Financial service industry is characterized by stead growth in terms of size and complexity despite the stiff completion among players stiff. It is projected that the demand for financial services professionals to outpace most other careers, as a number of major trends are contributing to an increased need for financial management. For instance retirement planning is becoming a major concern and also increase of the number of financial service available. Therefore this requires the players in the financial industry to put up systems that will handle its ever diversifying customer needs. Good customer relation forms the basis for success of any business.

According to a research that was carried out by UNISYS in Australia it was found out that commoditization of products, services and brands has led to the erosion of profitability in the banking industry and that the benefits of large-scale customer service or customer relationship management CRM (Customer Relationship management) programs have so far been insufficient in terms of promoting lasting customer loyalty (Lewis 2007). Therefore this calls for an effective customer service programs to be adopted by financial industries. Stressing on the importance of customer relation management Guenther Hartfeil, the vice president and director of customer information and analysis at Bank One Corporation, in Columbus, Ohio, said that Products are not profitable; customers are. He continues to say that when they evaluated their customer base, section by section, they established that each one needed a different approach to maximize profitability to the bank (Freedom magazine 2005). This is one of the major challenges the financial industry is facing.

Currently the customer service professionals in the retail financial industry are facing a lot of challenges as customers are becoming increasingly technically savvy and demanding. Financial institutions should take into account nurturing a positive corporate culture, investing in employees and setting up an environment that sustains the top levels of customer fulfillment. The demand for customer service in the financial industry is overpowering and requires financial institutions to quickly put together good customer service systems.  These challenges will require well-trained, technically competent customer service professionals to provide the financial industry with the support they need (David & Susan 2004).Unfortunately most retail financial industry use the traditional call centers that are ill equipped to deal with the ever increasing customer inquiries. This method is unlikely to succeed in this kind of environment. Lack of efficiency on part of customer service professionals is because performance of most customer support services currently in use  are measured in terms of cost reduction and not in terms of values creation- this has been due the notion that customer service is a cost to be minimized. Another challenge facing the customer service professionals in the retail financial industry is that they lack technical skills and appropriate training to serve today’s customers adequately and at the same time drive revenue. This is something that is not only going to affect the relation between companies and their customers but also the overall performance of companies. Also most retail financial industries separate their call centers and other customer support services from other functions in the organization something that hampers productivity and sales (Society of financial service professionals 2007).

Responding to the challenges facing the customer service professionals in financial services, the president of international division, regional bank in Coral Gables Florida David Konfino says that due to pressure of globalization facing the industry Increased responsiveness to customers is becoming even more important. He says that financial institutions must satisfy requests for information from their customers, as well as from regulators (Freedom magazine 2005).

Due to increasing pressure for quality services from customers, financial industries have to go through radical transformation and embrace modern technology to enable them effectively serve these demands. This will provide better ways of engaging their customers and establish a deep intimate connection with them. This industry has slowly but steadily started adopting modern technology into their customer support system. For instance, limited hours, locations and services have been replaced by a variety customized service options such as small satellite offices with extended hours, tailored lending programs and free 24 hour on-line services. These strategies will help to encourage the bond between financial industries and their customers, because here customer satisfaction is the central objective. High quality technology provides multiple touch points and digital solution that have proven to be vital to realize effective customer satisfaction. According to Gallup global study (Society of financial service professionals 2007) of bank customers, it was found out consumers are progressively interacting with their bank through its website, with more than half of respondents reporting doing so. It was also found out at least one percent uses a mobile device to conduct non-voice transactions with their bank. The propagation of high-quality touch points has resulted to increased engagement. This study showed that customers who are exceedingly contented with their bank’s website are seven times more probable to be engaged with their bank when compared to less-satisfied web site users. In addition, customers who use three or more website features-such as online bill payment, customer support, or financial calculators-tend to be more connected with their bank than those who use fewer features. With emergence of new technology the customers, needs and expectation in the financial service industry are becoming more and more sophisticated thus embracing new technology is not going to be a matter of choice but a compulsory tool (Society of financial service professionals 2007).

The employment of new technology allows financial companies to deliver their services more quickly and efficiently. For instance according to the vice president of Banco do Brasil, which is one of the largest banks in south America headquartered in Brazil (Freedom magazine 2005) said that more than 18 million of their customers are using internet banking services as opposed to the traditional banking procedures he further said that to bring their customers closer the bank was planning to make a huge investment in mobile banking. Responding to the impact of technology on financial service industry, the former president of Florida international bankers association (FIBA) Agustin Abalo says that International banks are using technology to serve their customers effectively over longer distances, he continues to say that they are still only at the beginning of their revolution in technology in the financial service industry (Freedom magazine 2005).

The 21st century is characterized by demographic shifts and emergence of facilitating technologies use that are constantly affecting consumer behavior and therefore the marketing function. For instance, demographically we are witnessing the following key trends: aging of populace, bigger proportion of working women, and rising ethnic diversity. Developed countries for instance the US and European countries, the population of aged people is constantly growing as compared to developing countries. This will force most financial service industries to take their businesses to developing countries with the aim getting a share of youth market. Also the increasing number of working women and ethnic diversity will require the financial industry to come up with innovative ways of bring every customer on board customer because their needs and expectations are increasingly becoming diversified (Pol 2000).

Financial service industry is characterized by stiff competition among players therefore nurturing customer confidence is an indispensable tool for survival because it is far less expensive to maintain a customer than to attract a new one. Customers come first' is the present slogan in the recent increasingly competitive environment. Loyal customers form one of the most valuable assets of the company especially when launching new services. To realize this, it needs a company to understand its customer needs and fast attendance to customer problems and complaints in a satisfactory manner. To understand customers needs one need to carry out a detailed research and survey of customers’ behaviors and how to position the company to meet their needs (Customer deviant 2009). Providing customer incentives is also another important tool for maintaining loyal customers. This can include offers and promotions that recognize loyal customers. This industries need to put in place a broad communication infrastructure so promote customer loyalty because this will ensure that they are in intimate connection with each of their customer. This can include use of using email, wireless communication, computer or face to face communication and even social networks such as facebook. Employees need to be properly trained on public relation because they represent the image of the company and establishment of an intimate connection between the customers and the company greatly depend how employees interact with the customers. The longer the customer is retained, the greater the opportunity of recovering relationship cost and relationship revenue resulting in better profitability (Customer deviant 2009).AMR Research, Boston, forecasts that the customer relationship management market will exceed $5 billion in 2000 and will grow 50% annually Tony Fisher, president and CEO of DataFlux observed that high `quality data is the cornerstone of any effective CRM program and many of their customers achieved superior level customer satisfaction and customer retention through data quality and data governance'. Customer relationship management (CRM) in retail business is emerging as a pivotal strategy for the 21st century's success (Monir 2008).

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