask about a free trial.