Once touted as the next big thing, customer relationship management

failed to deliver. Now data warehousing is helping it to fulfil its

initial promise. Parveen Bansal explains how.

Many financial services institutions invested in customer relationship

management (CRM) in the past few years but few appear to have reaped

any benefits from it. CRM systems have not delivered on their promise

of improved service and increased revenues because of a failure of the

underlying information architecture. But data warehousing could change


Improved profitability

The aim of CRM is to gather information on customers so those that are

profitable can be offered more appropriate products and service. It

aims to improve communication between the financial institution and its

customers, to retain customers and improve profitability.

One of its promises was to give the bank a single view of the customer,

which may have been where the trouble began. Banking products and

services were developed in separate product or service “silos”,

resulting in an ad hoc information architecture. For example, there

might be one database of customer information used by the marketing

department, another holding mortgage customers’ data and another for

credit card holders, and so on.

This resulted in a lot of data duplication and a lack of common

metadata (definitions about data held) so that a customer identified as

one number in one system could be recorded under a different number in

another. The consequences were not only superfluity of information but

also inconsistency.

The disparate data stores across a financial institution hindered the

integration of customer information, and had high operational,

maintenance and “lost opportunity” costs.

Rationalised data

Centralising storage of information via data warehousing offers the

benefits of significant cost reduction and predictability of fixed

costs. More importantly, in consolidating the data held in multiple

databases or data marts (the collection of databases for a single

function), data is rationalised and “cleansed”. On completion, the

organisation benefits from a single dictionary of metadata and a single

view of the customer for all product areas. An enterprise-wide data

warehouse is constructed and can be accessed by the marketing and

management functions.

Behaviour analysis

Apart from the regulatory requirements of storing data, the data can be

analysed that records customers’ spend patterns and product ownership.

This is often referred to as analytical CRM and consists of data

“mining” and analyses of behaviour patterns to identify potential

customer needs or determine the profitability of individual products.

Analytical CRM can help to replace mass marketing with frequent,

smaller and highly focused campaigns. This increases effectiveness

while reducing waste and customer irritation.

However, the data held must be up-to-date. Whereas monthly batch

updates used to be considered sufficient, today’s highly competitive

market requires near real-time updating of data.

It is important, therefore, that the front-office (branch, call centre

and online banking) operational CRM systems, such as Siebel and

Peoplesoft, and back-office transactional systems are integrated with

the data warehouse, so that data can be collected and analysed as it

becomes available. In this way banks will be able to offer interactive,

customised marketing for individual customers.

Fukui bank benefits

The benefits of data warehousing and integration of operational CRM

data are clear in the case of Japan’s Fukui Bank. It identified the

need to operate from a customer’s point of view and for more

sophisticated marketing, offering products and services tailored to

individual customers’ needs, lifestyles and preferences in a timely


To enable a shift from product-oriented to customer-oriented marketing

Fukui Bank implemented a new customer data warehouse from Teradata,

integrated with a CRM system that enabled it to analyse customer data,

find out marketing targets and methods, and record and manage

interactions with customers.

The data warehouse and CRM systems are integrated with other

mission-critical systems – accounting, call centre, and other

sub-systems – enabling enterprise-wide data management that provides an

integrated view of business.

As a result, Fukui Bank now has a bank-wide network that enables it,

through teller terminal screens, to give appropriate sales advice based

on individual customer data or to present appropriate proposals while

making simulations.

“Our field sales people are reporting that they can now get a good

grasp of customer needs that they would have overlooked before,” says

Etsuro Azuma, CRM project team leader at Fukui Bank.

They can now use their PCs to create much more effective sales

activities, such as offering financial products and services suited to

a particular customer.


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