Computerworld - Larger financial institutions have an edge over small and nimble Internet upstarts in electronic customer relationship management (CRM), according to a new report released by Meridien Research in Newton, Mass.
Larger institutions often have more experience with data analysis technologies and have already built data warehouses to track the huge amounts of customer data they've collected, said Anya Astafieva, a Meridien analyst who authored the report on the ability of banks to track the customers who use their Web sites.
"Newer institutions, which have to justify their existence and are looking for quick results and quick returns on investment, will be focusing more on acquiring new customers and will be more likely to treat the Web as the primary channel, disregarding what the same customers might be doing in a branch or call center," she said.
But data analysis is more meaningful when it includes other sources of data, Astafieva said. This includes data from third parties, legacy systems, call centers and physical branches.
"It requires more sophisticated software, more effort and, ultimately, more financial investment," she said. "It takes longer to implement and longer to see a return on investments but is more fundamental and gives the institution an advantage."
However, Astafieva added that large corporations are at a disadvantage when it comes to speed.
"The corporate culture that they have doesn't allow them to move as fast as the Internet environment requires them to," she said. "The whole nature of the corporate environment — in terms of the time it takes to make decisions — is limiting."
The amount of electronic CRM spending by financial service institutions, while growing from a small base, will increase by 30% to 40% over the next three years, the report says.
"That will be dominated by large banks and securities and investment firms, since they already have a substantial customer base," Astafieva said.
Related stories:
Read more about Management and Careers in Computerworld's Management and Careers Topic Center.
Free Insider GuideCopyright © 1994 - 2012 Computerworld Inc. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Computerworld Inc. is prohibited. Computerworld and Computerworld.com and the respective logos are trademarks of International Data Group Inc.
