Banks are ignoring the slowdown in CRM spending, but only because they have yet to see serious return on the money they’ve already spent.
According to a report from research firm Datamonitor, 42 per cent of European retail banks are still increasing investment in CRM, making CRM the most significant area of growth in technology spending for banks this year. Some 17 per cent say they will not be increasing spending in any area of IT this year.
But Datamonitor concludes that this is something of a backhanded compliment, arguing that the continued spending is because most banks have yet to see a return on their earlier investments.
"It reflects the fact that many institutions are yet to see value from their CRM systems and feel more work is needed before the full potential of the investment they have already made is realized," said James Adams, a technology analyst for Datamonitor.
Although viewed as a priority, cost savings makes it harder for the insurance and investment sectors to justify spending on CRM. Institutions in insurance and investment sector also see CRM as a priority, but are more restricted by tight IT budgets.
Adams concludes the insurance and retail investment sectors are likely to invest more in CRM in the future, but for 2002 those industries are focused on cost cutting measures.