Vertical Focus: Financial Services Firms Learn to Value Relationships, Not Transactions

Somewhere along the line CRM in the financial services industry became a tool that focused not on customer relationships, but rather on increasing the number of customer transactions and the profitability of each of those transactions. While profits and speedy service are still key, financial services firms are getting back to basics. The basics in the financial services world are the branch and the call center. Analysts predict that most of the CRM spending in the financial services industry will be on the branch, as well as on tools to help call center agents make the most of their customer touch points, not simply get the call resolved as quickly as possible. Back to the Branch In the past few years some financial institutions ignored the branch as a customer touch point; today the majority of new CRM activity is focusing on the branch as the main customer touch point, according to Jerry Silva, senior analyst at financial services analysis firm TowerGroup. "The branch is the real hot spot," he says. "Firms are beginning to realize that the technology in their branches is up to 30 years old. But now that they see the branch is still the number one selling point, they are beginning to focus more on the customer relationships at the branch level and not just on speeding transactions. "Firms want to arm tellers with more information about the customer, and treat them appropriately based on their individual experience with the company," Silva adds. It is more about the interaction, not about playing the demographics game. Karen Smith, research director at Aberdeen Group, agrees, noting that financial institutions must create and maintain a strict balance when marketing to customers at the branch level. "If people are being spammed at the teller level, that will not increase satisfaction, but lessen it," she says. "Analytics tools are needed to properly target the right offers to customers based on their specific history." Smith also says that financial services firms can use the branch interactions to market to their less profitable customers, like those who pay balances in full and are less likely to call in to a contact center where an agent can attempt to upsell them. Quality in the Call Center First-call resolution and increasing the number of calls an agent can handle have been the major focus in call centers in recent years, but in the financial services sector more focus is being placed on the quality of customer interactions, rather than on just the quantity. "There has been a lot of investment in the call center to integrate sales and marketing capabilities and inbound scoring," says Kimberly Collins, a research director with Gartner. She explains that as do-not-call lists limit outbound calls, agents need to get the most from each customer interaction, and to boost profitability through the call center. Smith says that financial firms are also investing in technology that provides more qualified leads through call center interaction, again focusing on quality and not quantity. "What good are 100 leads if they are all dead leads," she says. "Two or three qualified leads can mean much more revenue down the road." Key Vendors Analysts from Gartner, TowerGroup, and Aberdeen Group list the top vendors in key categories serving the financial services industry:

Suite vendors: Siebel, PeopleSoft, Onyx, E.piphany

Branch solutions: Touchpoint (a division of Fidelity Information Services), Argo Data, S1, Eontec, RightNow

Call center: Siebel, PeopleSoft, Chordiant, Amdocs, in-house built

Analytical CRM vendors (campaign management and CRM analytics): E.piphany, SAS, Teradata, Unica, Chordiant Industry Snapshot

According to Gartner, the financial services sector is expected to invest just under $420 million in CRM technologies in 2004.

Overall IT investment in the sector is $7.4 billion, according to TowerGroup, a financial services analysis firm.

By 2005, nearly 40 percent of IT spending will be directed towards financial firms' branch offices. Delta's Employee Credit Union Service Takes Flight Delta Employees Credit Union (DECU) is a $2.5 billion financial institution serving active and retired employees of Delta Air Lines and its subsidiaries. When DECU needed to update its branches to better serve its members it turned to RightNow. Once customers enter a branch they can input their name and the reason they are there into a RightNow interface screen. Then, if they are there for a simple transaction, they are put in an express queue for better service, according to Holly Chapman, project manager at Delta. "This way, members do not have to wait in line forever behind someone who is opening a mortgage or some other lengthy task," she says. Once a member signs in, the RightNow system automatically sends a message to the proper customer representative, based on the type of activity the member has entered into the system. Also, since Delta has empowered its tellers to do more than simple transactions, such as execute loan and mortgage applications, RightNow helps Delta track tellers' tasks to gain a better understanding of their performance. "Managers can look at an activity report and see why a teller went from 300 transactions one day to 150 the next, because they may have done a lot more mortgage applications, spent time handling fraud cases, and other time consuming tasks," Chapman says. --M.S.

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