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Meridien Research Inc. announced Wednesday that spending on CRM software in the financial industry should remain flat for the next two years, sure to be bad news for the many struggling software companies in the CRM space.
The Newton, Mass., firm, in a report titled “CRM Spending Update: Hitting a Wall or Taking a Time-Out” reports that financial institutions spending increase on CRM will flatten through 2003.
Global retail financial services CRM spending in 2002 will stay essentially level compared with 2001 at $6.7 billion, with no significant expansion expected until 2004, the report said.
Meanwhile, Meridien predicts that financial institutions will struggle to master the complexity of channel integration and deal with the cost of building and maintaining a data warehouse infrastructure that can support a wide variety of analytical decision support applications.
Meridien predicts that corporate financial services CRM spending, which it says is influenced mostly by commercial banks, will remain at $3.0 billion in 2002, and will not grow significantly until 2004, as many institutions examine their return on investment from less-than-successful CRM implementations.
“We foresee that top management at financial institutions that get CRM will carefully seize upon the market confusion to quietly strengthen their arsenal of capabilities, often at bargain terms,” said Tom Richards, Meridiens Research Director for CRM, in a statement. “In particular, we expect leading institutions will dig into business processes, probing for both cost savings and better service levels for customers.”
Meridien surveyed 55,000 financial institutions worldwide for the report. The research covered spending for both operational and analytical CRM systems, including customer information systems, workflow applications, data warehouse infrastructure and decision support applications.