CRM in the Financial Sector - Boon or Bane?

Like every other industry the financial services sector is also witnessing a plethora of changes. Facing
umpteen challenges, the industry despite its phenomenal growth,
has witnessed a slump in some areas. The main reason? Changes, vast competition, increased
costs, decreased efficiency, inadequate client relationships and poor sales processes. Something vital
is needed to cut through the waves and make the sector boom. Organizations need to basically better
their relations with their customers in an effort to sustain them.

Financial firms find it almost impossible to have a complete and holistic view of their customers and
that puts them at a disadvantage when knowing their customers is a criteria. More often than not
selling financial services and products is infinitely more difficult than the work other industries face.
The requirements demanded of financial service employees right now far surpass those of the other
industries, which indirectly contributes to the fact that this particular industry lags far behind the
others.

The past decade has seen companies in this sector slowly realizing that there is an answer. The
financial services industry is now looking at customer focus as a means by which it can achieve lost
profits. The result ? An acute focus on customer relationship management - CRM. Adopting this
strategy has slowly resulted in financial firms, venture capital, private equity, investment banking
institutions etc, achieving an increase in overall productivity.

CRM for financial services enables the financial firm to know the customer better. In addition it helps
uncover potential customers and improves overall customer service. It helps build an advantage over
competitors as firms are enabled to increase their intelligence about the customer. CRM manages to
provide this information to almost every employee. CRM for financial services endeavors to improve
and encourage relationship building with existing and potential customers, the various departments
within the organization, management etc.

The dilemma that most financial institutions face is that they do not store their valuable customer data
in a comprehensible or easily assessable manner. In financial firms this intelligence is generally
scattered throughout the firm and is almost unusable. CRM encourages financial services firms in
changing their scattered data into something that can be used by every employee in an easy manner.
Who does it benefit? Analysts, asset managers, financial professionals all stand to benefit from the
implementation of customer relationship management.
CRM's benefits to the Financial Services Industry in a nutshell are:
Identification of potential customers
Provision of data regarding history and preferences of investors
Increase of customer knowledge of employees
Provision of an excellent view of customer relationships
Encouraging customer relationships
Increasing and improving financial productivity
Storage and provision of financial data of customers
Easy assess to collated financial data
Managing financial deals
Evaluation of a potential investment
Aiding client acquisition
Investment selling
Tracking and monitoring financial deals
Aiding the sales team in the provision of customers needs
Encouraging and assisting the increase of cross selling and upselling
Enabling the building of trust for brokers, agents and financial planners etc
Guidelines for Financial Firms opting for CRM:
It is imperative to pay additional attention to what other means the organization can adopt in
order to maintain and build customer relationships. Every possible means by which this can
be achieved should be scrutinized and indulged in.
Financial institutions implementing CRM need to realize the importance of online banking and
indulge in it. Since almost 55 million is being spent on it firms opting for CRM need to focus
more on online banking and understand that it benefits the customer enormously , indirectly
giving a hand to customer management.
It is highly important for financial institutions to analyze and understand the needs and
preferences of their customers. The data that CRM provides should be scrutinized and
studied sufficiently so as to really know the customer.
Segmentation should be undertaken with sufficient focus being made on each segment and
the right communication within the segment .The right marketing efforts should be made as
well so that the adequate balance between customer focus and profitability is achieved.
Firms need to focus their marketing efforts far more on the customer than on the product
itself.
It is imperative that sufficient and frequent customer retention programs are initiated.
Technology should always be incorporated in all business efforts to ensure the right
implementation of CRM.
Focusing more on the hottest trend - relationship banking will go a long way in the successful
implementation of CRM.
Sales and service should be carried out only after sufficient customer knowledge is obtained
and scrutinized.
Holding onto traditional practices is something most banks do. This should be avoided as
much as possible.
Pitfalls of CRM for the Financial Sector
The complexity and magnanimity of this particular industry makes it harder to adopt a holistic
and integrated customer approach.
Financial firms tend to focus more on the product than on the customer. In this respect they
are almost oblivious to them.
Since most financial organizations are considerably big in size, the cost involved is
considerably higher.
There are various challenges facing the industry and these all need to be overcome in order
to actually succeed at the implementation of CRM.
The Bottom Line?
Is CRM for financial services actually benefiting the financial services sector? The answer is yes.
Obtaining, maintaining and basically utilizing a customer database in an effort to maximize or improve
customer relationships will go a long way in increasing overall productivity. A failure to focus on these
relationships can prove detrimental while knowing and indulging your customer preferences can go a
long way in securing and raising profitability.
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CRM Invades the Insurance Sector with Amazing Results
The current scenario in the insurance industry is a complex and competitive environment tinged with
little stability.
The major hassle the industry faces is obtaining clients. This is due to the fact that the big fish in the
insurance industry dominate the sector. It has become increasingly difficult for this particular sector to
gain profits while curtailing costs. Acquisitions, mergers, have all contributed to the difficulty insurance
agents and other professionals from this industry face.

