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Rich Tehrani

This is pushing them toward more conservative choices as well as staff and budget cuts. At the same time, their client bases are becoming increasingly sophisticated and demanding, pushing them toward innovation and higher service standards. It’s an interesting combination of forces, driving them to do more with less.

RT: How are financial services firms responding to this situation?

JR: If they’re going to deliver more innovation and better service while dealing with cutbacks and write-downs, financial services firms have no choice but to become more efficient. They’re looking at their processes to identify areas that they can streamline and get more accomplished efficiently and cost-effectively.
Financial firms are also aware that economic uncertainty and negative headlines can erode their customer base if they’re not careful, so they’re focused on customer retention. This ties into their drive for cost-effectiveness because it costs less to retain existing clients and sell additional products and services to them than to acquire new customers.

RT: How can technology support these efforts?

JR: Current conditions are inspiring a renewed interest among financial services firms in customer relationship management (CRM) solutions because CRM supports both the cost-efficiency and customer relationship elements of their strategies for dealing with the downturn. CRM involves a lot of automation and process-streamlining around marketing, sales and service activities, so it helps cut costs and accelerate activities, increasing productivity. At the same time, it helps financial services firms get closer to their customers and understand them better, uncovering cross-selling and upselling opportunities.

RT: What are financial services firms looking for today in a CRM system?

JR: They know exactly what they don’t want: massive, amorphous systems that require months of costly customization. Many are turning to industry-tailored CRM applications that better reflect their business processes and data models right out of the box, allowing for a faster, less complex implementation. There are many discrete lines of business within financial services and they all have different needs, so firms can really benefit from CRM solutions tailored to each business line, especially if they can work together on the same platform. The top overall need is flexibility, because financial firms know that change is constant.

RT: What benefits are financial services firms deriving from industry-tailored CRM?

JR: Lower total cost of ownership and faster, easier implementation are two top benefits, but a better overall business fit is also very important. Financial services is a complex industry and firms don’t want to change their business processes to fit a generic CRM system. When they find a system built with a real underlying comprehension of their industry, they see the difference immediately. This isn’t just a benefit in terms of customization requirements but also in user adoption, which is critical to CRM success. Users take much more easily to a system that closely fits their environment and needs.

RT: What impact is globalization having on financial services firms in their CRM deployments?

JR: Many financial services firms operate globally and so do their customers. This means firms can’t afford to have silos of information dispersed across the globe; they need a unified global view of customers, relationships and client interactions. This holistic view can provide insight into opportunities and relationships in other regions they can capitalize on — for example, a European customer with U.S. operations not currently serviced by the firm. The challenge is to mix localization with globalization, supporting different languages, currencies, business practices, regulations and nuances while maintaining global unity and visibility. But it is achievable with a flexible system.

RT: What role can CRM play in helping financial services firms stay competitive?

JR: Differentiation is a growing challenge in the financial services industry because financial products and services are increasingly commoditized. Even if firms come up with an innovative investment strategy or product, it is soon copied by competitors. Accordingly, we’ve seen a lot of financial services firms recognizing the customer experience as a better avenue for differentiation: crafting a superior, consistent and value-added experience is harder to replicate and builds stronger client relationships – inspiring loyalty and referrals. To support this experience and ensure it is consistently executed across the board, they’re using CRM as the underlying “experience architecture.”

RT: How is the increasing use of mobile devices impacting financial services firms?

JR: Customers are using mobile devices so financial services firms have to keep pace. But the mobility challenge extends beyond using these devices to facilitate communication or even for mobile consumer banking. Laptops, cell phones, BlackBerry devices and other mobile devices are breaking down the barriers that define where business is done. Banking doesn’t have to take place at the bank anymore. So today’s financial users need anytime, anywhere access to their CRM data on mobile devices to obtain a full customer view and provide informed, consistent service no matter where the client wants to conduct business.

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