South African financial services companies are focusing on simplifying their businesses so they can become more strategic and improve customer relationships, says a Gartner analyst.
Kimberly Harris-Ferrante, Gartner research VP, said this is a major change from two years ago when companies were most concerned with IT prioritisation and management. Reducing IT complexity (or business simplification) was reported to be one of the lower-ranked priorities.
Harris-Ferrante was quoting from the preliminary results of her survey of South African financial services companies.
"Another significant shift saw companies assign cost reduction to the bottom of this year`s list of priorities after it ranked second in 2004," she said during her presentation at the Gartner ITxpo presentation in Cape Town this week.
Harris-Ferrante also said there is a clear shift in how local financial services companies view IT. "Our findings point to how the industry has matured over the last two years and that companies are thinking strategically rather than tactically," she said.
Complying with new regulations is the major challenge faced in this sector, although companies are now more focused on general business regulations than two years ago, when privacy and data protection was the greatest regulatory concern.
Core business
Harris-Ferrante said South African financial services companies are still grappling with the problem of aligning business and IT within the organisation. However, this will not change much in the future as there is still no silver bullet to this ongoing operational conundrum.
Looking at specifics, the study found 70% of companies are working on projects to improve their core business processing systems. This includes core banking systems, back-office upgrades and an increased investment in all core intellectual assets.
When asked about documented customer relationship management strategies, 30% of respondents said they had one in place, 40% were creating one, while the remaining 30% said they did not have one and weren`t in the process of actively creating one.
The companies surveyed identified using IT to enable cross-selling within the existing client base as their number one priority when it came to distribution and service. This has shifted from 2004 when companies identified focusing on customer information as their key priority in this field.
Data mining and analytics will be what most companies have planned to spend on this year, with 80% of those surveyed choosing to invest in these technologies to assist with service and distribution. Workflow and process management as well as sales force automation and lead management are also key areas of investment.
"Once again our survey has shown the South African financial services market to be ahead of the technology curve when compared to other EMEA countries, Harris-Ferrante said.
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