Aging IT infrastructures continuing to hold back bank innovation
2010-07-28
As banks increasingly try to lean on analytical tools to help them learn how to prevent customer attrition, they are being held back by an aging IT infrastructure made up a number of older systems and databases, the Economist reports.

Those older systems can prevent banks from maintaining an organized view of their customers. The paper reports that many times, financial institutions can end up duplicating a customer's information throughout their systems because it is being saved in many different formats and in different places - preventing the bank from offering the best tailored selling opportunities for its customers.

That lack of connectedness can also lead to other problems when trying to resolve customer issues. For example, a customer might call and inquire about a particular service, which can be noted in his or her account information. But if that information never reaches the next representative the customer speaks to, it can negatively impact his or her experience.

The need to upgrade at older banks has given an advantage to smaller startup banks, which can often use their newer systems to be more agile in responding to customer issues and trends.

Banks are beginning to make upgrading their computing infrastructure a major priority. A survey of U.S. financial institutions by the Aite Group found that 20 percent of them had made upgrading their IT systems a priority, and an additional 56 percent said that, given their current systems, an upgrade could be clearly justified.

One major bank, HSBC, has already begun an end-to-end upgrade called "One HSBC" to consolidate and upgrade all of its IT systems over three years. When it started the overhaul in 2008, the company had 55 systems for banking, 41 for online banking and another 24 for credit cards.

The strategy could produce major returns for the company. According to a presentation posted on the HSBC's webpage, a test at a call center found that the new system was much more efficient when responding to customer requests. The average time it took for a representative to block and replace a compromised debit card was cut from six minutes to four - a 33-percent improvement. Other transactions showed time improvements as well.

Recent Database Management and Data Processing News

Banks need a single customer view
2010-08-02
A new report by technology analyst Increasing number of banks upgrading core IT systems to improve customer analysis
2010-07-12
A recent survey by the Aite Group found that a growing number of financial institutions trying to determine how to prevent customer attrition have reached a point where they need to upgrade their core systems in order to keep customers - despite the high up-front cost.
Survey predicts rapid growth in smart loan applications
2010-07-07
A survey of more than 300 financial institutions found that over the next few years, banks will rapidly work to adopt "smart" loan applications, which take advantage of a bank's knowledge of each customer's banking history to partially automate and simplify the process.

Recent Customer Analytics News

Retention analysis helps retail banks improve customer relationship management
2010-08-19
A growing number of financial institutions are turning to customer retention analysis to determine not only how to maintain customer loyalty in banking, but how to increase their profits as well.
New study says FIs should customize customer interactions
2010-07-21
Financial institutions are constantly looking for ways to increase both customer profitability and loyalty.
Banks see cross selling benefits from customer analytics
2010-07-07
While every bank tries to capitalize on its customers' loyalty by getting them to buy additional products, financial institutions need to take advantage of customer analytics to better target these cross-selling offers and increase success online, according to Bank Technology News.