Riding the Dragons demands a credible IT strategy for CRM

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By: Wise Marketer Staff |

Posted on March 5, 2002

China and India are being singled out by foreign financial institutions as the next big prizes to be won, and that credible IT strategies for CRM and e-Finance are essential for their success, according to a new report from Datamonitor.

According to the report, Financial Services Technology in Asia-Pacific: Riding the Dragons, the ongoing deregulation, fragmented financial services industries, and the debt problems of state-owned banks and insurers are making Asia-Pacific an irresistible target for US and European financial services institutions (FSIs) � particularly for life and pensions providers.

Flexible IT strategies essential
Sin Jones, a financial services technology analyst at Datamonitor, and author of the report, says that investment in a credible IT strategy for CRM, e-Finance and multi-channel areas will be critical to the tactics of those new entrants who want to win new business in Asia-Pacific, and also to maintaining their competitiveness in the long term. After negotiating the necessary regulatory hurdles, the big challenge for foreign institutions will be to get a sufficiently localized IT strategy in place, backed up by an infrastructure that can develop and manage products that are specifically tailored to their individual markets.

Ms Jones added that "there are already a number of major foreign players in the life and pensions sector that now have licenses to sell policies in India. For example HSBC, Prudential, Standard Life and AIG all have a presence. They are looking to build up their life and pensions capabilities as they move towards an asset-gathering strategy. Gaining an early foothold in a new market is a good way of establishing credibility." The report suggests that to offer the fastest time-to-market for such localised services, banks and insurers must look to external technology companies. And this is set to become increasingly critical as competition increases from other foreign entrants and streamlined, privately owned, and already-present FSIs.

Local CRM, e-Finance and multi-channel IT systems
This is where packaged technology solutions will be invaluable, particularly in the core CRM, e-Finance and multi-channel systems. External vendors have the advantage over foreign institutions' internal IT capabilities in that many already have a strong local presence, and have products tailored to meet the necessary regulations and language requirements. Ms Jones points out that those vendors' packaged solutions offer the fastest possible time to market, giving their clients a much needed and critical head start as other players begin to pour into the market.

To build or not to build?
According to the report � which provides IT expenditure information for seven key Asia-Pacific markets � many FSIs remain sceptical of vendor applications but an increasing number of them are becoming aware that, if they are to maintain a world-class offering, it is becoming necessary to take a 'buy' rather than a 'build' approach. Ms Jones summarises: "This will enable them to have the fastest possible speed to market for mission-critical, next-generation applications such as e-Banking and CRM."

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