Customer Intelligence Key To Maximising Bank Profits

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.

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 and Report Co-Author, Ovum.

“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.”

“Banks should be confident that customer data is complete, accurate and up-to-date, getting there requires banks to treat customer data as a strategic asset that is managed as a shared resource,” said Knapik.

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.