May 28 2014

Small Financial Institutions Rely on CRM to Compete with Big Firms

Strategic use of customer data lets a credit union and an independent insurance broker personalize and improve services.

Since the start of the recession, large banks have faced stiffer competition from credit unions and community banks. Customers have defected in part because of the high fees that some big banks charge, but they have also been drawn in by smaller institutions’ reputation for more personalized service.

Many of these smaller financial institutions have extended their ­personal touch by leveraging ­customer service technologies as strategically as their larger brethren. Through contact center platforms, customer relationship management suites, point tools and analytics, these institutions strive to deliver a consistent, superior user experience across all channels, while steadily moving toward the CRM holy grail of a unified, 360-degree view of every customer.

It’s working for PSECU, a credit union for 400,000 Pennsylvania state employees and others throughout the Keystone State.

“We put a heavy emphasis on ­customer service because it helps us stand out from other financial ­institutions,” says Rick Long, PSECU vice president of IT services. “That service mindset is reflected in the value we provide through remote delivery.”

The nonprofit serves a specific ­community — mainly state ­employees — so it doesn’t focus its resources on building branches. PSECU’s remote strategy works because banking today is becoming more about mobile deposits, optimized service apps and online banking than brick-and-mortar locations. It is also about channel choice and consistency enabled by CRM solutions, Long says.

The credit union interacts with members in several ways: via its call center, mobile service apps, email and social channels. The customer data that feeds each of these must be consistent and accurate, no ­matter how many databases a service application pulls data from.

“Some customers always call, and others do almost everything online,” Long says. “Whatever the channel, the member experience has to be consistent and top of the line.”

When requesting a loan, for instance, members get an ­answer within 30 seconds of completing an application, whether they apply online or work directly with an agent.

To differentiate its brand through service, PSECU offers multichannel customer support using Avaya Communication Manager, a Voice over IP system that includes Avaya Interaction Center (IC), a contact center application that Long and his team have integrated with the credit union’s core banking system and databases. When a call comes in through PSECU’s interactive voice response system, IC takes the information the customer provides, retrieves relevant data and consolidates it all on an agent’s screen.

The credit union’s IT staff is in the process of rolling out a new CRM system designed specifically for the financial industry. Triggered when a customer requests service, the system will present a relationship history — along with targeted sales recommen­dations — on a second screen on the agent’s desk.


The annual growth rate for CRM software last year — the highest for all enterprise software markets

SOURCE: "Customer Relationship Management Software, Worldwide, 2013" (Gartner, April 2014)

Breaking Down Barriers

Smaller financial institutions like PSECU often choose contact center and service apps built on a single platform to avoid integrating multiple point tools, and risk creating an inconsistent experience across different channels. Service and support applications built on a common platform share the same source data, so the ­information customers get is the same whether they use online self-service offerings or talk to an agent.

“With end-to-end automated software, institutions can turn all their service channels into a unified experience,” says Albert Pang, president of Apps Run the World, a market research firm. “Integrated applications that leverage consolidated data, rather than mix-and-match tools, help financial institutions avoid alienating customers through disjointed service.”

ValMark Securities, an independent investment advisory firm and equity broker based in Akron, Ohio, is starting to see that elusive unified customer view emerge following an intensive data consolidation of its CRM information and other databases. ValMark’s customer data details information about two categories of users: 300 independent insurance representatives and financial advisers within its network who sell insurance and investment products to high-net-worth clients, and large ­certified public accountant firms that package ValMark securities services with their own offerings.

When Vice President of IT Geoff Moore came on board in 2010, ValMark was using Microsoft Dynamics CRM 4.0, but it wasn’t leveraging the platform across all business lines because of the company’s siloed IT and organizational structure. The insurance division had been running Dynamics CRM since 2007, while the investments group used another CRM system built on a totally distinct tech stack.

“Organizationally, execs wanted to see the big picture, but if they asked us for a comprehensive report, it was difficult to provide,” Moore says. Representatives and other key entities were tagged differently in each system, so there weren’t consolidated customer views. In addition, the setup meant IT had to support two CRM systems.

The chance to change that came in 2013 when ValMark was slated to upgrade to Dynamics CRM 2011.

“We debated doing the easy thing and just upgrading, or taking the hard route — reviewing all business requirements and data points to determine the most effective data structure for reporting and operational efficiency,” Moore says.

ValMark opted to do the hard work, which required Moore and his team to review some 1,500 data fields to identify shared data points between divisions, create standard tags and transform its CRM into a hub that consolidates all data related to each rep.

“Previously, when reps called in for information on an end client, we had to access two or three systems to give them a full picture,” Moore says. Now, ValMark can pull up a rep’s account and see every client — and all of their life insurance and investments — in one place.

“The 2011 version of Dynamics CRM is amazing because you can create different forms for different teams, ensuring insurance and investment guys only see the fields they’re authorized to access,” he adds. “With development tools that include dashboards and wizards, you don’t need to be an uber-developer. It’s mostly point and click.”

Moore’s team is now starting to capture data on prospects — including the products ValMark recommends to reps based on financial profiles of prospective customers — and track sales results. It’s also creating system interfaces to help the marketing team work with reps on developing targeted marketing plans.

Next, the IT team plans to build processes for matching new products on the market with potential buyers based on mining ValMark’s CRM data and alerting reps to opportunities.

The CRM Suite Spot

Optimizing CRM across multiple service channels admittedly can be complex. It’s not just about selecting the right tools for the organization, but also about taking the time to properly prepare the customer data.

This prep work involves data cleansing, deduplication, consolidation and systems integration. That way data silos that have multiplied across departments over the years can be combined to maximize the effectiveness of the CRM initiative and make it possible to get a quick and complete view of one customer or group of customers.

Like all technology deployments, CRM is about much more than the technology. The real focus is on how IT can help achieve business goals, Moore says. “For IT leaders, the ability to understand the business and how technology can improve it is more important than being a technical guru.”