Analytical Software Primes People's Bank CRM Strategy

People's Bank is implementing analytical software to improve revenue and customer satisfaction--and it isn't the only bank to make customer-relationship management a priority. Financial institutions will focus on data warehousing, analytics, and knowledge-distribution technologies to increase sales and optimize the amount of revenue received per customer during the next few years, according to research from the TowerGroup released last week.

People's Bank is using HNC Software Inc.'s Profit Manager software to calculate the profitability of customers, relationships, products, and business units by pulling data from CRM, accounting, and core banking systems.

The software will help the Bridgeport, Conn., bank determine which customers are the most profitable and which are the most costly for the company. For example, one customer may always choose to interact with the bank over the Internet or via an automated teller machine, while another may regularly go to a branch for service.

People's Bank intends to use the data to improve cross-selling and customer-service practices as part of its overall CRM strategy, says James Sheridan, senior VP for People's Bank CRM division. He says the company chose HNC's software, which is designed for financial institutions, because it was better able to perform sophisticated analysis than its competitors.

The TowerGroup's Retail Banking services division found that retail financial institutions will spend about $4.3 billion on CRM this year, with $2.2 billion of that coming from North American businesses. That spending is expected to drive a compound annual growth rate of 6% for the CRM industry from 2001 to 2005.

The TowerGroup expects customer-knowledge distribution technologies, which include campaign-management and database-marketing software, to experience the most rapid growth of all the CRM technologies at about 7.8% compound annual growth through 2005. This technologies list also includes personalization software, which directs personalized messages at specific customers or customer segments and accounts for about 19% of CRM sales.