Why Financial Service Firms Are Cutting Back on CRM Spending
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Online News published in DMReview.com
January 2, 2002 |
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Global financial institution spending on customer relationship management applications will remain flat over the next two years, projects Meridien Research, a Newton, Mass.-based financial industry technology analysis firm. Corporate CRM spending, which totaled $3 billion in 2001, will go unchanged this year, Meridian says. The sector, which mainly involves purchases by commercial banks, is not expected to grow significantly until 2004. Many institutions, Meridian notes, still are examining their return-on-investment from less-successful CRM initiatives. Retail CRM revenues, which reached $6.7 billion in 2001, also will stay at the same level in 2002, Meridian projects. Institutions, the firm says, still are struggling to master the complexity of channel integration and dealing with the cost of building and maintaining a robust data warehouse infrastructure to support a wide range of analytical applications.
The flat market, however, will enable many companies to obtain CRM tools at "bargain" prices, says Tom Richards, Meridien research director of CRM. "We expect leading institutions to dig into business processes, probing for better cost savings and better service levels for customers," he adds.
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