Monday, June 1, 2020

Financial CRM: Adapting to the Next Normal

Financial CRM, CRM for Financial Services, Financial CRM: Adapting to the Next Normal

Over the past 3 months, a virus a ten-thousandth of a millimetre in diameter has upended lives, businesses and economies across the globe. Financial institutions are no different.

They are staring at near-zero interest rates and a flattened yield curve resulting in diminished net interest income. Credit losses are expected to surpass $1 trillion.

It was only twelve years ago that a great financial crisis severely damaged the reputation of the industry. Since then, over the past decade, the industry has striven to rebuild its strength and reputation. Today, world economies are at a pivotal moment, with shrinking global trade, increasing income inequality and struggling small businesses. In a  twist, financial institutions are today well-positioned to serve as anchors of stability for customers, businesses, governments and societies as a whole.

Here's how they can adapt to the next normal.

1. Differentiated customer relationships
The COVID 19 crisis has accelerated changes in customer interaction into a hurricane. Today, financial institutions are under pressure with never seen before credit losses, while at the same time, serving customers who themselves are under immense financial and psychological stress. Organizations striving to be resilient will need to deliver differentiated customer relationships and drastically reduce cost structures. They are digitizing customer interactions, realigning workforce and operations to become more flexible.

At the onset of the pandemic, one of Asia's largest banks swiftly rolled out digital initiatives in record days. This included instant account opening, lending journeys, moratorium/forgiveness application journeys with automated decisions, quick access to government assistance schemes etc. The bank opened more than 100000+ accounts with eKYC, practise social distancing with video KYC and processed more than 300000+ applications during the initial days itself, thus proving to a major vector in delivering government aid and customer fulfilment.
 
2. Flexible business continuity with rapid innovation
Customer's today are heavily dependent on digital channels to connect with their financial institutions. Initial investments in digital capabilities are paying off big time for financial leaders and are spurring their peers to upgrade their digital offerings. The pandemic crisis is forcing financial firms to replace in-person sales, service and cross-sell approaches with digital and remote sales capabilities. Financial institutions that rapidly deploy innovations in customer engagement and reworking operations will be marvellously rewarded with customer gains and greater productivity during the next normal.

As the world was shutting down, a leading bank in Asia rapidly introduced eRM, a powerful integration between banking CRM and automated dialer, that empowered Relationship Managers to establish and maintain engagement with their customers anytime, anywhere, even from the comfort and safety of their home. They streamlined their calling processes and increased efficiency without the hardships of hardware installation or heavy IT support. As a result, despite the operations being rewired due to work from home, the bank was able to generate 1 million+ calls with 70000+ leads generated with 16000+ concurrent users in one month. 

3. Remote work simplification
Change is constant. Companies that didn't believe in 'work from home' concepts are now forced to send emailers detailing the benefits of working from home. Financial institutions are facing a period where placing large employees in small spaces is no longer recommended. In a drive to be prepared for the next normal, many financial providers are reorganizing to deliver higher agility, scalability and productivity.

Financial institutions have a unique opportunity to digitize and simplify work, activity processes with automation and strong collaboration platform. They are rapidly adopting internal digital collaboration platform, often withing CRM for financial services to share information with other users through posts, links or files. Integration with external platforms like Teams or Slack ensures that users are connected to each other from the safety and comforts of their home. 

4. Remodelling risk profitably
Thanks to the regulations and support provided in the aftermath of the global financial crisis, financial institutions entered the current crisis with significantly higher capital and liquidity. However, they are staring at a lifetime high credit losses, originating from corporate loans to industries that are highly impacted by lockdowns. The rapid outbreak of the crisis and the resulting financial uncertainty has left customers reeling. 

The swiftness of the crisis and uncertain variance in financial impact, historical and traditional financial data models are being thrown out and financial institutions are rethinking of how to use dynamic data for remodelling risk with a more personalized approach. Financial firms are aggressively diving into their voluminous customer data to go beyond traditional indicators of creditworthiness and offer tailored financial products with personalized advice and budgeting. They are accelerating steps to use data-driven personalized offerings and engagement that are highly tailored to a unique and evolving financial situation.  

Winners take a crisis as a stepping stone towards success. To renew growth, winning financial service providers will need to rapidly evolve their innovations and value propositions in response to swiftly changing customer, community needs and demands.