- Growth & Innovation
How to overcome 3 common CRM pitfalls in financial services
- Give new life to fragmented banking data to benefit your teams and customers.
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Customer relationship management, or CRM, is one of the most important investments a financial institution can make. But many companies encounter serious hurdles when it comes to implementation and usage.
These challenges can make it difficult to effectively serve customers and support the employees using CRMs. And over time, it can tank ROI.
The good news? By understanding the biggest CRM pitfalls, it’s easier to avoid them. We’ll explain three common challenges and solutions.
Financial services companies generally have four systems of record (SORs):
CRMs, by their very nature, excel at managing customer data. But many vendors market their platform as a one-stop shop for almost everything a financial services company could need, from personalized messaging to sophisticated analytics. The pitfall: using a single CRM (or CRM vendor) to fully or partially replace multiple systems of record.
As the saying goes, a jack-of-all-trades is a master of none. And in the case of CRMs, a single platform or vendor may not excel at various data management, automation and analytics. As a result, overcommitting to a monolith could hamstring your financial services operation – especially if there are more specialized tools on the market.
Our recommendation? For each of the SORs above, take a moment to define what you want to do with your data and pinpoint where you’re falling short. Then, explore a range of platforms to see if any meet your specific needs.
Maybe you’ll find a powerful personalization engine to upgrade your experience management. Or an AI-powered analytics tool that can see across your organization. No matter the software, choosing best-of-breed options for each data function can help you optimize efficiency, performance and outputs across the board.
Many financial services companies don’t just have one CRM instance – they have one for each arm of the business, from retail to wealth management. That can be a headache for employees.
For starters, a fragmented enterprise user experience can be frustrating to navigate. But it can also impact your team’s ability to efficiently offer highly personalized service. Employees may waste time logging into separate platforms to find relevant customer data and that takes time away from actual customer interactions.
Employees at one bank we worked with experienced this challenge firsthand. The bank wanted to modernize its digital systems for each line of business to better serve high-net-worth customers. But customer data was spread across multiple CRMs, so employees struggled to gain a unified view of each customer’s financial journey. If staff wanted to offer, say, a preferential rate on fixed CDs, it could be challenging to quickly find qualifying data.
How did this bank overcome this hurdle? In short, we helped it make customer data easy to access from a single location. This centralized view empowered anyone from call center reps to loan officers to offer more tailored service and guidance.
If your financial institution also has a fragmentation problem, consider taking a similar approach. Paired with the right automations, your team will be able to serve customers in powerful new ways. For instance, if a high-net-worth individual is nearing the end of their mortgage term, your system might automatically alert a loan officer to offer them competitive new rates – and check the rest of their financial profile for cross-selling or upselling opportunities.
The bottom line? With a less fragmented enterprise user experience, your team will have the tools they need to effectively support customers and the business.
We’ve talked about how fragmentation affects the employee experience. But that same problem can negatively impact customers, too. If your team faces barriers to delivering personalized service, customers may feel frustrated and undervalued as a result. When just 4% of banks say they have an excellent customer experience, that’s a reality you can’t afford.
One of the most common ways customers experience fragmentation is when they’re asked to provide duplicate information across financial service interactions. For instance, a high-net-worth individual might be a longtime wealth management customer. But when they apply for a mortgage, they’re asked to provide basic information that should already be on file.
This doesn’t just slow down the loan application process – it can also make them less confident in their overall financial services experience. Over time, these digital “papercuts” can erode valuable customer relationships.
As with the employee experience, centralized and integrated data is key to defragmenting the customer experience. In the example above, for instance, the customer wouldn’t need to re-enter information that’s already available in their wealth management profile. Instead, the application would pull that data automatically.
What’s more: when a loan officer meets with the customer, they could see the entire financial picture at a glance and offer customized guidance (or even personalized offers) accordingly.
The overall result? A smoother, more satisfying customer journey that reinforces trust and loyalty.
The problems we’ve discussed in this piece aren’t necessarily new to financial institutions. In fact, siloed data and fragmented experiences have persisted for decades.
But that’s exactly the problem. The longer these problems persist, the less value financial institutions will get out of their CRM and the wealth of customer data at their fingertips.
With the right mindset and strategy, though, financial services companies can overcome the biggest CRM pitfalls and unlock the full potential of their data. That’s key to staying competitive and strengthening custom er relationships – especially in today’s market.
Tim von Kaenel is Chief Strategy Officer at CI&T.
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