Unlocking new financial insights by building a bank’s cutting-edge data analysis and forecasting model

Make no mistake about it: data is the new currency. In modern finance, nuggets of digital information can be as precious as almost any other asset on a bank’s books – as long as it is used effectively. 

Both risk and return are affected by the quality of a financial institution’s data modelling system. Everything from risk management, regulatory compliance, and fraud detection can benefit from having rigorous and robust infrastructure in place. The other side of the coin is that banks can profit from customer insights more effectively, increase operational efficiency, and improve their strategic planning and decision-making. 

In such a fiercely competitive environment, any opportunity to steal a march on rivals is gilt-edged. As banking also continues to get more complex, it is becoming ever more important to have systems that connect departments and can evaluate the past, present and future. 

Leaders at one bank in the GCC (Gulf Cooperation Council) region understood the importance of data but were not getting the value they wanted from their system. Departments operated almost like silos, with synergies not being seized upon and making compliance more challenging than necessary; it was clear something had to change. 

Fortunately, those in charge had a clear vision of what they wanted – a model to make processes more objective. Unfortunately, they did not have the technical expertise in-house to create a new financial data modelling platform from scratch. 

Given the short-term need for a consultant experienced in developing and implementing financial data models, the bank engaged Hyphen to find the right person for the task. 

The professional engaged for this project possessed more than a decade of consulting experience but, more importantly, he came equipped with a proven track record in the banking sector. 

Having previously developed a large-scale dynamic model for an international banking group, oversaw the creation of multiple complex systems for a mega-project, improved performance management at two European banks, and implemented a new model at a financial institution in Asia, he was the perfect candidate. 

Our client set out what they wanted from the outset: a data model that could make processing more objective and could incorporate economic and financial market drivers. What’s more, they also wanted it to be able to produce financial statements five years in the past and future, as well as scenario analysis capabilities and more. 

As well as building a digital solution with these outputs in mind, our contractor also had to consider the inputs – namely, the information that would be integrated into the new system. Cleaning the data was a necessary step that took time but was useful in providing an opportunity to gain clarification on some material and look at existing processes. 

Once the data itself was prepared and the company supplied with details of its desired data structure, our professional partner utilised his experience to swiftly develop an early version of a new model. This was then amended and fine-tuned after feedback from senior client figures.

With the big-picture work coming together, our professional partner looked to incorporate additional granularity into the design to help improve decision-making at a departmental level. 

Meetings with individual divisions provided additional context on what internal stakeholders needed to get the most out of the new system. As a priority area for the company’s future, the retail banking arm was particularly active and engaged in the process, which in turn helped our consultant finesse the model to meet their requirements. 

Just as important as adding the requisite amount of granularity to the model, the meetings also helped obtain buy-in from prospective users. Ahead of what would be a significant adjustment to data operations, multiple rounds of meetings with business owners successfully paved the way towards a transition to a superior new system that integrated the desired drivers for the bank. 

But our contractor’s work was not complete even after the project scope had already been expanded to factor in data cleaning. To minimise teething problems and help staff get the most out of their new resource, he provided comprehensive training sessions to show them the capabilities of the new system. 

This 360-degree approach to financial modelling empowers the bank to visualise trends, assess product-level performance, and conduct scenario analysis with increased precision. The comprehensive design enforces better data governance, facilitates clearer communication across departments and aligns them under a unified financial narrative. 

In short, they can better assess the past, present and future results of their operations, and come up with cleaner filings and better data-driven insights.