European financial institutions are failing to maximise their customer relationship management capabilities despite a growing number of firms who view CRM as a strategic development, says research house Datamonitor.
As part of a study into current and emerging customer financial services trends across the European banking, insurance and brokerage markets, Datamonitor conducted 202 interviews with senior IT/business professionals in 182 European financial institutions.
The research finds 62% of financial institutions are using CRM primarily as a tactical tool to identify high value customers and measure profitability. However, 56% of firms do not see cross selling as a key use of customer data.
Complex implementation remains the key barrier to CRM adoption in the financial services sector, says Datamonitor. Fifty-four per cent of financial services firms view implementation difficulties as the main barrier to CRM adoption.
While banks are already addressing re-engineering challenges to technology integration, the brokerage and insurance sectors are hindered by aging proprietary legacy networks and IT systems. Datamonitor has also identified a lack of 'off the shelf' solutions and of skilled expertise for firms in these sectors.
Senior management buy-in is perceived to be more a barrier to the banks than to the brokerages and insurers primarily due to failed promises that have caused management to approach proposed CRM gains with skepticism.
The study also shows current industry trends are in favour of a centralised, business decision maker and board level strategy formulation approach, as opposed to individual business lines and IT departments calling the shots.
Anders Maehre, financial services technology analyst at Datamonitor comments: "It is imperative to view CRM as a strategic initiative. Other approaches will inevitably lead to an over-emphasis on certain business functions or as we have seen in the past, an exaggerated reliance on technology to alter the nature of customer relationships and interaction."