Ignorance No Longer Bliss
Ignorance is bliss goes that age-old adage. But in today’s ever-changing business dynamics, can ignorance be any longer considered bliss? It is intelligence, not ignorance that holds the key. Sound and up-to-date knowledge is the crucial differentiating factor responsible for the success or failure of any business venture.
The Financial Services Industry (FSI) is experiencing a tremendous transformation. Factors such as globalization, de-regulation, mergers and acquisitions, competition from non-financial institutions, and technological innovation are forcing firms to re-think and re-align their business strategy.
Firms in the FSI are now required to create new revenue streams, tap new markets, gain market share and cut down operational costs. Over and above this, they are expected to cater to the ever-changing expectations and requirements of customers, as they become better informed and more demanding. Moreover with the proposed implementation of new Basel II accord, firms in the FSI are required to collect historical data of three to five years. The Basel II accord is an updated version of the 1988 Basel accord proposed by the Bank for International Settlement. In June 1999, the Basel Committee issued a proposal for a New Capital Adequacy Framework to replace the 1988 accord.
This framework, which is currently under development, is known as the second Basel Accord or, more commonly, as Basel II. The Basel Committee intends to finalize Basel II in the fourth quarter of 2003, allowing for implementation of the new framework in each G10 country by the end of 2006. The new framework is set to improve the trustworthiness of the financial system by aligning capital adequacy assessment more closely with the fundamental risks in the banking industry. Moreover, it will also provide incentives for banks to enhance their risk measurement and management capabilities. It will thereby augment market discipline.
Thus firms are being forced to transform their management strategy and become more customer-centric than product specific. Intelligence is playing a key role in this transformation. Intelligence is the aptitude to learn, to comprehend or to counter new or trying situations. It is the skillful use of reason and the capacity to apply knowledge to influence one's environment or to think conceptually. Business intelligence is a set of notions, methods, and practices, which improves business decisions. It uses information from multiple sources and applies experience and assumptions that helps in understanding accurately the intricacies of business dynamics.
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