Rob Strickland has a dream: That banks will one day operate without paper. But unlike many other fantasies, this one is actually coming true.
As he sees it, technology is rapidly enabling financial institutions to use data to serve customers and to communicate with them online.
Strickland is vice president of sales and business development at Palisades Technology Partners. This firm provides technology to the retail mortgage industry. Palisades has worked with Ditech.com, Wachovia, CitiCorp and other bank customers. He recently sat down with The CRM Loop to discuss the state of CRM at financial institutions.
The CRM Loop: How does CRM differ for financial institutions?
Strickland: They are more highly regulated than companies in other industries. They have a lot more intimate data about their clients. Because of that, there are laws protecting the privacy of the client. They have to walk a very fine line between using the information they have, such as credit scores and financial information, but make sure it doesn’t get out to a third party in violation of a regulation or law.
The CRM Loop: How is that done?
Strickland: The software industry is trying to respond by providing these institutions with a system to enable them to look at a consumer’s data in compliance with current regulations.
The CRM Loop: What do banks need on top of that?
Strickland: Banks want a 360 degree view of customers so they can serve them over a period of decades ideally. They are looking to provide the car loan, the home equity loan, home improvement loan, mortgage and credit card. Today those product houses are managed by different people and different technologies that don’t share information. But if they worked in concert and leveraged information across product houses that was appropriate to share, they would know more about the customer and have the ability to service more of the customer’s needs. Take a 50 year-old with kids in high school who lives in the northeast. There’s been an appreciation in the housing market so there would likely be strong equity appreciation in their home. A bank would know that if they carried the loan. Now wouldn’t it be wise for the bank to say: “You have this much home equity, let us propose a low interest option to pay for college tuition?” Using demographic and financial data about the client and their financial picture, they can service the client in proactive ways.
The CRM Loop: But there are banks that do offer different products like mortgages, car loans and credit cards.
Strickland: Yes, some banks do have the different products now. But believe it or not, some banks, when you call to apply for a refi, will ask about your assets and credit scores even though they currently have your loan. Well, if they have your loan, why are they asking for that information? They should know their customer. Amazon.com has conditioned us to expect a level of service such that they know their customer. When I go in and search for a product, they greet me with information and proactively suggest products that might fit my needs, based on prior buying habits. In many ways, banks are trying to play catch up with this type of proactive philosophy.
The CRM Loop: How does a large institution share customer data successfully?
Strickland: Software can help. There are large institutions with disparate sets of customer data that they bring into their enterprise. With mergers and acquisitions on the rise, banks have to assimilate that information and cleanse the customer data. Job one is to make sure the view of the customer is accurate. If you have Tom at one address with a certain level of assets, you need a single truth across the enterprise, to accurately service them going forward. The other issue is privacy. Many customers want the luxury of knowing that their bank can anticipate their needs. So they have to be able to opt in or out for sharing information, demographic data, buying patterns, money they make, credit scores, how much is left on house and their interest rate. This type of information can greatly improve the customer experience by proactively addressing their financial picture.
The CRM Loop: Why do you think banks are looking into new technology?
Strickland: We went through a refi boom and the banks could not breathe, as they were executing so many transactions. They didn’t have time to think about implementing new technology. Now they want to use technology and solutions to better serve the customer, up sell and cross sell, while they’re lowering their cost. They have an interesting chance in the next two or three years to increase customer service while lower costs. That’s where we think the opportunity is.
The CRM Loop: How has the banking experience changed over the past 10 years?
Strickland: In general, Internet technology allows a customer to be more demanding and savvy. A customer will get involved in transactions to lower costs and speed things up. I haven’t waited in a bank line in 10 years. I use a cash machine, drive through, or handle things on-line. How huge is that? Think about time, convenience and cost. Many banks may offer no fees or reduced fees if you bank on-line. That’s what we expect. I’m not saying wait on me, I’m staying give me the tools to give me a better experience. At Ditech.com, if you go to their Web site, it is chock full of functionality and user friendly capability to let customers calculate loan values, they have a property evaluation tool where you can put in addresses and get comparable price. You don’t have to register but if you do you may get other tools. The key is that they are taking information from you, populating that information and giving you a great customer experience. Some clients may get uncomfortable by that when a company knows who you are and addresses you by your name. My father at 78 might not understand how they knew who he was. But I like it when they tell me that they saw what I did last week and ask if there was anything more they can help me with. I like when customer service knows what’s going on.
The CRM Loop: And what’s the future of the customer experience in banking?
Strickland: Less fragmentation between the product houses. When one knows who I am, I hope that information is shared, appropriately, across the other businesses. All the while, the customer should have the authority to “opt out” if they so choose. Personally, I want the product houses to talk to each other so I don’t have to waste my time sending in redundant paperwork several times. And in the future, the whole standard will be paperless. My securities company charges me now for paper. They’re already starting this process. Many companies are sending out statements via e-mail and asking customers if they want to print them out themselves. If I have my mortgage with a bank and want to get a home equity loan, they should already know how much I’ve been paying and they should know my FICO score. They can update my income if need be but they should call me to say “you’re qualified for $50,000 – where should I wire the funds to? “ It is coming to that point and it should.
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