crm for banking

Banking CRM: Use Cases, Challenges, and Benefits

Here’s a common myth about CRM: only certain kinds of businesses need one.

You need only look at the diversity of our customers to disprove that myth. We’ve helped all sorts of businesses get started with CRM – companies dealing in everything from ice cream manufacturing, to industrial pool cleaning, to aerospace and aviation.

The correct narrative around CRM should be: If you’re working with people, if you have customers that rely on you for something, you need a CRM system.

The banking and financial sector has picked up on this wisdom, and it’s made them one of the top CRM adopters in recent years. 

In the age of instantaneous customer service, the use cases for CRM are more abundant than ever. But — as with any business investment — there are considerations to make, challenges to overcome, and benefits to weigh before diving in.

This is especially true in the banking sector because you’re dealing with peoples’ sensitive financial information. Banks have an obligation to build trust in the communities they serve, so they must be very selective with the technology platforms they choose.

Let’s navigate some of the use cases, challenges, and benefits of CRM for banking.

Banking CRM Use Cases

A CRM is a multi-faceted solution. It has uses in marketing, sales, and customer service/support, which is why it’s so dynamic for so many kinds of business models.

But, how are banks specifically putting the power of CRM to work for them? Banks not only need to manage customer information, but also build strategies for acquiring and retaining their customers. Banking CRM enables these institutions to go beyond transactional data to learn more about their customers, anticipate their needs, and understand their frustrations.

Here are a few examples of how a bank could use CRM to do marketing, sales, and services better:

1. Segmented Marketing

How does that saying go? It costs twice as much to acquire a new customer as to keep an existing one? Banks can use their CRM systems to segment customers based on their account information, engagement history, the types of services they use, etc. They can build campaigns with messaging that resonates. Competition for customers is high, so relevant offerings and cross-sell opportunities are crucial for keeping existing customers engaged with your institution.
 

2. Rethinking Processes for Profits

Banks struggling to maintain profitability must look beyond the short term to understand how current processes are affecting profitability. A banking CRM can turn instinctual decision making to data-backed decision making to build this new reality.

One way to do this would be to create reports in the CRM that reveal which services are profitable and which are not. How many customers are actively using service “A”? Is it an initiative worth saving or is it costing the bank more to keep it going over time? If the bank encourages representatives to sign up customers for this service and they’re not using it, is the process really working? Would it make more sense to target different kinds of accounts during a different stage of the financial process?

It’s hard to tell if you don’t have the concrete data to reveal these trends.

A CRM can not only point out process gaps, but can also help the bank standardize new, more effective processes across all branches. Using an automated workflow, banks can alert sales staff when a customer hits a specific milestone and is ready to have a conversation about additional services. Not only would the sales team save time with repeatable processes, but the services they sell also would maintain better longevity and profitability over time.

3. Personalization and New Opportunities

Regardless of the conveniences of digital banking, there’s nothing quite like the power of a human-to-human interaction, especially if it comes at the perfect time. Service representatives can use CRM to make the customer feel valued while also opening the door to new opportunities with that customer.

For example, the bank could set up the CRM to alert service staff when a customer has a major life event. Did they recently turn 65? The rep can reach out to say happy birthday and remind them that it’s time to start thinking more seriously about retirement. Did the customer recently get married? The service rep can forward that information to the mortgage department. Using the analytics provided by banking CRM, customer service can evolve to a more personal (and profitable!) level.

The CRM can even improve personalization at the digital level. The tools provided by a CRM can be harnessed to initiate digital transformation and scale operations to the demands of the customers. That translates to faster banking, better mobile and Web experiences, and happier customers overall.

Banking CRM Challenges

Perhaps the biggest challenge for banks looking to adopt CRM is the concern about data security and controlled access. The good news is, CRM providers are aware of these concerns and have instituted security measures to address them.

In the past, most banks would have defaulted to an on-premises solution out of fear of security gaps, however, now is the age of the Cloud, and CRM security has been beefed up to meet the challenge.

CRM systems offer granular, role-based permissions for security and access. These roles can be set by the CRM administrator to ensure only specific parties can access certain pieces of information. Permissions can be applied to individuals or entire teams.

Encrypted transmissions, data center backups, and session time outs are just a few of the ways CRM companies ensure the security of Cloud data. It’s important to have a conversation with the CRM provider to understand the security features of their specific solution.

Another challenge with CRM for banks is the integration of a CRM with existing systems. While aligning the CRM to your other systems streamlines data management, it can also become highly complex (and expensive) if you’re trying to combine two tools that weren’t built to work together. The best way to sidestep integration challenges is to be upfront about your existing solutions, ask the provider about integration options, and find out how those integrations may affect your final costs.

CRM for Banking Benefits

We’ve seen use cases for CRM, but how exactly does a banking CRM help a financial institution? Well, let’s start by speaking in terms all financial gurus will understand: Return on Investment. The average ROI of a banking CRM is $8.71 for every $1 spent, and that’s just the beginning.

Imagine all you could do with that data:

  • Build stronger customer relationships
  • Create proactive services campaigns
  • Optimize your digital experiences
  • Identify and convert more qualified leads
  • Streamline and speed up communication
  • Calculate data-driven insights on customer behaviors
  • Improve customer experiences with your banking services
  • Boost customer loyalty and retention
  • Reveal buying patterns and customer preferences
  • Deliver insights for proactive customer service
  • Standardize and streamline processes across departments
  • Uncover trends and reveal new marketing opportunities
  • Reduce spend on initiatives that aren’t working
  • Analyze customer profitability
  • Define cross-sell opportunities faster
  • Save sales and services reps time by automating their processes

To get started with CRM for banking, contact us today. There are a LOT of CRM options to consider, and it can easily become overwhelming trying to assess which one is right for you. Our experts can help you define what you really need from a CRM and work within your budget to find the perfect fit.

Danine Pontarelli's picture
Danine Pontarelli
Director of Marketing

Danine is the Director of Marketing for Technology Advisors Inc. She spearheads TAI events, marketing campaigns, and social media efforts. Prior to her work at TAI, Danine was a copywriter in the B2B publishing industry. Her interests include blockbuster disaster movies, tank tops in an array of colors, used book stores, Clint Eastwood, and being surrounded by trees. 

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