Long considered a job only restricted to insurance companies, selling insurance policies has now
become an option for banks as well. This has resulted in a lot of increased as well as unwelcome
competition. Customers tend to lose out as they are not buying from the right provider. In addition to
this the Internet has increased the pressure for insurance companies in capturing the market. All this
has succeeded in making the insurance world more complicated.

What is required is a comprehensive database of information about customers who hold your
insurance policies. The answer? Choosing a customer centric strategy can go a long way in achieving
this. CRM - Customer Relationship Management holds the key. CRM helps insurance companies to
ensure that the customer is understood better.

Right now insurers can achieve excellent policy administration; good billing systems etc but fall short
on the customer front. However this alone is insufficient to survive on. Insurers have now realized that
CRM is essential if they want to deliver high quality services since it satisfies current customers and
gains new ones. This is because policies get sold only if relationships are built. CRM solves these
problems with its user-friendly, web-based CRM tools that increase sales opportunities
Why Opt for CRM Insurance Software?
Insurance CRM decreases the time required to make product changes
A holistic integrated customer view
Targeted marketing
Customer retention
Increased growth
Increased policy sales
Increased insurance market share
CRM Insurance integrates marketing with other operations
Efficient distribution channels are secured
CRM provides the chance to reduce operating expenses
It provides for more affective and efficient communication
It improves the response time
It increases customers satisfaction
Insurance application queries/ claim status queries can be answered sooner
It reduces the time that is normally taken for printing
Policy mailing time is reduced
It decreases overall costs
Aids the call centre activities
Insurance CRM guarantees lead management
Insurance CRM Gains
Since most insurance companies are not adequately equipped to help their agents deal with customer
centered problems CRM insurance enables insurance organizations to survive in a tough economic
climate by using the data the insurance company has on the existing customers and then use it to
increase the level of profitability. It manages to enhance your customer relationships based on
customer's unique requirements.

A wealth of customer data is available but insurance companies do not have it readily assessable nor
is it coherent. CRM insurance software creates a holistic view of the customer which helps eliminate
customer irritation experienced due to this, when they need to identify themselves repeatedly.
Insurance CRM assists Customer Service Representatives when they are not able to properly access
customer data. Having ample customer information on hand enables a CSR to be more confident of
dealing with the client. It removes the chance of errors.

CRM enables customers themselves to do research on products, have answers to their questions etc.
In addition to this policyholders or beneficiaries can check their claim status, change their account
information, submit complaints etc. Insurers find that CRM is assisting them in their marketing efforts
as well through a comprehensive understanding of the client base. CRM aids the insurance
companies by ensuring that campaigns are more affective.
CRM Insurance Implementation - Getting it Right
Before embarking on a CRM implementation insurers need to:
1. Understand prospective policy holder requirements

2. Understand what products and services will retain them and increase profitability
It is imperative that the objective behind the implementation is clearly spelt out and
understood. Without this it is almost impossible to proceed further. Clarity of objectives both
CRM and general organizational goals is mandatory for Insurance CRM success. It is only
against this that the actual results are marked. Goals although varying from company to
company should be realistic and benefit the firm in the log run. Establishment of these goals
has to be done after excessive scrutiny of company requirements. The more clearly defined
objectives are the more chance your CRM implementation has of succeeding.
Organizations need to understand that the insurance CRM implementation is not merely
about technology. CRM encompasses far more than mere technology and transcends to the
customer as well. Organizations need to assimilate the fact that it is a combination of people,
processes and technology. Obliterating this fact will surely hamper the process.
Making the customer the focal point and understanding that it is about meeting their needs
will go a long way in ensuring success.
It is imperative that the entire organization realizes the importance of the implantation and
endorse it. It requires approval not only from top management but individual employees as
well need to give their support Staff need to accept the fact that this will do them good and
willingly give off their best customer support effort.
Implementing in phases is always easier and far less time consuming as well as being cost
advantageous. There are always added advantageous when the implementation is done in
stages rather than as a one time plan. It facilitates the easy involvement of resources when
done on a short term basis, and makes easy the constant monitoring of results so that
corrective measures can be taken.
Adequate metrics need to be established if the organization wants to succeed at its CRM
insurance implementation. Without this there will be no benchmark against which
performance can be measured.
It is imperative to train staff adequately in order to ensure that they are equipped to deal with
the CRM implementation. It is essential to have productive staff in order to better customer
service. Inexperienced staff will undoubtedly give wrong responses to questions and yield
wrong customer service. It is important to see that staff maintains proper customer service.
Training staff is thus essential.
CRM manages to put the insurance company in a position where it is able to let staff know
which customers are likely to leave and move to competitors. This helps staff take the
required steps to stop this from happening and prevents the loss of valuable policy holders.