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Financial sector counting on new product and service developments Back  
European financial services companies are counting on new product and service developments to compete more effectively and to deliver enhanced shareholder value over the next three years, according to a report from Xerox, the document company.

The report, ‘Documented Financial Services in the new Millennium,’ polled senior management in a variety of financial institutions across Europe as to the key drivers for the industry in delivering growth and shareholder value.

Nearly six out of ten respondents deemed the development of new products and services as the most important factor. This was followed in order of importance by cost reduction, aggressive marketing, acquisitions and mergers and the development of Internet delivery channels.

Almost three in four financial services companies questioned currently offer services to customers over the Internet, with larger institutions more likely to offer on-line services than smaller ones. Of the institutions that do not offer services on-line at present, some 71% of them plan to do so by 2003.

Financial services companies see enhanced customer service, reduced costs to account holders, faster decision making and increased profits as the main benefits from Internet usage.

Elsewhere, the report found that while only 42% of financial institutions have formal Customer Relationship Management (CRM) programmes in place, 35% of those who do not, plan to implement one in the coming year.

Of those companies with CRM programmes in place, 89% reported improved customer loyalty, 72% better customer service and 52% reduced operating costs. The main tools deployed by institutions to enhance customer relationships are face-to-face contacts (76%), the Internet (67%) and the telephone (61%).

‘The financial services industry is as much about customer relationships as it is about financial services. Managing these relationships is becoming ever more critical as the industry becomes more competitive and products and services are commoditised with the advent of the Internet,’ said Ms Judy Vezmar, senior vice president of Xerox Europe’s financial services operation.

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