CRM’s Rebirth
Initially, CRM was viewed as a four-letter-word by some users who thought it would solve complex problems out-of-the-box. But the industry is now on a second or third generation of CRM. Companies, as the following examples show, have learned from experience. They are approaching the challenges more holistically, combining new technology with changes to business processes, and they are extending their approach to reach into a wider array of back-office systems while also creating more intuitive interfaces for users.
“Companies thought they could install a CRM system and all their problems with customers would be taken care of,” said T.S. Krishnan, director of worldwide cross industry solutions at Microsoft. He focuses on Microsoft’s customer care framework (CCF) initiative, already in use at a major U.S. bank, to bring integrated customer information to the desktop of the bank’s client-facing employees.
“Firms grossly underestimated the necessary changes in business processes,” explained Krishnan. “They forgot that CRM is just a tool, and if you automate a bad process it is GIGO.” (Garbage In, Garbage Out)
The second major challenge with CRM is integrating it with existing data sources, which can be significant in a large financial firm, especially one that has become host to multiple data systems through years of mergers and acquisitions. Many firms decided that connecting to all those back-office systems was too expensive, so their CRM became one more application in a stack of applications.
“Instead of solving the problem, it became part of the problem. You need to go through the whole process before you start extracting value – collate the data and put it through an analytical tool for predicting what customers will buy next,” Krishnan said.
Microsoft has entered the CRM field itself. Now that Web services make it easier to link to data sources, Microsoft CRM has taken advantage of the integration and created a platform that looks like the familiar and widely used Outlook but incorporates sophisticated CRM functionality such as opportunity management.
“Most organizations grossly underestimate the value, the ROI that can come out of a good user interface,” Krishnan added.
The latest CRM vendors provide more value to financial firms with deeper customer information, prompts for products that would interest a specific customer, and easy navigation so the CSR can provide answers and solutions in real-time without transferring the call. The result is greater satisfaction for customers, and for the client services staff.
Pivotal CRM: Leveraging Client Relationships to Increase Profitability in Financial Services
Relationships form the bedrock of financial services, and as financial firms search for ways to better differentiate themselves in the marketplace, their ability to build and leverage relationships is becoming increasingly important. Not surprisingly, then, client relationship management (CRM) technology is back on the radar of many financial services firms. No longer the crowded fledgling market it was several years ago, the CRM industry has come a long way, turning out increasingly sophisticated offerings.
With more than a decade under its belt, Pivotal Corporation is an established global provider of CRM solutions serving over 1800 customers in more than 35 countries. With its highly flexible CRM offerings, Pivotal has embraced a vertical product strategy, tailoring its solutions with significant depth to fit the business processes and data needs of specific industries. Financial services is one of the firm’s core verticals, and Pivotal offers a suite of distinct CRM solutions tailored to meet individual lines of business within the industry – specifically, those with the greatest relationship reliance and complexity.
We spoke with Jason Rushforth, Pivotal’s general manager of Financial Services and Healthcare, about the current outlook for CRM in financial services.
Why are financial services firms taking a renewed interest in CRM?
Financial services firms are recognizing that in an increasingly commoditized and competitive market, they need to put greater emphasis on managing their number-one asset: their client relationships. Furthermore, the increasing complexity of financial services relationships – with intricate dynamics such as consultants, custodians, influencers, syndicates, and households – is demanding more sophisticated tools to derive relationship insight, which a good CRM system should be able to deliver. The increasing availability of industry-specific CRM systems that better meet the specific needs of financial services firms is also prompting companies to reexamine their CRM capabilities.
How does Pivotal CRM meet the needs of the financial services market?
Pivotal offers a suite of distinct industry-specific CRM solutions that closely model the business processes and data needs of investment management (mutual fund wholesaling and institutional asset management), capital markets (investment banking and institutional brokerage), commercial banking, and private client/retail brokerage firms. These discrete solutions, tailored to each line of business, share a common platform, enabling them to be implemented either as standalone solutions or in combination for firms with multiple divisions.
What role does Microsoft technology play in Pivotal solutions?
A longstanding Microsoft Gold Certified Partner, Pivotal has worked closely with Microsoft over the years to create CRM solutions that integrate tightly with Microsoft productivity tools. This allows users to enjoy a more seamless, familiar experience, while also lowering training costs and allowing firms to capitalize more fully on their existing investments in Microsoft technology and skill sets. This leads to a lower total cost of ownership and higher user adoption.
