Newsletter - December 2008

Single Customer Views in a downturn – more important than ever
By Ian Beaumont, Managing Director, Matrix-Data Solutions

In tough economic times businesses tend to slash costs. These often start with marketing and client services expenditure that are viewed as non-core. This practice may actually expose businesses to greater risks rather than fortifying them against economic uncertainties. Mindsets need to change from absolute growth to relative growth, and gaining market share over competitors is paramount. There is an opportunity for businesses that really understand their customers and channels to make significant gains, particularly if competitors are pulling back their activities as a result of cost-cutting initiatives.

Business advantage comes from knowing your customers, be it their recent trading history, understanding impacts of the downturn on their activities, predicting future trends, picking the right channels that will thrive in an adverse market, marketing the right message to the most promising segments, or helping your customer services team have the right information at their fingertips. All these can be effectively achieved by the implementation of a Single Customer View (SCV).

James Alty, Managing Director of Apteco sums it up, “The creation of a Single Customer View is so significant to any business undertaking customer and channel analysis, product development and modelling, and campaign management that we believe it should be a board level responsibility. A well implemented SCV delivers benefits across marketing, client services, operations and business strategy. Successful businesses will recognise the value of customer and channel insight and prioritise it at board level”.

Within the financial services sector, businesses including banks, fund management, insurance and brokerage firms (to name but a few) are fighting for market share. A SCV integrates transactional and customer information across channels, products and portfolios enabling a fully integrated view. Financial companies are very good at gathering robust customer information, much of which is necessary to meet regulatory requirements like money laundering, and Know Your Customer (KYC). They collect data at the point of sale, track buying habits and preferences over time and survey customers while carefully recording the results. These companies successfully manage customer information from multiple sources like contact details, valuations data and marketing campaigns.

However, they often don’t consolidate or integrate all of this information in any consistent manner. The information is rarely turned into real business intelligence. A lot of this is down to data residing in multiple systems and networks, managed by disparate departments, lines of business or third parties. Each of these data silos is chartered and funded by a single line of business or division with specific and narrowly focussed goals, e.g. marketing, sales, finance and operations. They often have different technologies and platforms with limited ability to integrate or exchange information. This issue is compounded by mergers and acquisitions which lead to the combining companies adopting new non-compatible systems which create silos within silos.

In financial services, a particular benefit of an effective SCV is the ability to audit and substantiate all customer interactions critical to meeting regulatory compliance and privacy management requirements of the Financial Services Authority, like the Treating Customers Fairly (TCF) initiative.

As well as this regulatory benefit, strategically, the capabilities offered by a SCV can lead to a real competitive advantage, particularly in a down market. This can be the improvement of customer services, marketing results, and the impact of new product initiatives. It can also improve operational efficiency across different business units.