The number of software applications in use in banks today is enough to make anyone’s head spin. Loan and credit analysis software, credit card processing, HR and timeclock management, and many other routine business functions in banks are all handled through some combination of a software application and a database. At the apex of this technology is the core banking system, handling all basic account balances (think deposit accounts like checking and savings, CDs, and loans), transactions, and customer information. Every single transaction, ATM card swipe, and online banking inquiry reaches the core system in some fashion. Even with all this power, core banking systems fall very short in a few key areas: no ability to integrate data from any bank services that lie outside the firewall, no visibility into customer interactions, and no sales or referral management.
When customers call any major retailer or service provider today, they expect that the person on the other end of the phone has at least a basic idea of the last interaction that customer had with the business. How many times did that last customer ask for mortgage rates before getting them? Has this person, who has a six-figure deposit relationship with the bank, recently complained about funds availability? Without some way to capture and display interactions like these, banks are walking through a minefield of potential service failures. CRM makes it easier to track relationships and interactions and keeps customers from having to repeat their story every time they interact with the bank.
Sales and referral tracking are the bread and butter of almost every CRM, and many times can be the main selling point for a bank looking to modernize and energize its sales organization. Sales employees, like mortgage officers and investment representatives, are usually compensated in some way based on their referral submission and sales production. Many times, these programs are tracked on a spreadsheet somewhere in HR or by a manager and exist in a vacuum with no way to verify accuracy or compare to actual customer outcomes. Managing sales and activity goals through a CRM system creates direct connections between goals, activity, and customer outcomes. This means that employees know where they stand at any given point in time, managers have visibility into their sales pipelines, and those things can be measured against improvements and changes in customers’ relationships with the bank.
A popular phrase that is used when talking about any CRM system is “360-degree view of the customer”, but the reality for banks without such technology can mean partial or no visibility into their customer touch points. CRM starts by building the customer view with data from the core application. This basic data import mirrors the information that is already available through teller applications and forms the basis of everything else to follow. Banks sometimes struggle with getting a handle on all their data that resides in-house, and in most cases that in-house information is just the tip of the iceberg. CRM can integrate and display the information that is stored across the many disparate systems, creating a whole new level of customer service possibilities. Having a whole-relationship view of your customers is no longer a strategic differentiator, it is expected and a real hassle when it’s not available.
Implementing a CRM system can mean some serious changes for a bank, though, and not just because there is more software to learn. Banks live in a world where traditional, conservative business values meet the bull’s horns of regulations, technology, customer service, and information security. Recording and displaying every customer interaction can be an uncomfortable change for some organizations but are gains that are well worth the pain. CRM can be a transformative initiative for a bank when implemented as part of a philosophy of relationship and customer-centric growth.