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7 Factors To Evaluate CRM For Financial Services

Before making a decision as to which CRM program to go with, you have to consider a few factors-

1. 360 degree view of the customer
2. Tracking buying behaviour
3. Intelligent marketing/cross selling campaigns
4. Auto alerts and reminders
5. Collaboration capabilities
6. Size and scope of your business
7. Integration with other systems

360 degree view of the customer

One of the first factors to look at is what type of information the CRM software can collect and display for each customers and is it easily accessible around the clock. Can the CRM solution display a holistic view of your customer to all the stakeholders allowing quick response in crucial situations? When working in the financial sector, you may need to collect a large amount of information about each customer for compliance and also to better serve them. This information should be updated regularly and contain details of their most recent transactions. All CRM systems allow you to track basic personal information such as the customer’s name, phone number and address, but you need to track other vital information and analytics too, if you want to provide the best service. For example, in the financial services sector, you may need to keep track of conversations you have about specific investments, risk appetite and goals. Storing this information in your CRM software allows you to easily refer to it before offering ant advice and it also helps in cross-selling.

Tracking buying behaviour

Another feature that you may want to look for in a CRM solution for the financial sector is the ability to track customer decisions and activities. For example, if you sell investment products to your customers, you need to be able to keep track of what products each customer prefers and purchases. By tracking this information, you can develop a profile of each customer and figure out what types of investments they like. This way, when a new product becomes available, you can easily print out a list of customers that may be interested in it. Tracking the past decisions of your customers will give you an inclination of how they might be willing to invest in the future and the most appropriate product to offer.

Intelligent marketing/cross selling campaigns

Many CRM platforms allow you to customize marketing messages to your customers based on the information collected. For example, if your company is promoting a particular mutual fund, you can easily scan through all of your customers that are interested in bonds and mutual funds. You can also see which customers are looking for more investment opportunities, based on discussions that you have had in the past. At that point, the CRM system may be able to send out customized emails to each customer with the pertinent marketing messages using customized templates. Monthly newsletters related to the investment scenario and other key trends can be sent to a specific mailing list too using a mail-blaster.

After sending out marketing messages, it may also be beneficial to be able to track the recipients’ responses to the message and have clarity regarding undelivered ones. Some CRM programs allow you to easily track this information using delivery reports and by generating alerts based on specific filter conditions. By studying this information, you can gauge how much interest the client has in the product that you offered in the marketing message and create follow-up tasks. Text message campaigns for time-bound offers can be created for instantly generating new leads and capturing their details through the CRM solution to ensure effective tracking and optimal conversions.

Auto alerts and reminders

When choosing a CRM solution for your financial services business, you also need to find one that generates reminders on the basis of configurable settings. One of the most important factors of being successful in the financial services industry is developing relationships with your customers. CRM today incorporates impressive social networking features to facilitate viewing profile information, comments and mutual friends. They will also remind you of important dates in the customer’s lives such as birthdays and anniversaries, this can go a long way towards helping you grow your relationships. Most CRM programs even integrate with automated mailing services to send birthday cards or other greetings to leads and customers. Customers like being remembered and enjoy the personalized touch.

Getting reminders from your CRM program can also be beneficial when it comes to selling new products and services to your customers. In some cases, you may approach a customer about a particular product that you want to sell and he will tell you to check back in a month. At that point, you can input this information into your CRM program and set a reminder for the appropriate day and time. An alert can be set for a few hours before the scheduled discussion to ensure all related open activities are completed and you are equipped with up-to-date information to increase your chances of winning an opportunity. Most customers will be impressed that you remembered and are well-informed, thereby being more receptive to your proposals.

Collaboration between all stakeholders

Depending on the size of your business, you may also need to be able to collaborate with multiple departments, partners and even customers. If the financial CRM solution offers the ability to allow multiple users to access and input information, this will increase synergy in the business and help to serve the customers in the most efficient and effective manner.

For instance, when someone from your company talks to a customer, they can take notes on the conversation and input that information into the CRM program. Then when someone else from contacts the same person, he will be able to see the content of the last conversation with that customer. By seeing this, the employee does not have to rehash old information that the customer has already been subjected to in the past. This will please the customer and save the company time overall.

Ideal Business Size

The size of your business also has an impact on what type of financial services CRM solution you should implement. Requirements of large organisations in terms of scalability, integration, processes are more complex and demanding than a small or a medium-sized company. These depends on the number of users, products offered, geographic dispersion of teams etc. You should evaluate both cloud CRM (SaaS CRM) and on premise CRM with an option to switch when needed based on an organization’s needs.

Integration with other systems

Before choosing a financial services CRM solution for your financial services, you may also want to find out if it integrates with other programs that you currently use to store important customer and product related information. For example, if the CRM system allows you to integrate with MS Excel, MS Access, real-time stock market systems, etc. this can increase efficiency. If users have to use completely different programs and re-enter data – adoption will be low, buying the CRM program may not be worth the trouble.

The ultimate goal of using financial services CRM solution is to increase customer loyalty and avoid churn in a competitive and crowded business environment. This software has the potential to improve the user experience by making the marketing and sales processes easier and more efficient. Because of this, it has the potential to keep your customers coming back for more. With most businesses, customers can get the same products you offer from a competitor. The reason they come back to you is because of the service you provide – accurate updates, market insights and timely advice.

Regardless of which financial services CRM solution you choose, make sure the solution provider has a good domain knowledge and past experience of implementing in organisation similar to your size and business. You should always check for references and tangible benefits the implementation delivered.

Buy and Hold? Not So Fast, Says Veteran Financial Services Advisor

When it comes to investing in the stock market, “Buy And Hold” is such a popular strategy that many people may not realize that there are other views on investing.

