CRM in intermediated financial services markets: Competitive situation

This includes factors such as how many major companies are competing on each side of the market, their size distribution and their relative competitive strengths (eg products, distribution, branding). These factors tend to determine the risks if competitors get hold of information that has been shared. For example, if the customer list of a weak company gets into the hands of a strong company, then the latter will be in a good position to mount a competitive attack.

Relative strengths and weaknesses of different partners

This can apply to areas such as customer knowledge management or information technology — where sharing with a partner perceived to have a greater or lesser capability could lead to a perceived risk of better/worse exploitation of data and consequent problems with customers or competitors. Skills and systems compatibility problems can have their origin here.

Particular marketing/sales approach of the different companies in the supply chain

This includes in particular the extent of use of targeted marketing. In many distribution chains, it is not uncommon for the level nearest the customer to be involved in direct marketing. However, this is changing, particularly as the economics of managing high volumes of customer data are not necessarily favourable to this approach.

Perceived costs and benefits of sharing

These are usually determined by the partners’ views about the above factors. The research shows that there is little doubt about the general benefits — the issue is whether it pays the particular companies, and whether the partners can work with one another cost-effectively.

Availability of trusted independent intermediaries to help with process of sharing

The research shows that third parties are generally trusted with demographic and lifestyle data, some of which may have been contributed by or collected on behalf of specific partners. In financial services, this trust extends specifically to transaction data (eg credit cards).

Relationship between prospective partners

This includes strategic agreements to meet other objectives, and of course trust. The research showed that:

—     in general, companies are happy to exchange data about general customer characteristics, but reluctant to do so about topics such as sales and promotional response

—     where exchanging this kind of data, companies are likely to do so only in the context of a strategic agreement, backed by trust

—     the role of third party suppliers in supporting data exchange is important

—     the main benefits of exchanging data were targeting, competitiveness and cost reduction

—     the main barriers were perceived differences in analytical skills and, to some extent, process skills, plus perceived problems with systems incompatibility

—     in one case, perceived legal barriers were important

—     the quality of the respondents’ systems and business intelligence capability varied significantly, with some claiming an ability to report in nearly all areas, and others admitting significant limitations.

In the case of the two companies featured in this paper, the trust did exist. In fact, the Insurer had taken consultants’ advice about which of the banks to approach. The advice was simply: approach the one with the best track-record of cooperation, and where it is felt that trust is well established.

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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