PracticeConsultingFinancial firms ignore internet for CRM

Financial firms ignore internet for CRM

Banks and building societies are turning their back on new market channels when spending on customer relationship management (CRM) technology.

This is the finding of the research ‘CRM in the retail financial sector’ by Coleman Parkes Research among 456 UK financial institutions. The study was commissioned by Microsoft, BT, AIT and eFunds.

It showed that 76% of the total CRM investment in the past 12 months and 80% – or £471m – of all new investment planned for 2002 will focus on call centres and branches, rather than on the Web, wireless or interactive television.

Fewer than 20% of retail financial services organisations have invested in CRM over the internet, and 15 per cent of these companies plan to invest in this in 2002.

‘In the current economic downturn many [financial organisations] have put these investments on hold. Instead they are concentrating on human contact to engage with existing customers and provide greater value,’ said Geoff Barraclough, head of marketing for finance industry solutions at BT.

Other findings show that over a third of retail finance companies have no CRM applications over any channel but by the end of 2002 three quarters of companies in this market will have a CRM application across one channel.

Companies wanting to implement CRM are advised to run a pilot project first.

‘Companies should implement CRM piece by piece. They should implement a process where they can measure a 100 per cent return and then they should roll it out,’ said Clive McNamara, marketing director of CRM vendor, AIT.

‘The market still has a “big bang” approach, trying to make all the changes at once. But it is better to run a small project, get it right and roll out CRM from there.’

One reason for this is the approach of CRM vendors, according to analysts.

‘In house [development of CRM systems] is still high because when banks go externally, systems integrators tend to be looking for their next big project. It is not is the interests of vendors to go for isolated roll out,’ said Anders Maehre, analyst at Datamonitor.

‘Vendors should demonstrate how you will make money on CRM. [Banks should] do a piecemeal implementation with a phase one and see how money can be made on that phase.’

Another key to success is being aware of the impact CRM systems will have on corporate culture.

‘Embracing the impact CRM has on culture is an important part of getting the most out of CRM,’ said Ian Parkes, director of Coleman Parkes. Many companies cannot deal with the impact of a large implementation without an initial pilot, he explained.

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