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MAXIMIZE YOUR CUSTOMER INFORMATION FOR BUSINESS GROWTHMASTERING CUSTOMER DATA POINTS – THE WAY TO CUSTOMER CENTRICITY

SAP Thought LeadershipBanking and Financial Services

The financial services industry is a very dynamic one, with ever-changing operational processes and regulatory and compliance requirements. These factors, together with keen competition that necessitates devising unique business strategies, demand that banking and financial services enterprises develop a robust next-generation architecture to enable customer-centric IT.

4 Executive Summary

5 Why a Single View of the Customer Is Important

6 Technology as an Enabler of Customer Centricity

7 Building a Customer Information Hub

8 SAP Financial Customer Information Management

8 For More Information

About the Author

Guruprasad Gaonkar is a business development manager for the SAP Asia-Pacific and Japan region, and is responsible for driving SAP’s strategy and business development programs for banking solutions in the region. His career in inter-national banking technology spans more than 8 years in more than 15 countries across 5 continents. His area of expertise includes core banking transformation and customer information management, and he is passionate about banking.

CONTENT

Towards achieving enterprise customer information management, banking and financial services enterprises have invested heavily in homegrown or generic master data applications, data warehousing systems, built-to-order databases, and anti-money-laundering systems. Success has been mixed; the investments have not necessarily resulted in customer-centric IT, but instead have fulfilled data consolidation tasks to some extent.

The financial services industry is a very dynamic one, with ever-changing opera-tional processes and regulatory and compliance requirements. These factors, together with keen competition that necessitates devising unique business strategies, demand that banking and financial services enterprises develop a robust next-generation architecture to enable customer-centric IT. Such an

architecture can integrate customer information across technology, pro-cesses, and services, breaking down organizational silos and exposing process -oriented customer information across the enterprise. The direct business benefits of such an approach include improved sales and marketing, higher operational efficiency, a gratifying customer experience, enhanced com-pliance, and lower risk.

EXECUTIVE SUMMARYEMBARKING ON THE JOURNEY TOWARD CUSTOMER CENTRICITY

Customer information is the most valuable asset for any banking and financial services provider, straddling all areas including the executive management, sales and marketing, customer channels, and IT. Even the compliance and regulation area requires accurate customer information, given the continuously changing compliance and regulations demand accurate reporting.

In these challenging times, the customer is at the top of the executive agenda for sustainable business growth. Growing share of wallet requires maintaining an enter prise-wide focus on customers, one that engenders a shift from a product-centric focus to customer-centric service capability. All customer-facing personnel need a holistic view of the customer, and product servicing and pricing should represent the entire relationship, rather than just the individual product.

4 SAP Thought Leadership – Maximize Your Customer Information for Business Growth

Customer information is the most valu-able asset for any banking and financial services provider, straddling all areas including the executive management, sales and marketing, customer channels, and IT. Even the compliance and regula-tion area requires accurate customer information, given the continuously changing compliance and regulations demand accurate reporting. A customer- centric approach from a business and also IT point of view builds a foundation layer that integrates the bank, supporting a higher service capability that can be leveraged by the various business lines and channels.

Because of the distinctive nature of banking and financial services products such as checking accounts, credit cards, loans, securities accounts, and insur-ance, customer information is main-tained in multiple disparate systems. With product-centric procedures (for example, opening of a deposit account), the customer profile is created in the respective product system, leading to islands of distributed customer information.

When various employees across the business lines and channels engage with a customer, each accessing different versions of the same customer profile,

the result is an incomplete, inconsis-tent, and even frustrating customer experience. Many banks and financial institutions lack a full picture of the customer’s total commitment and expo-sure across various lines of business within the enterprise, making it a chal-lenge to individualize marketing offers. Without a complete view and a closer relationship to customers, sales and marketing campaigns at banks are inef-fective. As a result, banks and financial institutions are left with make-do “best guess” efforts, making contacts with the wrong prospects and missing the right ones, with wasted marketing efforts and additional costs as a result.

WHY A SINGLE VIEW OF THE CUSTOMER IS IMPORTANTMULTIPLE VERSIONS OF THE TRUTH BLUR CUSTOMER FOCUS

Achieving customer centricity starts with the IT infra-structure. Multiple core systems and satellite solu-tions are essential to provide best-of-breed product functionality to the individual lines of business. Moving towards customer centricity does not necessitate re-placement of these product-centric systems. Rather, the focus should be on building a customer-centric IT architecture in tandem with these systems.

5SAP Thought Leadership – Maximize Your Customer Information for Business Growth

In a market with tech-savvy and oppor-tunistic customers, coupled with intense competition and increasing product commoditization, banking and financial services providers need to differentiate themselves and their prod-ucts and services. To be successful at retaining their existing customers and attracting new ones, they must simultaneously increase efficiency, lower costs, and comply with regulations while mastering the complexities of product differentiation.

While their business growth efforts have traditionally relied on attracting new customers, the depressed eco-nomic climate has made it more impor-tant than ever to focus on existing cus-tomers. Developing additional revenue streams from existing customers is cost-effective as compared to higher sales and marketing expenses for acquiring new ones.

