While IT spending will remain high, approaching half a billion pounds, banks and insurers will spend far more on traditional channels such as branches and call centers than they will on the Internet. In particular, they will increase spending on CRM systems to deepen the relationship they have with their customers.
A new survey finds UK financial institutions will invest little in Internet capabilities this year.
Even though the vast majority of the UK’s financial services institutions have websites and significant numbers of customers use online services, the Internet no longer appears to be an investment priority.
A new survey, commissioned by software firm AIT, BT, eFunds and Microsoft, finds that in total the UK’s FSIs are planning on spending GBP471 million on customer facing systems for their branches and call centers but only GBP69.8 million on Internet-focused customer systems. The findings are also not good news for those waiting for the provision of enhanced mobile phone and digital TV services.
Increased competition and higher customer expectations are making FSIs increasingly concerned with how they manage their customer relationships. Despite the hype surrounding online financial services, it is now widely recognized that the branch and call center are the ways in which most consumers prefer to deal with their financial affairs. Hence, FSIs are eager to make the most effective use of their investment by focusing on these channels.
FSIs are currently plagued by incompatibility issues that result from having customer information spread across a number of computer systems. This can make it impossible to achieve worthwhile customer segmentation and to target resources most effectively. It is hard, for example, to identify the most profitable customers, or what services they like to use.
Although few would be so foolish as to predict the end of the Internet’s role in financial services, it is clear that its role is changing. Knowing what customers want is key – and they don’t all seem to want the Internet.