Managing Big Data fundamental to solving poor customer service and restoring customer trust
London — A report issued today by SAP (UK) Limited indicates that the pressure to meet industry standards could compromise long term success as Financial Services organisations are more likely to focus on risk protection than innovation and growth. Whilst also revealing that meeting customer expectations around trust and quality of service is dominating boardroom debates – the pressure is on IT departments to deliver creative IT solutions that will solve Big Data demands whilst meeting customer expectations.
Key findings of the report include:
- 60% of financial services firms say they are more focused on protecting themselves against risk than they are in investing to innovate and grow (40%)
- 68% of respondents are under more regulatory pressure than they were 12 months ago
- Financial Services firms are only able to act upon 39% of the customer data they have
- IT is seen as a significant core differentiator at Board level by 46% of companies in the sector
- Improving customer trust is rated as a priority for 3 out of 5 firms in the sector
- 65% of firms in the sector say their customers are more demanding of a personal service than they were two years ago
This independent industry report, commissioned by SAP, of 100 financial services companies found that improving customer service was the number one business priority by 65% of respondents. This was followed by increasing sales and revenue (63%), building customer trust (61%) and regulatory compliance (61%). Firms in the finance sector are clearly aware of the need for continuing investment in technology in 2012. The challenge they face however, is in prioritising this investment, and balancing the need to protect themselves from risk with the need for changes to the back office operations that enable longer-term strategic service improvements.
Jane Tweddle, Financial Service Principal SAP UK and Ireland, said, “The findings from the report all point towards the fact that the industry is in desperate need of balancing IT investment in order to keep up with, what looks set to be, a highly competitive year. There is a fundamental need to meet regulatory requirements but at the same time the sector needs to find a way to grasp Big Data. Currently the industry is failing to maximise the potential for revenue growth and improved customer interaction by utilising the data at its disposal.”
Increased data levels are causing a slow down for over a third of financial services businesses’ IT systems. Moreover, just under two thirds of companies surveyed said that they have more data than they can actually analyse or act upon.
The barrier to developing in-depth customer understanding and business insight has led to 29% of companies receiving an increase in customer complaints, last year alone. It’s no surprise then that two thirds of companies surveyed said that their sector is under pressure to provide IT innovation which will improve customer retention; dividing the investment between customer facing (61%) and back office (52%).
Increased focus on the need to meet regulation and protect against risk are common barriers preventing innovative IT investment. 68% of businesses reported being under more regulatory pressure than they were 12 months ago, leading to an understandable 6 out of 10 companies surveyed saying they are more concerned with protecting themselves against risk than they are in investing to innovate and grow.
“Data integrity is classically an area of considerable concern for the Financial Services Industry,” Tweddle continues, “ however the cost of not using the information available to them, both on their customers and their business itself, is unimaginable. Not only is time wasted collecting data which then has to be stored safely and protected at a further cost, customers are now recognising the service they should be getting is one that’s directly appropriate and convenient to them. Failing to meet this requirement will leave customers with only one choice: to look towards your competitors for a better service.”
Tweddle concludes, “In short, businesses in the finance sector are leaving money on the table in the form of un-used data, while increasing the probability of leaving themselves vulnerable in an environment of constant change. More agile systems are needed to give them the flexibility to meet today’s challenges. In order to profit in 2012 and beyond, the finance sector needs longer-term investment on the back-office analytics systems that will enable them to use the data they have and give them flexibility as regulations change and data flows increase.”
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All figures quoted are from the SAP Industry Focus Research Report. Methodology: The research, conducted by Loudhouse – an independent research consultancy based in London – is based on 200 telephone interviews with IT decision makers in companies with 250+ employees (100 in Retail, 100 in Finance). The survey took place during November/December 2011.
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