One of the benefits of tenure as an independent BankTech analyst is the opportunity to look back and use some 20/20 hindsight to evaluate earlier analysis and forecasts.Now, keep in mind that being an independent analyst is different than being a weatherman or an economist -- the analyst's audience (i.e., customers) is demanding and votes with their wallets.
In September 1999 I authored an article in BS&T's September issue ("CRM: Is It a Parade or a Crusade?"). For those readers who were not connected to the BankTech world 10 years ago, CRM (an acronym for customer relationship management) became an over-hyped term that BankTech vendors were aggressively associating with a wide variety of solutions. I drew a parallel between the hype and a "parade"-like atmosphere where BankTech and multi-industry (or horizontal vendors) were strutting their stuff with great fanfare at trade shows, seminars and webcasts.
As the banking industry approached Y2K, the BankTech community was basking in the twilight of expanding IT budgets -- things had never been so good. Many, if not most, U.S. financial institutions had IT investments tied to legacy product-oriented business models and were not CRM friendly. CRM initiatives were being launched everywhere it seemed. CRM solution vendors, led by the likes of Siebel Systems, were enjoying robust revenue growth. A smattering of success stories fanned the interest and once again the lemming-like behavior swelled the ranks of banks pursuing CRM.
After 9/11, a not-so-funny thing happened to the CRM parade. A recession arrived. Costs were running over budget. Results were elusive or impossible to measure. A few solutions turned out to be about as useful as slideware. Internal debates within banks heated up over which departments were responsible for the disappointment(s). Some CRM projects were abandoned or never fully implemented. However, a small, but important set of institutions that had no interest in the parade atmosphere continued on their own individual "crusade" that focused on customers and each institution's ability to achieve its customer-centric objectives.
There are three important takeaways from the September 1999 article that have held true for the past 10 years, and I believe will continue to guide successful institutions.
1. Each institution's corporate culture and the strategic context of customer-centric objectives will determine the customer management solution requirements; 2. Technology solution requirements must address customer-centricity in a continuous cycle of acquiring knowledge, taking action, and measuring impact; 3. The fulfillment of a CRM-driven business vision is a never ending process, lead by strong CEO commitment to achieve best-in-class performance on important initiatives that are supported by well- planned and implemented technology solutions.
The crusade-like determination to serve customers at institutions like USAA (full disclosure -- I have been a USAA member for over 40 years and have completed two case studies on USAA's customer-oriented IT initiatives) and Wells Fargo (full disclosure -- I completed a customer-focused case study on Norwest, the bank that acquired the old Wells Fargo) are easy to identify as large institutions that have been successful for decades. The reality of today's marketplace is that smaller institutions with a crusade-like customer commitment can out maneuver bigger competitors and gain both market share and wallet share in their local market(s).