Before the BI in banking manual systems were prevalent because the computers were not used extensively and this was when the banking operations were small and limited mainly to branches. The non-computerized system of banking involved the manual recording of branch transactions. The generation of rudimentary reports from the manual ledgers and were consolidated with those of other bank branches into a final report for the bank as one comprehensive transaction. In this case the BI was limited to simple reporting of banking transactions only (Troy, 2010). As the banking sector grew in size, geographical footprint and channels their transactions, jumped multifold. The manual reporting was time consuming and filled with redundancy and error prone, it proved unequal to the task and paved the way for automated systems. The bank began to wholly depend on technology to manage large volumes of data. As result of adapting technology and growth of banking the computers were widely used to eliminate the errors that were introduced by the manual systems. The introduction of the modern BI has led to innovation of management information system (MIS) that helps top analyze the data that gave insightful meaning (Troy, 2010).
Methodologies used in banking
Measurement: it is a program that develops a hierarchy of performance metrics and helps the banks to benchmark to inform the top management about progress towards enterprise objective.
Analytics: it is program that builds quantitative processes for an enterprise to arrive at optimal decision and hence able to perform business Knowledge Discovery. It frequently involves data mining, predictive analytics, statistical analysis, business process modeling and predictive modeling (Yarong & Ling, 2006).
Enterprise Reporting /Reporting: this methodology is a program that builds infrastructure for strategic reporting to provide the strategic management of the enterprise and not operational reporting. Frequently entails data visualization, OLAP, Executive information (Troy, 2010).
Collaboration platform: it is a program that gets various areas both inside and outside the enterprise to work together via data sharing and electronic data exchange.
Knowledge Management: it a program that make the enterprise data driven via strategies and practices to identify, represent, create, distribute and it enables adoption of insights and experiences that are actual business knowledge (Yarong & Ling, 2006).
Advantages of BI
Historical Analysis-Time Series
In order for the banks to plan for the future of their business they need to analyze their historical performance over the time. The indicators of the bank performance include deposits, income, and credit profit, number of accounts, employs, and expenses. The exact figure are required in order to determine the right figure to work with hence the manual system may not be applicable in such situation and hence it pave the way for the BI. The income can be broken into small...