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An interview with Michael Spanoudes of NCR

By Syed M. Aslam
 April 01 - 07, 2002

Teradata, a division of NCR Corporation — the global leader in providing technologies designed to enhance, capture and analyze interaction among customers in retail, finance, communications, manufacturing, travel and transportation — formally launched its Customer Relationship Management (CRM) by holding a first of its kind seminar in Karachi on March 27. The seminar focused on the financial sector, particularly banks, aimed at creating awareness about the importance of CRM in the banking sector.

Mr. Michael Spanoudes, Area Solution Team Leader and Specialist for Banking and Insurance industries, NCR Middle East/Africa, made a detailed presentation on CRM Solution and its relevance to the Pakistani banking industry. He talked about benefits that CRM solution, backed by Teradata warehousing and call centers, offers to give a bank an edge irrespective of its size to analyze information to retain its customers, increase cross-selling and most of all to convert leads into sales.

PAGE talked to Mr. Michael Spanoudes and the CRM solution with particular reference to Pakistani banking industry.

Dividing the Pakistani banking industry into three primary categories — the government or the nationalized banks, semi-private banks, and private banks — Mr. Spanoudes said that 'CRM is the technology which aims at bringing back the personal touch in the banking sector which has been lost over the years. CRM helps a bank to individually identify its customers and know them personally to offer personalized services at costs which today can be afforded by all banks irrespective of their size — large, medium and small — or services they offer- corporate banking, retail banking, etc."

He said that studies show that the portfolios of the majority of banks show that as much as 30 per cent of all the customers are very unprofitable, 50 per cent are marginally profitable while only a small percentage of them are really profitable. "Teradata's CRM solution help a bank identify all these various types of customers to help change the behaviour of its unprofitable customers, better use the inherent potential of the marginally profitable ones and retain the business of the small percentage of the most profitable customers.

"Data processing and information gathering alone offers no benefits to the banks, and for any organization in the financial sector, unless it is used to know your customers and their needs to effectively plan, satisfactorily addressed their problems and turn the leads into sales. CRM offers an affordable solution to the privitization-bound banking industry in Pakistan because if you are a big bank you still would like to retain your most profitable customers if and when the market forces come into play. Smaller banks, for whom cross-selling is the answer, can also benefit from the CRM solution is the answer.

"Retaining the best customers is all the more important, and most banks have an idea about the value of their customers, as it helps in increasing the profitability. On an average banks are losing 10-15 per cent of their highly-valued customers each year. If a bank does nothing it logses them all. On the other hand, the CRM solution offers the best return on its investment as results show that banks using it help retain between 8-15 per cent of these customers."

Mr. Spanoudes said that CRM solution can also help the government banks in Pakistan in downsizing at an affordable cost. "One of our model performance include analyzing the performance of each branch of a bank from a number of aspects; facilities' utilization, capacity utilization, customer interaction, selling various tailor-made personalized services as per the needs and demands of the customers.

"The Teradata CRM Industry Express offers industry-specific pre-packaged solutions which are tailored for many industries including financial services. It is a CRM solution which is inexpensive to install in as quickly as 90 days and ensures fast return on investment. It is backed by a basic data warehouse which comprises as many as 150 segments and uses the lexicon of a particular industry to minimize training time and maximize usability. The beauty of it all is that it can be had in bite size pieces instead of one big slice and can be installed in short duration at low cost. It is very attractive because of low price and offers significant return on investment — 2-3 time benefit on the investment in as little a period as 3-4 months. In fact, a CRM project is so successful that it never ends.

"There is an impression that while CRM is fine it is wrong to have it upfront. That's not so. While some other entrants lost sight about what they are doing. We at Teradata feel that a warehouse is not something which is owned by IT on the user side. Our principle is to build CRM warehouse in chunks, incrementally adding to it and Teradata is the only one to do it without promising."

Mr. Spanoudes said that the upcoming privatization of the big nationalized banks makes CRM solution a must for the Pakistani banking industry, particularly from the perspective of sheer number of customers. This will help them increase profitability by retaining the most profitable customers and cross-sell at affordable cost.