Siperian's Last Dance: A Customer-Driven Module for Financial Services

[Editors' Note: This afternoon, Siperian was acquired by Informatica, for $130 million in cash, according to a statement released by Informatica. destinationCRM will have more on this developing story soon.]

The financial services industry has weathered quite the storm over the last two years. Now emerging from the recession, banks and credit institutions are realizing their  old methods won't cut it — both in terms of generating revenue and in delivering customer satisfaction. Organic growth is essential for the industry to turn things around. In order for that growth to occur, financial services must double down on customer focus, which is exactly what master data management (MDM) vendor Siperian is planning to provide. The company's Extended Customer View product for financial services is designed to bridge data silos, presenting firms with holistic views of their customers.

"Financial institutions have realized...that the focus around the customer is an essential part of an organic growth strategy -- expanding business by new customers or, most important, expanding relationships with existing customers," says Bill Bradway, managing director of Bradway Research. Since the banking crisis, growth among banks has stagnated at levels around 2 or 3 percent, he says -- and in some cases as low as 1 percent. In order to boost the rate of growth to 4 percent, Bradway says, leading institutions are focusing on expanding relationships with customers, tweaking those relationships when necessary, and looking at customers from a risk management point of view. 

Virtually every bank today has developed complex data stores and databases, says Kirk Millet, Siperian's vice president of marketing. That data, however, is often product-centric, creating barriers toward a customer-centric view. Financial institutions often provide multiple services, such as banking, credit cards, loans, and even mortgages. The problem is that the customer data rests with each of the separate business domains. Not only does the customer data not bridge the various products or services, but that data is limited in breadth and depth, Millet says. Financial institutions miss out on cross-sell or upsell opportunities because they lack the valuable views of a customer's family, business, and even employee relationships. Millet says that financial services firms can use such insight as a "strategic lever to differentiate themselves and to come out stronger than the competition."

Customer loyalty with banks is at an all-time low, Millet notes, and their customer satisfaction levels have been on the decline. "In the post-banking crisis era, these institutions are now, more than ever, focused on profitable customers -- retaining them and wrapping additional services around those customers," Millet says. "With more services, [customers] are less likely to defect and move to another institution." Siperian's Extended Customer View (ECV) solution works with customer data to provide insights into opportunities -- and also provides preliminary risk management on customers. 

"The Siperian tool is very focused on helping institutions that 'get' this customer issue do a better job of it," Bradway says. "Part of the challenge with larger institutions is they began their life with technology [that was] product-oriented." In other words, lines of business develop around each product category — lending, credit cards, mortgages, etc. — rather than with the whole enterprise in mind. ECV is intended to help connect the account relationships across such product lines.

"The single solution set works everywhere across the enterprise," Bradway says, removing distinctions between consumer customers and corporate ones. Another perceived benefit of the solution is assessing risk at the customer level, rather than at the product level. The typical analysis of a customer purchasing a loan, for instance, doesn't comprise other services that the customer has purchased. With ECV, if an individual is unable to pay her credit card, the institution can associate the risk with her overall customer data, and then make that view available to the loan department, essentially identifying this risk much sooner than was previously possible.

ECV also brings household relationships to the customer view, according to Millet. A wealth management customer with two sons who have college savings accounts might raise a new kind of alert: The company could approach the customer with an offer for, say, an auto loan for the children. 

Bradway praises Siperian's tool, and notes that the real barriers to adoption are embedded at the institutional level. "What's needed to take advantage of the technology is an open and proactive and progressive mindset," he says. What adoption typically boils down to, he adds, is execution — and that essentially boils down to management.

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