A Technology Primer for CRM Systems

Customer Relationship Management is truly a pervasive change in the way of conducting business for a typical bank or credit union. It takes quite a bit of coordination - enabled by technology-to pull off the strategy successfully.

Applications in the functional areas of front-end or platform, business intelligence or analytics, and customer interaction management are seldom described cohesively and in their entirety. This picture is not always painted clearly by many technology providers, because very few of the providers offer the technology in its entirety. It is important to understand, however, that certain functionality, which crosses these areas, is absolutely required to implement a successful CRM strategy in a typical financial institution. Without this CRM base functionality, it would be difficult or impossible to undertake a CRM business strategy. You might even say that without these requirements, it cannot truly be CRM.

Relational CRM
Most financial institutions recognize the value of their personal interaction time with their customers. When it comes to positively molding the customer relationship, the discussion usually starts with empowering employees with better information and processes to improve the customer experience.

Relational CRM applications focus around the idea of interactions between employees and the customer or prospective customer. The front-end CRM application is interfaced to and complimentary to the core processing solution. Whereas core processing applications tend to focus on financial transactions, relational CRM applications tend to manage interactions through a combination of contact management functionality, flexible displays of key client indicators, and follow-up workflow.

Whether in branches, call centers or departments, relational CRM applications empower the employee to proactively deliver a consistent and always-improving experience to the customer.

Analytical CRM
To proactively manage customer relationships, there is a critical need for information about customers, which is not generated natively in front-end contact management applications or core processing environments. Usually, this intelligence-routinely stored in batch-oriented MCIF systems, data warehouses, or other repositories-has passed through validated analytical processes which aid in decision-making and personalizing the customer experience. For the purposes of the CRM business strategy, there are at least four analytical pieces of business intelligence necessary: householding, profitability, demographics, and propensity information.

Often overlooked, a consistent householding of account information from all sources is essential to a successful CRM strategy in financial services. Institutional information is often disparate and the core processing environment might not even be aware of credit card, trust, investments, or other information. Even if so, core processing environments do not typically aggregate accounts across the family household. Highly profitable households can appear to be unprofitable customers and key decisions are negatively affected.

Understanding the profitability of customers and the entire household relationship, likewise, is essential. Often, a CRM business strategy calls for segmenting and protecting the organization's most valuable customers. Much like the airline industry's gold and silver delineations, this understanding of "valuable" must be accurate, consistent, and appropriately used.

Consistently refreshed demographic information is extremely helpful in the process of managing a customer relationship. This information is normally obtained through a validated third-party and refreshed routinely to identify changes in customer lifestyle.

Lastly, information really began to take on meaningful action with the ability to find propensity information through statistical modeling. Modeling answers many of the big sales and service questions with total automation and with accuracy much greater than human analysis and judgment.

Interactive CRM
A financial institution's customers utilize a mix of delivery channels. Interactive CRM, sometimes called customer interaction management or personalization technology, aims to consistently deliver the CRM business strategy across all delivery channels. It is the glue that connects the analysis and the message to the different points of presentation in the financial institution.

While relational CRM applications address the needs of employees dealing with customers, a host of other applications usually manage the ATM, interactive voice response (IVR/VRU), Internet banking, statement and mail rendering environments. Customer interaction management technology provides the universal business rules and standard messaging interfaces to ensure a consistent and effective experience across the enterprise.

In summary, relational, analytical, and interactive function sets, working in concert with one-another and with the core processing environment, enable a CRM business strategy.

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Samuel Kilmer manages key alliances and relationships for Harland Financial Solutions. He can be reached at [email protected].