10 Questions to Ask When Choosing a CRM in Banking
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As Brett King, CEO and co-founder of Moven and bestselling author, once said, “If you don’t like rapid, earth-shattering change and you work in a bank, you should start looking for a new job in another industry.”
The financial services sector has never been static — banks and credit unions have long been subject to disruptive technologies, shifts in government regulations and tax codes, inflation and interest rates, a volatile economy, and more. And change can be a good thing: The advent of IT in banking has helped banks and credit unions solidify customer and member relationships, simplify day-to-day operations, and identify new revenue opportunities. It all depends on whether you choose to carry on business as usual or embrace change as it happens.
Based on industry forecasts, 2023 looks to be another year characterized by major changes. Read on to find out how these five banking and credit union trends are reshaping the industry, as well as how you can incorporate them into your business strategy.
1. Using data analytics to develop a customer and member-centric strategy
Over the past several years, there’s been a marked shift across multiple industries, including banking and credit unions, away from the traditional sales-driven, push approach towards a more customer-centric approach.
This customer-focused approach goes hand-in-hand with the emergence of digital banking and data analytics. Customers and members generate more valuable data now than ever before, meaning banks and credit unions are sitting on a veritable goldmine of information. More than half of financial services respondents in a McKinsey survey said their companies have begun monetizing data. What’s more, data monetization seems to correlate with industry-leading performance.
Of course, this all amounts to very little if you don’t have the right tools with which to manage and access the data. Advanced analytics tools — especially those that utilize modern customer relationship management (CRM) platforms — take information and analyze it to provide actionable insights (such as which customer segments are responding and converting across product groups and exposing real-time trends that can help you tweak an already inflight marketing program. Data analytics can also assess profitability and fit for products and services based on a range of other factors such as industry, credit tier, household segment, and market. Modern solutions can even track the success or failure of marketing initiatives and provide qualitative feedback on how these initiatives align with respective target groups.
2. Continuing to evolve — from multichannel to omnichannel
Multichannel isn’t new, but it continues to feature prominently on banking and credit union industry trends lists because the meaning has changed in the era of technology. Where multichannel once referred to things like print advertisements, ATMs, and local branches, it’s more recently expanded to include digital channels such as websites, mobile applications, and social media.
That said, these newer, tech-driven channels have yet to completely displace traditional, physical channels. The demand for in-person banking is still there. According to this Forbes Advisor article, a goMoxie survey indicated that 62 percent of consumers prefer to use banks or credit unions that have a physical presence, rather than a digital presence only. This suggests that, while interested in new technologies, customers still value face-to-face interactions. It’s clear that in addition to looking for ways to refresh their digital strategy, banks, and credit unions need to continue to focus on delivering quality customer service in their branches.
Establishing a strong multichannel approach is just the first step in elevating your customer/member service. To provide a truly modern, convenient service, you need to ensure all channels and interactions are connected and offer the same, seamless experience — whether digital or physical. This is called omnichannel support.
The idea of omnichannel is to tear down silos and unify customer and member data. It’s exciting because it provides smooth, consistent, and personalized interactions for the customer/member and arms employees with the power to solve issues faster, personalized service, and be more proactive with other products and opportunities.
In the interest of extending your multichannel reach and furthering your evolution to omnichannel, consider a centralized platform for customer and member data and history that is accessible by all employees and channels and identifies opportunities for upselling and cross-channel growth. And also look at other technology and collaboration tools that enable your employees to share documents, receive alerts, and facilitate referrals across business lines.
3. Strategically implementing new digital solutions
Innovation moves at the speed of light and it can be difficult for banks and credit unions, regardless of size, to keep pace. With Fintechs disrupting the industry and advanced technologies — such as the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), and mobile computing changing the way financial institutions do business, it’s no wonder 33 percent of financial services organizations plan to “invest significantly” in digital skills and education, while another 50 percent intend to invest “somewhat,” according to a study from Adobe and Econsultancy. For this reason, digital implementation and integration have consistently been one of the leading banking and credit union industry trends for the past few years.
Implementing digital solutions isn’t always easy, but there are measures you can take to make the transition easier. Consider investing in back-office solutions that evaluate your business’s performance, specifically of your people, products, and solutions that enable performance measurement across customer and member segments. This includes moving away from traditional point solutions in favor of cloud platforms that provide better interoperability, analytics and insights, and connectivity to common productivity tools and toolsets.