The increasing complexity of regulatory compliance and the rapid introduction of new regulations demand consistency across all customer touch points. This presents big challenges for risk manag-ers at financial services institutions today. Regulatory inspections require complete audit trails, robust functionality for accurate reporting, and business intelligence simulation tools on a holistic platform – which distributed systems may not be able to meet.

Achieving customer centricity starts with the IT infrastructure. Multiple core systems and satellite solutions are essential to provide best-of-breed product functionality to the individual lines of business. Moving towards cus-tomer centricity does not necessitate replacement of these product-centric systems. Rather, the focus should be on building a customer-centric IT archi-tecture in tandem with these systems.

TECHNOLOGY AS AN ENABLER OF CUSTOMER CENTRICITYGROWING WALLET SHARE REQUIRES CUSTOMER INTIMACY

A customer-centric business growth model demands a customer-centric IT framework. Customer-centric IT enables breaking down the boundaries of information silos and exposes process-oriented functionality across the enterprise. This further enables simplified and streamlined end-to-end processes for customers and bank users, with a high degree of flexibility.


Typically, banks and financial institutions have not succeeded in leveraging their investments of these approaches into customer relationship management (CRM) or even initiatives to renew core systems and services. This is because earlier approaches to customer master data management have been too data centric and were designed and imple-mented without considering the wider technology expansion and the dynamic nature of business processes and services.

Banks and financial institutions need to look beyond data consolidation into creation of customer data as an “infor-mation hub” that can essentially pro-vide the foundation layer for various business and core systems in the landscape.

Customer information hubs are not just data consolidation, but also a move towards improving the overall customer experience and gaining a better under-standing of customers’ needs. This will

provide businesses with greater insights into opportunities for revenue growth.

Gartner defines customer data inte-gration as follows: “CDI [customer data integration] is the combination of the technology, processes, and services needed to create and main -tain an accurate, timely and complete view of the customer across multiple channels, business lines, and, potentially, enter prises.”1

Customer data integration represents a paradigm shift in how banks and finan-cial institutions are creating customer information hubs. To support and enable their business strategies, they need an agile and dynamic foundational layer that can not only accommodate current changes in operations but also fuel the engine for future growth. Customer data integration plays a key role in providing the foundation layer for customer-centric IT wherein banks and financial services providers can further implement effec-tive CRM strategy and efficient core business and service-based capability.

BUILDING A CUSTOMER INFORMATION HUBMASTER DATA KEY TO CRM AND CUSTOMER INSIGHTS

Customer-centric IT results in improved business process efficiencies, enhanced regulatory compliance, and lower operational risk. IT that enables customer centricity provides a foundational layer that supports streamlined and linkable business processes centered on the customer, creating improved service capabilities across business lines and channels – and ultimately, business growth.

1. Mary Knox and Stessa B Cohen, “Selecting Customer Data Integration Styles for Process-Focused Multichannel Integration,” December 18, 2008, G00164007

The following are the most important features to look for when implement-ing IT applications for customer data integration. You need the ability to:• Support complex needs of banking

and financial services-specific data model

• Synchronize data sources and IT systems

• Support multiple languages and countries

• Match, clean, and standardize data • Handle large data volumes• Manage workflow• Use a data-modeling workbench• Rely on a proven solution in a

banking and financial services landscape

Essential Features of Customer Data Integration


SAP® FINANCIAL CUSTOMER INFORMATION MANAGEMENTA PROVEN SOLUTION TAILORED FOR BANKING AND FINANCIAL SERVICES

A customer-centric business growth model demands a customer-centric IT framework. Customer-centric IT enables breaking down the bound aries of information silos and exposes process- oriented functionality across the enterprise. This further enables simplified and streamlined end-to-end processes for customers and bank users, with a high degree of flexibility.

The SAP® Financial Customer Informa-tion Management application forms the core of a customer-centric IT frame-work. A proven solution for customer data integration specifically designed for the banking and financial services industry, SAP Financial Customer Infor-mation Management brings together customer data across every application and enables the centralized manage-ment of all customer information.

Successfully implemented at more than 100 banks in 25 countries, SAP Financial Customer Information Management is a proven solution to handle the complex data models and large data volumes in banks and financial institu-tions. The solution focuses on managing customer relationships and the customer acquisitions process. It is designed to minimize data redundancy and exploit the advantages of technology, process, and service integration, while enabling frequent shifts in business processes. A modular design allows a customer data integration initiative to be followed by implementing CRM and business analytics functionality in a phased approach – ultimately building a fully customer-centric IT framework.

Customer-centric IT results in improved business process efficiencies, enhanced regulatory compliance, and lower oper-ational risk. IT that enables customer centricity provides a foundational layer that supports streamlined and linkable business processes centered on the customer, creating improved service capabilities across business lines and channels – and ultimately, business growth.

For More Information

To find out more about how SAP can help you gain customer insight and grow revenue using customer-centric IT, please visit www.sap.com/industries/banking/businessprocesses/crm/index.epx.

Successfully implemented at more than 100 banks in 25 countries, SAP Financial Customer Information Management is a proven solution to handle the com-plex data models and large data volumes in banks and financial institutions. The solution focuses on managing customer relationships and the customer acquisition process


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