Will regional banks change their approach to CRM? (page 1 of 2)

The confluence of these market factors can drive significant changes in the way CRM technology may enable banks operating in the Middle East to both serve their customers better and meet their business objectives. In fact, the region is witnessing a monumental revision in the way that financial service institutions are viewing their customer relationships.

Changes in customer demand

Increasing Internet adoption across the region has created a fundamental change in consumers' relationships with their banking providers. Just as the Internet has encouraged a culture of instant access to information in a simple way, anytime, any place, anywhere, so Middle East-based customers are now demanding more accessibility, greater availability and simplicity in their financial transactions and information access.

A growing number of banks in the Gulf and beyond have created an Internet presence to enable their customers to access information and to transact online. Others have embarked on highly publicized call center projects to provide customers with help desk functions.

Unfortunately, many of these systems are not integrated and don't always offer real-time transactional capabilities. The sophistication of customers has increased measurably, so these often fragmented and disparate initiatives might not be the best approach.

A more coherent strategy-driven approach to customer relationship management that stems from the bank's strategy relies on deep business intelligence and delivers a multi channel customer relationship.

Rising IT integration costs

In the current economic climate, regional banks are closely evaluating the costs of IT as compared to the value that technology delivers to customers and the organization as a whole. Analysts have estimated that up to eighty percent of all new IT projects are actually integration efforts to try to make the new system or application work properly with the existing technology platform.

The growing trends across the Middle East toward multi-channel banking and increased customer focus are pushing up integration costs without any real benefit being passed on to the customers. While some regional banks have invested heavily in pre integrated solutions that require minimal tailoring to fit their existing environments, a large percentage of financial services providers here are using obsolete core technology that costs more to maintain and is more difficult to integrate with.

There is good news on the way, however, to combat rising IT costs. New offerings such as Oracle's grid computing enable banks to virtualise software across multiple resources, allowing better and less expensive use of a bank's computing resources by balancing out peaks and troughs of activity, which are typical for banks - for example, end-of-day closing functions. Oracle Service Oriented Architecture (SOA), on the other hand enables banks to map and integrate their business processes across disparate systems.

Low-cost hardware

While integration costs have increased for regional banks, IT hardware has become more affordable, marking a shift in IT investment patterns. Middle East banks are demonstrating that they no longer require high cost platforms, and are increasingly deploying commodity hardware to run Unix and Linux, as the necessary computing power is now available at a more affordable cost.

A growing number of financial service providers are making the realization that the reliability and scalability elements of their IT environments reside in the software they select.