Business Intelligence System in Banking Industry case study of Saman Bank of Iran

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1 Business Intelligence System in Banking Industry case study of Saman Bank of Iran Maryam Marefati 1 and Seyyed Mohsen Hashemi 2 Abstract Business Intelligence (BI) is a set of tools, technologies and process in order to transform data into information and information to required knowledge for improve decision making in organization. Nowadays, we can confidently claim that the use of business intelligence solutions can increase the competitiveness of organization and outstanding it from other organization. This solution enables organization to use available information to exploit the competitive advantages of being a leader and have a better understanding of customer needs and demands to allow better communication with them. In this paper we explain about principals and elements of BI in fist section and in second section we discuss about the application of BI in banking industry and consider Saman Bank of Iran as a case study in order to applying BI solution. Key Words: Business Intelligence, elements of business intelligence, banking industry 1 Introduction Business Intelligence (BI) is a set of tools, technologies and process in order to transform data into information and information to required knowledge for improve decision making in organization. Store data in data warehouse, collection and consolidation of data, reporting and data mining help us to have business intelligence. Appling of these technologies provides new ability for interact between different level of organization to reach strategic goals of it. Besides it observation and analysis of key information of business process help managers to make relevant decision for corrective actions. Maryam Marefati Department of Computer Engineering, IAU University Arak Branch, Arak, Iran mmarefati@gmail.com Seyyed Mohsen Hashemi Dean of the Software Engineering and Artificial Intelligence Department, IAU University Science and Research Branch, Tehran, Iran hashemi@srbiau.ac.ir

2 2 Nowadays we can confidently claim that the use of business intelligence solutions can increase the competitiveness of organization and distinguishing it from other organization. This solution enables organization to use available information to exploit the competitive advantages of being progressive and have a better understanding of customer needs and demands to allow better communication with them. This solution also cause that organization can control positive and negative changes and monitor them. Business intelligence is considered not only as a product or a system but also as an architecture and new approach that contains a set of analytic application which helps decision making for business process on basis of operating and analytic data base. [1] As we consider a business intelligence solution we must first examine the principles and elements of it. The basic elements of business intelligence solution can be summed as follow: Extract, Transform and Load (ETL): If you work on business intelligence solution may be you need to store dada in data warehouse or data mart. At first it seems very simple, you must collect data from various systems and load them into data warehouse. You may force to map some columns. Data warehouse is a system for collection, sorting and process large volumes of data with analytic tools in order to provide complicated and meaningful information for decision makers. Data warehouse is related to ETL process. [2] Data Warehouse: The amount of heterogeneous data that is available to organizations has made information management a seriously complicated task, yet crucial since this data can be a valuable asset for business intelligence. [3] Nevertheless, it is believed that only about 20% information can be extracted from data warehouses concerning numeric data only, the other 80% information is hidden in non-numeric data or even in documents. [4] Data mart is a subset of data warehouse related to single business process or a single business group. Therefore, a data mart can be considered as a functional or departmental data warehouse of a smaller size and a more specific type than the overall company data warehouse. [5] OLAP: On-line analytical processing (OLAP) systems based on a dimensional view of data have found widespread use in business applications. These systems provide good performance and ease-ofuse. [6] Using multidimensional data base model lead to reduce execution time of query rather than traditional data base model (OLTP). In this model data store in special structure like cube so we can execute query quickly. Data Mining: Data mining is a tool for acquiring knowledge of the stored data. [7] Data mining, attempt to find rules, patterns and the possible desire to model, among a huge volume of data.

3 3 OLAP and data mining are complementary, for example OLAP can specify a problem in specific scope and data mining can analysis and modeling the behavior of effective elements on that scope. Decision Support System: is kind of information system that help decision maker to make decision in other word the main goal of a decision support system is providence and help to make decision for the future.[8] 2 Application of BI in banking industry Currently, huge electronic data repositories are maintained by banks and other financial institution in the world. Little information has been valuable in the repositories. Extract interested information from these huge data repositories for decision making processes by traditional and manual analysis is impossible. Business intelligence and data mining applications in the banking industry are: Risk Management Fraud Detection Portfolio Management Stock Exchange Customer Profiles and Customer Relationship Management (CRM) Anti Money Laundering 2.1 Introduction to Business Intelligence of Saman Bank According to different needs of Saman Bank and lack of integrated management reports for bank manager at various levels, lack of applications for different offices, software team of bank began to work in different field of business intelligence that lead to design and develop different system. Each system is designed according to the needs of different departments and units Personal System Due to the increasing activities of bank and its branches in various area of and also lack of integrated management reports in personnel system of bank, some of managers of bank and offices announce their need for a personnel system based on business intelligence. These departments are as follow: Bank Manager Personnel Office Financial Office

4 4 Inspection Office Investigation Office The Formulation and Methods Office The use case diagram of this system is: Fig. 1 use case diagram of personnel system Switch Card System Due to the expansion of sales terminals in the country and that these services were performed by Saman Electronic Payment. Large amount of valuable information stored in electronic payment system. The switch card system is trying to extract this information to produce knowledge and acquire hidden information. The project stakeholder includes the following: Bank Management Modern Banking Department Monitoring Office Investigation Office Inspection Office The use case diagram of this system display in figure 2: Fig. 2 use case diagram of switch card system

5 5 In this system we must enter card number at first after confirm it, the related information of this card extract from data warehouse and filtering according to selected filter and display by different diagram. The activity diagram of switch card system show in figure 3: Fig. 4 activity diagram of transaction of card in switch card system In bellow figure we consider activities and status of ATMs. Fig. 5 activity diagram of ATM in switch card system

6 6 3 Conclusions The use of business intelligence systems can result in good performance on the organization's strategic goals and lead to improvement in performance of organization. In the banking industry due to intense competition between different banks provide demanded services and customer satisfaction is one of the important challenges that can be solved by using business intelligence solution. Another important application of business intelligence in banking industry is fraud detection that is to be addressed in subsequent studies to given a solution based on business intelligence. Acknowledgments The authors are grateful for the useful comments and explanations provided by Afshin Parhizkari, IT Project Manager at the Saman Bank of Iran. References 1. Amin Golestani, (2009) Business intelligence and major enterprise decision, Tadbir monthly, Vol R. Kimball and J. Caserta, (2004), The Data Warehouse ETL Toolkit, Wiley Publisher 3. A. Ta'a, M. S. Abdullah, (2011) Goal-ontology approach for modelling and designing ETL processes, Procedia Computer Science vol. 3,pp Frank S.C. Tseng, Annie Y.H. Chou, (2006) The concept of document warehousing for multi-dimensional modelling of textual-based business intelligence, Decision Support Systems, Vol. 46, pp C. Vercellis, (2009) Business Intelligence: Data Mining and Optimization for Decision, John Wiley & Sons Publishers. 6. T. Pedersen,J. Gu. Rakic and C. Jenesen, (2009) Object-extended OLAP querying, Data & Knowledge Engineering, vol. 68, pp J. Han and M.Kamber, (2006), Data Mining: Concepts and Techniques Services, Manager Simon Crump Publisher ( Second Edition)