David & Goliath: How Small & Mid-Sized Banks can Beat their Larger Competitors with a CRM Solution

Technology is inevitable. The traditional mode of banking can no longer meet the demands of the modern day customer. Neither can such models attract new customers or retain the loyal ones. The shift towards sophisticated technology that enhances efficiency, effectiveness and sustainability thus is truly inevitable.

So, let us first take a look at how the financial landscape has changed in recent years. Firstly, a significant section of investors and other customers of banks are researching online for financial products and services. Almost everyone in the BFSI sector has online presence today. They are monitoring it, optimising it, enhancing it and managing quite well.

The typical banking customer has also grown more knowledgeable. Most of the people started taking an interest in financial products when the 2008 meltdown affected their pockets directly. That was a wake up call and since then, we have seen a surge in the number of questions that a customer asks the sales person who is looking to sell a credit card or an investment plan.

Using CRM in banking to stay ahead
Optimize cross selling with a holistic customer view
The reality that customers are smarter, in fact, works in favour of banks, if they are to take ample steps to ensure transparency and marketing effectiveness in their approach. CRM in banking can play a major role in allowing banks to attract, retain, up-sell and cross-sell to the informed and financially well-versed customer.

As mentioned earlier, to cope with the modern day customer, developing advanced systems that help enhance sales effectiveness, improve the level of insights that the employees have on customer data. One success story that made waves is that of a small traditional Texas bank. The bank faced stiff competition from the large players and was witnessing dwindling sales when a CRM solution came to its rescue. The strategy was to make sales a part of the business culture. From the janitor to the bank's CEO, the focus was on sales. And, it was not just the sale of financial products, but, also an informed and updated approach facilitated by the CRM software that helped keep a track on the clients and even ensure proper follow ups. From instant access to credit ratings to providing extensive sales training to all the staff, irrespective of their department, the CRM solution helped the bank raise its operations and marketing departments to the level of the larger players who were beginning to dominate its market.

Optimizing onboarding for new accounts
The question should not be whether the Texas bank's success story can be repeated or not but rather how such a model can work in an emerging economy. The fact is the basics of the CRM model and sales strategy can remain the same. However, adjustments come in the detailing of the sales pitches and the follow-ups. Unlike the advanced economies, there is still a significantly large part of the population in such markets without bank accounts or financial investments. Selling financial products to such customers is therefore a far more complex deal where creating awareness and then the demand are the most critical steps. The role of customer relationship management becomes even more essential in such scenarios.

CRM solutions with inbuilt auto-responses, dynamic templates, mail blasters, etc. help minimize and automate communication efforts and allow real time information exchange, thereby helping financial organisations deal more effectively with low-quality but high-quantity accounts that such non-banking locations provide. People without bank accounts or with little exposure to other financial products can be effectively called high potential customers for small and medium banks. Attention must be payed to efficient onboarding and customers' welcome kits should simplify the entire banking customer experience to ensure low customer churn. Once converted, there is a higher probability of these new account holders becoming lifelong customers of the bank or financial organisation.

Tailoring each customer's experience
Banks have been known to invest large amounts in redundant technology which are piecemeal solutions to growing solutions or soon become outdated as newer technologies are born. The notion is changing gradually about legacy systems as CRM in banking has actually beat expectations and generated vast ROI. CRM software has also evolved smarter solutions - small and medium banks can implement cloud CRM or enterprise CRM in a bespoke manner - taking it one step at a time without affecting performance or overshooting budgets.

At the end of the day, customer experience is what makes the difference. Without a real-time holistic view of customers generated through your CRM software solution integrated with multiple touchpoints, positive customer perceptions can be incredibly difficult to achieve and maintain. Today's banking population would prefer to be recognized at the bank's doorstep and escorted to their preferred account manager rather than wait in long queues for simple queries or submitting account opening forms. Regardless of size, it will be banks that match customer expectations and consistently improve their customer relationship management that will progressively grow.