4. Doing more with less through automation and low code
One way to gradually introduce new technology to your business is to use automation in your back office. This includes replacing manual processes and paper with simplified and streamlined, automated business tasks and processes. By now, you’re probably already familiar with some of the benefits of automation:
- Automation increases productivity by cutting back on busy work and enabling employees to focus on more complex tasks
- It frees up employees to dedicate more time to customer service, improving the overall CX
- It eliminates the risk of human error in transactions and ensures consistent results
- It reduces operational costs, especially those associated with staffing and training
Banks and credit unions that take advantage of automation — that is, those that automate processes and residual operations — see an improvement of over 50 percent in productivity and customer service relative to those that don’t, according to McKinsey.
However, as the desire for automation grows, IT resources remain limited and expensive — hindering attempts to automate. This has led to a rise in the popularity of low-code development. Leveraging tools like Microsoft Power Platform, your business users can innovate without IT — automating their tasks, streamlining processes, and creating apps to solve unique business challenges. It’s a great way to cost-effectively introduce automation — and its benefits — to the organization. According to Forrester’s The Total Economic Impact of Power Apps, Power Platform solutions are leveraged to develop end-user solutions as much as 74%, faster than traditional application development with a more than 140% return on investment.
If you have yet to take advantage of automation or low code development, there’s no time like the present to begin. To ensure a solid foundation of success, it’s best to start with planning, governance, and education. Also, it’s good to understand where it makes sense to automate and where it doesn’t. You can do this by establishing and prioritizing use cases. For example, you might want to streamline new client onboarding or tighten up the automation around specific lending processes. Over half of bank applicants report being most dissatisfied with long wait times for credit decisions and a difficult application process, according to a survey from the Federal Reserve. If you have the opportunity to reduce end-user or customer effort, then you are on the right track.
5. Modernizing with CRM for credit unions and banks
To compete today, banks and credit unions must continue to grow. That means keeping existing customers and members happy while continually attracting new ones. Personalized and proactive service and value-added offerings are the competitive differentiator and investing in the right technology is the key.
Customer relationship management (CRM) systems automate and simplify processes, centralize and manage data, provide visibility and transparency, manage marketing and sales campaigns, and much more. By knocking down silos and making data accessible to everyone who needs it, CRM for credit unions and banks improves efficiency and productivity and helps them build stronger and more profitable relationships.
While CRM isn’t new technology — the term was popularized in the 1980s — modern, cloud-based platforms take advantage of newer capabilities such as AI, ML, IoT, advanced analytics, and integrations with other systems and applications. This presents opportunities for companies to leverage this functionality to elevate the customer and member experience even more. The biggest benefits of CRM for credit unions and banks include:
- Improved customer experience
- Increased sales
- Better data management
- Better customer engagement
- Increased customer loyalty
In the past, traditional institutions were reluctant to adopt CRM systems, but now it is considered an essential tool for most businesses. A Capterra study said 47 percent of users said customer satisfaction significantly improved, along with customer retention, when they were using a CRM system. Users of CRM also saw a 45 percent increase in sales revenue and a 39 percent improvement in cross-selling and upselling success.
Modern CRM makes it possible for financial services institutions to grow while creating a seamless experience for employees and customers and members. It enables credit unions and banks to offer even more personalized and relevant products that use predictive analytics based on individual consumer data to gain even more wallet share.
Download our infographic for 10 must-ask questions to help guide you in your evaluation of your next CRM platform.
Putting These Trends into Action with Hitachi Solutions
We hope these trends have enlightened you and provided you with ideas and solutions you need to better support your customers, members, and communities. Leaning into modern, cloud-based digital technology will position you to be more agile, responsive, and innovative and help you deliver the impactful experiences you need to succeed in today’s dynamic and competitive environment.
However, we know digital transformation can be challenging, and most companies benefit from the help of an expert to guide and advise them. Hitachi Solutions has been building cutting-edge data and business solutions for our financial services customer base for two decades. We take pride in our “go-to” status as a trusted advisor and technical powerhouse for financial institutions large and small — from banks and credit unions to clearing houses, stock exchanges, hedge funds, and private equity firms, to broker/dealers, national brokerage franchises, and fintech startups.
To read more from our thought leaders, be sure and check out:
- How Financial Services Organizations Can Optimize Their AI Data Platform Risk-free blog
- 8 Best Practices for Financial Services Modernization blog
- Everything Financial Institutions Need to Know to Keep Your Systems Safe and Secure blog
- Empower for Financial Services trial offer
If you’d like to learn about how your business can profit from CRM for credit unions and banks, or if you would like to put any of these modernization trends into action, contact the team of qualified financial services technology experts at Hitachi Solutions to get started today.