With the range of competing technology priorities in financial institutions today, from compliance initiatives to portfolio management to trading systems, why should financial firms be making CRM a priority?
There are two integral reasons financial services firms need to keep client relationship management technology at the forefront of their IT strategy. Firstly, the competing technology priorities you mention are resulting in an increase in the number of different specialized, standalone applications financial services firms need to grapple with. This can significantly complicate the experience for end users, who don’t have time to navigate the various silos of data these applications represent. CRM can act as a lynchpin – a hub – in these processes, tying together diverse applications and internal and external data sources to provide the 360-degree client view they need to offer exceptional service and perform at their peak.
Secondly, while back-end systems such as compliance and portfolio-management tools are invaluable to financial services firms, they are of little use in two key areas that directly affect profitability: acquiring new clients and retaining existing ones. These are the areas where effective CRM can really shine: winning new business and keeping satisfaction and loyalty high among the existing client base. As such, CRM is a revenue-impacting investment financial services firms can’t afford to ignore.
www.pivotal.com
Salentica Systems: Deep Investment Industry Knowledge and CRM Functionality
Salentica Systems, Inc. was founded in 1997 to deliver client management solutions to firms in the capital markets area. It brings a deep level of domain knowledge of the investment industry in addition to client management expertise. Salentica builds the industry-specific modules on top of Microsoft CRM that clients require. It currently has more than 30 buy- and sell-side clients in institutional brokerage, financial products wholesaling and wealth management, located in North America and Europe.
Company president Bill Rourke has been involved in delivering solutions for investment firms for 20 years.
Based on what Salentica is seeing, what are the driving forces behind CRM adoption in the financial industry?
Clients are looking to bring all the information related to a client together to provide better reporting, more responsive service, better understanding of the value a firm delivers to its clients and to address increased compliance requirements. Clients are looking to have one integrated solution that does more than track name, address and activities. Our solutions are really a combination CRM and Management Information System.
For example, starting with the core Microsoft CRM, Salentica’s InstitutionalDesk solution for institutional brokers addresses the key requirements of an institutional sales firm, including research distribution, shared calendaring for conferences and one-on-one marketing, coverage list management, call reporting and trade/commission analysis. We also link to external information sources that clients rely on to gather market information.
You mention compliance – but CRM is not always cited for its usefulness in regards to compliance. Do you expect that to change?
We see it already changing in specific markets. In the institutional sales market, buy-side clients are demanding greater reporting on the value of non-execution services being delivered. This includes research, analyst and management meetings, conferences and even expenses incurred on behalf of a client. The larger buy-side firms are moving toward making this reporting a requirement to be included on their approved broker list. They are also allocating commissions to their approved brokers based on the value their sell-side brokers deliver.
Having a single integrated solution that enables a firm to provide reporting to clients is becoming a necessity. A single repository enables sell-side firms to better understand their clients and their profitability. They need to know what research clients are receiving, what conferences and one-on-ones they are attending, and how this is impacting trading and commissions. The single repository enables firms to understand, for example, how research and one-on-one marketing affects trading and commissions.
Salentica has selected Microsoft CRM to provide the core technology. Why was Microsoft CRM chosen and what benefits does it provide?
We worked with another CRM that was taken out of the market by Siebel in 2001. This hurt our clients who were forced to find a replacement. We wanted a CRM platform that we knew would be in the market long term and a partner that had the resources to support enterprise deployments and commit to building out the core technology. This is especially important given the consolidation in the CRM market today.
End users also want a solution that integrates with their primary desktop application, which is Outlook. Who could do that better than Microsoft?
What specific functionality should CRM solutions for this market include?
We see clients looking for solutions that address business requirements out-of-the-box. In the institutional sales market, research distribution, event/one-on-one management, call reporting and coverage list management are all key requirements. More clients are selecting our Expense Management module to address the reporting requirements of their buy-side clients for gifts and business entertainment expenses. Our Analytics module provides clients with a reporting and analysis capability to pull information together for management.
What type of results are firms finding using CRM functionality to address compliance concerns?
For institutional sales firms, CRM addresses reporting requirements that are becoming part of the business and can determine how their clients allocate commissions. A bi-product of this is understanding profitability and the value provided to a client. Institutional brokers need to know if the value being provided to clients matches commissions earned. Our Analytics and Reporting module gives clients insight into the value being provided to their clients in an easily accessible Dashboard format.
www.salentica.com