With privacy concerns and various data formats spread across millions of devices, it can be difficult to extract value from data. Not surprisingly, as an Inc study states, up to 73% of company data is not used for analysis.
What is financial analytics?
Financial analytics, also known as financial analysis, provides different perspectives on the financial data of a company, providing knowledge that can facilitate decision-making and strategic actions that will improve their performance. Simply put, it’s about turning data into an understanding of what it contains for better business decision-making with the help of visualizations, reports, predictive analytics, and more.
Related to business intelligence and performance management, financial analytics affects virtually every aspect of a business, as it plays a critical role in calculating profits, answering questions about a business, and forecasting. business
To ensure departments are data-driven, CFOs work with IT to leverage financial analytics in ways that take advantage of integration and maximize automation.
Many financial organizations reach this state by redesigning their financial systems architectures taking into account some basic capabilities such as agility, sustainability, extensibility, predictability, and accountability.
- Agility – Refers to the CFO‘s ability to respond and promote change.
- Sustainability: they give a name to financial analysis built in a decision-making environment that can be continuously updated and evolve with few efforts.
- Extensibility: These are architectures designed with an eye toward future data types that, when combined with the initial ones, generate incremental business value.
- Predictability – Depending on how revenue and costs interact, this quality is what provides CFOs with detailed operational insight to identify and act on priority activities that can improve future profitability.
- Accountability: This is a framework that aligns strategy and execution across the company intending to run the business on an agreed-upon factual basis through a common set of metrics.
What does business intelligence bring to the financial area?
Data becomes information
Helps to finalize and interpret large amounts of data quickly and easily.
Information becomes more visual
BI helps data and results to be presented visually so that they are easier to understand.
Helps increase the value and credibility of the finance function as a strategic partner.
Advantages of using Business Intelligence in finance
In the context of financial analytics, Business Intelligence helps answer questions based on real information. When BI and analytics work together, companies also work with the data that they have at the moment, allowing them to move towards data management, predictions, and future decisions.
It is specifically crucial for the finance industry since business intelligence and analytics tools are instruments that help to see reality with data and information.
The potential of BI technology is that of “on-demand” data. That is, having real numbers that help to see where the business is and identify what helps and what opportunities for growth there are.
A well-applied BI solution makes real-time data management fast and straightforward taking into account the dimensions of the organization (such as products, customers, or services), and helps to further develop strategies to optimize growth. As a result, financial organizations have solid proof for future go-to-market strategies, taking on better financial services.
Considering that studies show that 65% of people are visual learners, the information displayed is also much better perceived. A visual representation of the numbers such as KPIs, risk levels, data trends, financial flows, or tracking profits and expenses by combining data, is what will drive decisions to be made. based on the facts.
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