Vertical Focus: Financial Services

The good news for CRM vendors is that the financial services industry has consistently been investing heavily in CRM initiatives. The bad news is, the return on investment has not been stellar. "Financial institutions have spent more on CRM--often for less results--than any other industry," says Erin Kinikin, vice president and research leader for enterprise applications with Giga/Forrester Research. "They've got the infrastructure for call management and customer analysis, but haven't done a lot to act on the information they have." However, that does not mean financial services providers will be pulling the plug on CRM anytime soon, according to Kinikin. Instead, she says, companies will seek partnerships with vendors that can optimize the results of their initial investments. "This means 'processware' designed to handle customer problems beyond the boundaries of a single organization," she says, citing solutions from vendors like Pegasystems and FileNet. "One-and-done service (answering customer questions immediately, instead of forwarding calls between product groups) is also a big focus, requiring more integrated customer data." According to Kinikin, Giga is also seeing an increased interest in process optimization (using techniques like TQM or ISO) from a people perspective, since most financial institutions are still very siloed in their internal thinking. Other optimization technologies include cross-sell and churn detection engines (E.piphany, Data Distilleries, etc.), lead management (Marketsoft, WebTone, etc.), and other products that are a relatively small investment, but help leverage all the customer data financial institutions have been collecting. "Compliance management is also big, especially after the Patriot Act," Kinikin adds. One company seeking to optimize its existing CRM initiative is ABN AMRCO, a mortgage brokerage house. Though the company was already using a homegrown CRM solution, which included using products from eGain for Web self-service and Edify's workflow management software, the company used SpeechWorks voice recognition technology to make available via telephone the same automated refinancing offers that users received when they visited the company's Web site. "We saw that only about 30 percent of customers were visiting the site, so we wanted to replicate those offers and maximize our opportunities via telephone," says Garth Graham, vice president of customer acquisition and retention at ABN AMRCO. "Now all our customers can instantly be notified of potential savings if they refinance their loans, which gives us an incredible amount of new sales opportunities." Graham says that the ROI has been huge. "It's in the millions," he says. "We have stopped measuring the ROI from a savings perspective, because it has brought us so much actual revenue above and beyond what we have saved trying to reach customers in other ways." While larger financial firms are seeking out smaller vendors to tweak their enterprise suites, smaller firms may be hitting up those smaller players due to cost issues, according to Alyssa Dver, chief marketing officer at Sedona, a CRM vendor specializing in the financial sector. "The mid-market never had the kind of investment dollars the bigger firms have, so it needs highly customizable solutions without all the extra bells and whistles," she says. Dver agrees with Kinikin that all financial firms, regardless of size, are looking to get their money's worth now more than ever. "They want to see real results, and quickly," she says, "and they want a set of metrics to gauge value that they can see and feel."