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Study Reveals Importance of Business Intelligence for European Retail Banks


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Banks Face Revenue Growth Roadblock Due to Uncharted Customer Needs, According to Survey Sponsored by SAP

BARCELONA, Spain - March 23, 2006 - Only 23 percent of European banks today can readily access customer information on customer transactions, according to a new survey of 125 retail banks across 30 countries in Europe, the Middle East and Africa (EMEA). Conducted by the European Financial Management & Marketing Association (EFMA), the University of Mannheim and SAP AG (NYSE: SAP), the study reveals business intelligence as a key IT focus area for European banks, 88 percent of which aim to improve data quality in the next three years. Results of the study were released today in conjunction with the 28th EFMA Convention being held in Barcelona, March 23-24.

Based on self-assessment questionnaires, the study finds that banks fully understand the value of gathering, accurately storing, analyzing and retrieving relevant customer data. They realize that to clearly define such data into segments will impact the success of their strategies for new customer acquisition, cross-selling and multi-channel customer-management and this is more strongly pronounced since the first survey carried out in 2003.

“In this third year of our joint study, EFMA and SAP offer an even wider base of participating banks and deeper insights into the challenges faced by our members for transforming retail financial services to meet customer expectations,” said Patrick Desmarès, executive director of EFMA. “These key findings bring us to the heart of the problems, and the opportunities, for our industry. In the coming year it will serve as an excellent platform to help EFMA further its mission of provoking debate and discussion to encourage innovation.”

Key findings on customer information systems include:

* Whereas easy access to data on customer transactions, satisfaction and attitudes is a reality for only 23 percent of EMEA banks today, 88 percent of the banks intend to reach that level of data quality by 2009.
* One-third of EMEA banks analyze customer data on an ad-hoc basis.
* Only 11 percent have a regular and consistent data mining process.
* Eighty-nine percent intend to gather data by customer segment that covers either all customer-relevant data or only some key parts such as complaints, sales visits and invoicing.

“In an even more mature market, organic growth can be pursued only with the support of a more structured business intelligence process allowing banks to reach an appropriate level of information quality essential to have a deeper understanding of customer segments,” said Daniele Bonfanti, program manager at Financial Insights, EMEA. “Banks need to transform data collection and analysis in a highly flexible process to be able to really support the business decisions and initiatives and, more importantly, the need to move away from a business intelligence approach that is often too late, too slow, too rigid.”

Additional key findings include:

* Growth strategies to drive profits: An overwhelming number of banks (75 percent) favored growth over cost-cutting as their primary business strategy.
* Greater efforts to speed up response times: Sixty-one percent of survey participants expect to offer differentiated products and service propositions based on validated customer need by 2009, up from 12 percent today.
* Constraints with current IT systems: More than one-third of banks report constraints to their IT systems in achieving their strategic goals. In three years, 98 percent of these banks expect IT to support their business strategies, as well as provide competitive advantages.

“Banks’ IT systems and organizational structure need to support information availability across the entire enterprise to leverage the potential of effective customer management,” said Richard Lowrie, director of banking strategy, SAP AG. “In comparison to the results of the study conducted in 2003, the new study reveals a correlation between a bank’s business strategy and the ability of its core systems to support customer-centric business processes. For SAP, the findings confirm that our development efforts in analytical banking capabilities meet a pressing and ongoing need in the industry.”

Note to editors:
For a copy of the study, titled “The Five Pillars of Excellence in Retail Banking: A European Benchmark Review – 2006,” please refer to the contacts cited below.

About the European Financial Management & Marketing Association
The European Financial Management & Marketing Association is a not-for-profit association with a membership uniquely composed of banking and financial services organizations in Europe. EFMA seeks to promote innovation in the banking and financial communities by fostering debate and discussion in a setting removed from the pressures of commercial competition. Through meetings and an open exchange of information, EFMA facilitates dialogue and collaboration among its members, creating a forum for the recognition and study of best practice.

EFMA is funded by membership fees and income earned from events and services. The fees paid by members finance an array of services strictly reserved for members. The income earned from supporting activities enables the association to reduce these fees. This original arrangement maintains EFMA’s neutrality, protecting programs and activities from commercial pressures and ensuring a standard of program quality that is highly valued by members. The loyalty of EFMA members, representing over three quarters of the largest banking organizations in Europe, is a testament to its effectiveness in performing this mission. (Additional information at http://www.efma.com)

About SAP
SAP is the world’s leading provider of business software solutions*. Today, more than 32,000 customers in more than 120 countries run SAP® software—from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP business solutions help enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industries, including high tech, healthcare, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

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