Financial firms recognize that their analytics capabilities are in need of improvement. Almost half of the survey respondents believe that their models are out-of-date, and nearly two-thirds said that the process for identifying and implementing models is either undefined, or, if defined, often a challenge. As a result, many firms find that their model development cycle is too long. While Aite Group's research indicates that that firms of all sizes plan to increase spending on analytics, spending is lackluster on building market mix and contact cadence models, which would carry the greatest impact.
"Database marketing and analytics has been a staple of many retail financial services firms, and some have developed sophisticated analytics capabilities to drive direct marketing efforts," says Ron Shevlin, senior analyst with Aite Group and author of this report. "However, improving the bank's ability to figure out who's most likely to buy the product-of-the-month - and raising campaign response rates by a fraction of a percentage point - shouldn't be marketing's highest priority. The main focus should be on figuring out how to best allocate marketing dollars between marketing channels, and how to integrate those channels within campaigns."