How smart companies are using information to become more competitive and profitable

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Insights analysts are typically charged to perform analysis and discover new insights that can generate new business by identifying new customer and market trends or generate cost savings by discovering the root causes for inefficiencies.

If insights are discovered in a timely manner, they can create new opportunities for monetization by revealing new customer needs, new customer segments for targeting, emerging consumer behaviors and purchasing trends. Time is of the essence in the business of discovering insights, since opportunities create competitive advantage only for a short window of time – until the competitors discover them. Hence, those types of analysts need a lot of flexibility to get the job done quickly. For this reason, they:

  • Combine various data sources, both internal and external, to be able to glean new insights from a larger variety of data sets;
  • Use visualization to explore the data quickly; and
  • Craft stories to convey to the business decision makers the insights which they gleaned from the data.

Business intelligence case study: First Rate Investments

As the managing director and general manager of the Products group at First Rate Investments, Deborah Repak and her team have decades of experience measuring portfolio performance and calculating rates of return. Since 1991, wealth managers and financial advisors around the world have depended on First Rate Investments to deliver portfolio information to their customers. The Arlington, Texas-based company has created a web-based performance measurement solution that reveals investment details for millions of portfolios.

Look for opportunities to transform data into meaningful information that makes someone’s life better

On January 7, 2015, Deborah was talking with a couple of prospects when a light bulb went off in her head. “The prospects explained how they have to extract data out of their current system to create complex spreadsheets, and then summarize it manually with Microsoft Excel,” she recalls. “It was clearly a laborious way to get to the information that they were looking for.”

Using data to support decision-making

“I was looking at their spreadsheets and I realized that they needed more than just a new set of reports,” she recalls. “What they really needed was some type of analytic portal or app that would let them view their data from the top down—and then drill into exceptions based on whatever criteria they were looking for. These prospects didn’t just need a system that could respond to queries and spit out data. They needed interactivity so they could see trends and filter data to get answers. They didn’t just need to expand their information-access capabilities,” Deborah adds. “They needed to expand their decision-making capabilities.”

Monetizing data

First Rate has gained a solid foothold in the wealth management space the old fashioned way: by crunching data, lots of it. They have built a prosperous business around reporting on data points for wealth managers and broker dealers—either one account at a time or for selected groups of accounts. Each evening after the market closes they receive holdings and transactional records for more than one million accounts. They use Information Builders iWay integration technology to move the data into their systems and they use Information Builders WebFOCUS to generate performance-return records for each holding, asset, and style class in each account. On average this involves building and storing more than 750 million account-return records in about six hours, which works out to 35,000 returns per second.

“We are sitting on a treasure trove of information in our databases, and we asked ourselves: How can we help our clients glean insight from all of this data?” Deborah recalls.

The answer came with an InfoApp called ExecView that transforms this massive data set into informational data points that help clients figure out how their businesses are trending.

Helping customers to obtain insights from data – a new business is born

Deborah and her team wanted to develop a system that would make it easy for clients to obtain insights on their own. She later described it as the “a-ha moment” that launched a new and important business venture for her firm.

“It suddenly occurred to me that we had to shift our perspective,” she continues. “The clients thought they wanted a set of custom reports but what they really needed was an interactive portal that would help them get rid of paper and simplify crucial decisions.”

The central tenet of the vision was simplicity: greater ease of use would mean less data mining, no tedious analysis, and no ad hoc reporting. With an InfoApp, you simply get the answers you need.

First Rate Investments Products team built the ExecView self-service portal with Information Builders WebFOCUS.

“We iterated back and forth with several clients to create the ExecView portal,” Deborah recalls. “This is where WebFOCUS really shines.”

Once First Rate’s existing clients saw the first iteration of this new InfoApp, the real excitement began. They especially loved the power and control that comes from being able to get answers themselves, without getting bogged down in data analysis.

“They thought of lots of ways to view the data,” Deborah reports. “For example, ‘Show me all the fees I’ve collected for this set of accounts’ or ‘Show me the top 10 holdings across selected domains.’ There were numerous questions they could suddenly answer with this self-service application.”

Using data for competitive advantage

What began as a customized product for one client quickly turned into a general-purpose product that First Rate could sell to broker dealers and other types of financial services companies.

“We are getting new prospects like crazy,” Deborah enthuses. “Our competitors don’t have a tool like this. We can identify risk and return outliers in a very fast and efficient way.”

For example, an investment firm can use the ExecView app to determine what may be driving increased revenue through fees, or look for areas where accounts and assets under management (AUM) may be decreasing. It allows them to run checks-and-balances on individual investment accounts and to fix accounts that are out of line.

Ensuring scalability

All types and sizes of financial firms can benefit from ExecView, whether they are managing 200 accounts or 2 million. Users include individual registered investment advisors (RIAs), oversight officers, and regional officers who manage or oversee large groups of accounts.

First Rate’s versatile system can scale with the data without compromising functionality. This is the hallmark of a well-designed InfoApp: it simplifies complex processes and speeds up the process of attaining insights via self-service techniques.

Supporting compliance

ExecView helps wealth management firms comply with Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) requirements by shedding light on trends and practices that might otherwise be overlooked. Data visualization techniques within the InfoApp make it easy to absorb the data, detect pertinent trends, and take appropriate action.

Using data to increase customer loyalty

The goal is to eliminate the cost of erroneous decisions and increase customer loyalty.

For example, if a customer support representative can quickly retrieve all the relevant information about a customer—while servicing that customer—then the app will improve the customer experience. ExecView summarizes that data so the broker can follow unique paths of inquiry. Users have up-to-the-minute statistics on what is happening across a broad set of accounts. Previously, they either couldn’t get that information or it was stale, manual, and fraught with errant calculations.

The goal is to eliminate the cost of erroneous decisions and increase customer loyalty

According to Deborah, it is difficult to create risk-return reports with standard deviations across tens of thousands of accounts, but ExecView can create these reports within seconds. That’s a game changer for oversight officers who are responsible for a group of investment managers or a group of accounts. Compliance and oversight are also important as financial services companies respond to regulations governing how their financial software is created and used.

Quantifiable gains in efficiency and revenue

One of First Rate’s clients used to spend a lot of time creating concentration reports that identify accounts that are holding more than 40 percent cash in their portfolios. Deborah recalls the “eureka moment” when this client first got a hold of ExecView. “When they saw how ExecView could automate these inquiries, they told us it would save 30 hours per month for anybody involved in these routine activities.”

Using data to add value and grow business

ExecView is also a “foot in the door” for prospective clients that may have their own reporting engines. “From a monetization standpoint, ExecView has resulted in a 10 percent uptake in our revenue per year as a value-added service,” she adds. “This tool gives them management oversight, even if we’re not the vendor who is providing their reporting solution. That’s an exciting avenue into new client relationships.”

When asked if she has any words of wisdom to share with colleagues facing similar analytic challenges, Deborah is quick to respond. “Look for opportunities to transform data into meaningful information that makes someone’s life better,” she sums up. “The joy we have experienced as a team in knowing that our solutions are giving our clients greater transparency and the ability to make intelligent decisions is really amazing. It feels good to know you have built something of value and that you’re able to grow your own business while you’re also helping your clients be successful.”

"This is an edited extract from "Organizational Intelligence - how smart companies use information to be more competitive and profitable" (https://www.amazon.com/Organizational-Intelligence-Information-Competitive-Profitable/dp/0692769595)  by Gerald Cohen and Dr Rado Kotorov (published by Information Builders)."

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