The back office’s ability to determine what occurs in the front office is weakening. As the financial services providers move away from cost reduction to revenue growth, retail banks are finding it increasingly important to understand customer value.
Significant changes to technology, such as deployment of service-oriented architectures (SOA), is enabling change in the business model employed by retail banks by granting them enhanced flexibility in service provision. This, in turn, grants them the ability to understand a customer’s value and react accordingly, for example by packaging products at competitive prices. It can be a more complex task than simply implementing a specific customer relationship management (CRM) system, but it is proving to be one that a number of banks are finding rewarding as they change focus from product orientation to customer orientation.
