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Banking Leader

Foundational Elements for Community Bank CRM Success

Doug French | Line of Business Executive, North America Banking Solutions & Todd Hanke | Director Connections, North America Banking Solutions

August 19, 2019

Customer Relationship Management (CRM) has evolved to play a significant role in today’s community banks. With CRM being a long-standing fixture in the financial services industry, it’s easy to assume that CRM’s application has been mastered in the great majority of cases, but this is not true. A surprising number of organizations continue to perceive, erroneously, that CRM is little more than an IT project requiring only a minimum of input from other departments.

CRM initiative failures are more often institutional, not technological. The lack of a communication conduit between those involved in the relationship chain leads to an incomplete picture of the customer. Poor feedback can lead to technology being implemented without proper support or buy-in from users. If the bank staff is not completely engaged in CRM initiatives, success will become difficult to achieve.

Successful CRM initiatives at community banks distill down into three foundational elements:

  • Bank executives must answer the question of ‘What’s in it for me?’ for bank employees
  • CRM systems must be fed reliable data
  • CRM initiatives must have clear accountability

Let’s explore each of these elements in greater detail.

Answer the question ‘What’s in it for me?’

Fashioning a CRM strategy that encompasses the greater part of the enterprise should account for the people, the process, and the technology that make CRM happen. Assembling a successful CRM team is an effort requiring input from those who stand to benefit from effective CRM – namely, the majority of the people employed within the enterprise. Individuals driving a CRM initiative should come from relevant functional areas within a bank. Each staff member needs to understand how the benefits of CRM will improve their institution’s overall performance, as well CRM will add value to their particular role within the organization.

Banks invest in CRM initiatives to ultimately provide better service and sales support to their customers. CRM enables banks to give employee's better training that helps them face customers easily. CRM helps achieves better customer intelligence and ultimately contributes to better overall performance. The byproducts of CRM banking solutions are improved customer acquisition, retention and profitability.

Benefits to individual roles
Key members of a bank’s staff should be involved from the very beginning of CRM initiatives. A cross-functional team has to be born before the initiative is implemented or re-imagined. A kickoff assembly that includes participants from not just IT, but all affected business lines, as well as an executive sponsor with the organizational clout to keep the initiative moving forward and to mediate disagreements, is imperative. Once established, this kickoff should evolve into a set of ongoing, regularly scheduled meetings that promote ongoing communication of expectations and status, as well as provide a review mechanism in case “tweaking” the strategy is warranted.

Each key contributor on the CRM team needs to understand the unique benefits they can realize from a high performing CRM system. Some examples of these benefits include:

  • Operations will benefit from faster, more accurate access to account and relationship information, improving research efforts on tricky customer issues that end up on their desk.
  • Branches will be able gain access to broad demographic details on customers and prospects within their geographic areas helping them to cross sell and reach out for new relationships.
  • Call Centers will realize faster fingertip access to information to resolve service requests on the initial phone call.
  • Commercial lenders can save valuable time with rapid insight on business relationships with their institutions including a business owner’s retail relationship with the bank.

Sales improvement
The biggest winner within a community bank gaining a robust, high-performing CRM systems will be their sales staff. And increased sales benefits everyone within a financial institution. CRM benefits like better relationship and account views, faster access, prospect insight all apply. Many financial institutions seek to become more of relationship-driven entities.

True relationship banking enabled by high quality CRM allows for one point-of-contact oversight of all of a customer’s interactions with the bank. That person understands important customers, their business and their cash flow cycle. He or she is in a position at the bank to make decisions and recommendations based on conversations with customers about their business, risk tolerance, plans according to Smart Business online.

Reliable data to build upon

Without consistent and reliable data, accurate reporting and sound decision-making become very difficult. The ability to process and analyze customer data depends on the quality of the data itself. The quality of a CRM solution depends on reliable, consistent high-quality data.

Data quality in the banking industry is an especially acute challenge. Clean and consistent customer information must feed analytics systems driving automated decisioning programs. Regulatory agencies seek greater operational detail regarding all aspects of a bank, especially their loan portfolios. In a recent study, Experian noted a vast majority of financial institutions understand the value of consistent, high quality data.

Accurate data inspires confidence in CRM generated decisions such as recommending the next viable product for a customer based on their current history and overall banking relationship. Clean data within the banks customer information files provide a critical foundation for many CRM initiatives.

Enforce accountability

The best CRM tools provide insightful metrics, but they do not drive value if they are created in a vacuum. Bank employees must own and drive successful CRM initiatives. Individual roles must be assigned and owned by one person. And everyone on the CRM team should understand relevant roles and responsibilities which can include:

  • Managing the CRM initiatives business objectives
  • Delivering measurable business goals
  • Addressing the bank’s unique issues and requirements
  • Addressing the customer’s unique concerns and requirements
  • Prioritizing issues
  • Broadening job responsibilities, if necessary, to help ensure the initiative’s success
  • Modifying the organizational structure, as required, to facilitate the effectiveness of CRM
  • Authorizing adjustments to employee compensation, including the initiation of incentives as dictated by the needs of the initiative
  • Allocating the required budgets and resources

With accountability comes recognition and reward. Executive management should recognize key contributors to successful CRM initiatives who became owners of tasks and issues critical to achievement of project goals.

Not all CRM projects are guaranteed to become a resounding success, but by laying a foundation of accountability, reliable data and employee buy-in you can greatly improve your chances to deliver significant business value.