CRM is the key factor in determining growth for European retail banks, consultants KPMG and merchant bankers Goldman Sachs said today.
In their joint report, What determines the winners amongst Europe's retail banks, the industry analysts predicted CRM will drive growth for individual banks and affect their merger and acquisition options.
It reveals that the top fifth of a bank's customers generate 1.6 times as much profit as the rest of the its accounts combined. The study concluded that banks need to deploy CRM systems to segment their customer bases, tailor appropriate products for different segments, and add personalised services.
However, independent analysts fear UK banks may ignore the warnings. Clive Longbottom, service director at Quocirca, said: "A lot of banks are still 20th Century or even 19th Century in their approach, but they need to change and say to themselves, we're not banks, we're financial service providers, in the same way Virgin One and others have done."
"However, because UK banks' internal systems are so poor, they feel they will have to make massive changes and aren't prepared to. Those that recognise the need for new systems are launching new companies, rather than updating their own systems. It's going to take outside interference from either Europe or the US before banks become customer reactive," Longbottom added.
Simon Maughan, research director at Goldman Sachs, said that European retail banks will have to up their game if they are to be counted among the leaders in this market over the next twelve months.
"Those banks that place CRM at the centre of their growth strategies and ensure that their staff bring these strategies to life in their dealings with customers, will put clear blue water between them and their nearest competitors," he said.
"Retail banks also need to adopt a radical approach that places CRM at the centre of their mergers and acquisitions strategies. This is something that hasn't been done before, and it won't be easy. But those that will succeed will become the dominant players in Europe's retail banking market," Maughan added.
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