Melbourne, 30th July 2010. Creating a single, comprehensive view of the customer is the key for banks seeking to boost profits and rebuild trust in the post-credit crunch era, according to Ovum.
A new report* by the independent technology analyst states that banks have been saddled with multiple, overlapping systems providing glimpses of insight into their often customers. In addition, as research** by Ovum's parent company Datamonitor has revealed, many consumers have lost trust in their banks and are more willing since the credit crunch to shop around for financial products.
Ovum believes banks must actively embrace service improvement activities; whether through improved targeting of the "right" customers, greater emphasis on providing a better integrated experience by synchronising contact channels, or recommending appropriate financial products without taking an obvious 'hard sell' approach.
"All these improvements aim at greater customer understanding which will ultimately translate into improved trust and maximised profits", said Jaroslaw Knapik, senior analyst at Ovum and report co-author.
"Banks must attract new customers who will stay active not for a few months, but for years. Additionally, providers must reassess their approach to retaining existing customers; they must not simply retain but further monetise existing customers through gaining a better understanding how to more effectively cross-sell and up-sell their products and services."
The Ovum report states that the growth of multichannel propositions presents banks with the opportunity to gain a more complete understanding of core customers.
The challenge is to integrate all transaction information, web analytics and marketing data, so that data from various channels can be correctly analyzed and interpreted. To achieve this, banks must aggregate all customer data and event details from all systems in one place.
However, it is not just the bank that requires information. It should be a two way process that actively engages customers, allowing them to submit feedback, ask questions or request product information through these same channels.
"Banks should be confident that customer data is complete, accurate and up-to-date", said Knapik. "Getting there requires banks to treat customer data as a strategic asset that is managed as a shared resource."
Ovum sees Customer Intelligence (CI)*** as the next logical step in the development of the customer-centric bank, as it expands on the promise of Customer Relationship Management (CRM) by aggregating data beyond the customer interactions that are managed by most CRM implementations, providing deeper insight into the behaviour and experiences of a bank's customer base.
Ovum expects spending by retail banks on multichannel integration and customer information systems (MI/CIS) to grow at a CAGR of 4.6% between 2009 and 2014, with the market size increasing from $4.9 billion globally to $6.1 billion over the period. Spend on MI/CIS is expected to grow at faster rates than most other business areas. Only technology spending on online banking (5.5% CAGR 2009/14) and management information systems (5.1%) is expected to grow at a faster rate.
SOURCE: OVUM