However, the stock market’s performance since its peak at October 2007 shows that the “Buy and Hold” strategy can be a disaster – and Dennis Tubbergen, veteran financial services advisor, reveals why instead he counsels his clients to devise a well thought out Exit Strategy.

The Buy and Hold Strategy or varietions of it has costs some investors quite a bit in the past 18 months. Consider, for example, index funds.

Portfolio decisions tend to be automatic and transactions are not made frequently, so in general expenses are often lower than those of managed funds. Investors who follow this strategy are often advised that they should buy an index fund which is designed to correlate with the performance of a market index such as the S&P 500 and to hold it for the long term.

The investors who followed this advice since the market peak of Oct. 1 2007 would have had a significant chance of witnessing a significant decline in the holdings in that fund.

Because the Buy and Hold Strategy is so risky in a volatile or bear market, Dennis Tubbergen, a CEO and financial services professional with more than 20 years in the industry advises that instead his clients carefully craft an exit strategy for their investment portfolios.

Tubbergen tells his clients that they should know when they would liquidate an investment, and that they should make that decision before, not after, making the investment.

The traditional advice to buy and hold investments such as stock and equity based investments can produce favorable results in a bull market.

In volatile, or bear, markets, people who use the Buy and Hold Investment strategy may find that they face steep portfolio losses.

That is why Tubbergen says that an exit strategy is a vital part of a disciplined and well thought out investment strategy that can increase one’s chance of investment success over time.

Serving the Rural Community with Affordable Financial Services

In every society, access to financial services for every citizen is a vital part of sustained economic development. More emphasis should be given to the roots of society: the rural sectors and working-class. But most of the time, it is very hard to identify financial institutions that provide these needed services, which could improve the livelihoods and reduce risk. Most commercial financial institutions do not provide the proper services needed to support these sectors, as it is not viable to provide cheap services to these communities. They are also unable to provide their services directly to the target group because of high transaction costs coupled with small transaction size and the higher perceived risk of financing clients without collateral.

Therefore, may countries today use alternative approaches instead. The goal is to bring all people into the country’s financial system so that they will have continuous and permanent access to affordable financial services.

There are several categories of financial providers

1) Formal Financial Institution: Professional entities such as licensed banks.
Problems: The small profits that can be earned may not compensate for the significant cost and effort involved in tailoring products and delivery systems, especially low-income people. Nevertheless, banks interested in this niche have successfully created a separate unit within the bank, or established a separate affiliated company before.

2) Informal Providers: Small member-managed entities that are not licensed.

3) Semi-Formal Institutions: NGO, small financial cooperatives, and community-based financial organizations

a) Cooperative Financial Institutions (Cooperative banks, credit unions to small village based cooperative entities)

b) Microfinance Non-Governmental Organizations

c) Community Based Financial Organizations (village savings, loan associations, savings and credit associations, self-help groups)

d) Traditional village-based providers (money lenders, small shops and input suppliers who provide goods on credit, and informal savings and credit groups)

The formal financial institutions approach focuses on building strong, stable financial systems that serve the entire population. This is the preferred approach when there are Labor banks, microfinance institutions, and financial cooperative/ credit union networks that are interested in broadening their outreach to the low-income society. The community-based institutions approach focuses on building strong informal or semi-formal community financial institutions, and then linking them with the formal financial sector.

The Purpose of Microfinance:

Microfinance is the provision of financial services, including savings, credit, insurance and payment services, to low income people. Typically, low-income people, especially those living in rural areas, have been unable to obtain quality services at a reasonable price from the formal financial sector. Microfinance is best supported through financial sector programs, however, in many countries where social funds operate there are no financial sector programs with a strong emphasis on access to finance issues, nor are there many viable microfinance institutions.

The Purpose of Social Funds:

Social funds are demand-driven mechanisms that channel resources to the poor and support subprojects that respond directly to the priority needs of the low-income population. They have been used in a growing number of countries to alleviate the social and economic effects of economic crises, cushion the impact of adjustment programs, generate short-term employment, and finance small-scale investments in poor communities. Access to micro-credit is not sufficient, the poor also need access to savings, insurance and payment services. Several wide-scale studies have been conducted on identifying lessons, best practices, and potential pitfalls; they include Panama, Yemen, and Eritrea.

Example Bosnia and Herzegovin:

The overall aim was to jumpstart the process of establishing a strong microfinance sector so as to help raise incomes, create jobs, and develop the smallest businesses. To provide access to credit to the economically disadvantaged, specifically low-income micro-entrepreneurs who had no access to credit from the commercial banking sector.

Problems in the past:

Government policy is oriented more towards creating employment and improving income in response to a crisis than toward long-term objectives. As such, social fund activities were not geared towards strengthening or reforming the microfinance sector, but rather towards using existing microfinance programs as channels for expanding employment. Further problems range from governments and donors using these organizations to channel cheap credit to rural populations to mismanagement of funds.

The Purpose of Credit Unions:

A credit union is a community based financial institution with representation from all socioeconomic levels. Main purposes are the economic, social, and political promotion of democracy and securing of financial stability, and to provide competitive and quality financial services responsive to the needs of its members to improve their livelihood. All credit unions operate within a common bond, such as employment- all members must work for the same group of employers or industry or in the same occupation. Credit unions are for service rather than for profits.

What is the right approach?

Consulting with communities to identify the demand for and supply of financial services among the working-class and rural areas to be covered. What financial services are provided, by whom, and how? What are the gaps in coverage, in terms of types of customers served, types of services provided, and geographical reach? Consider ownership structure, governance and management structure, financial products, customer base, ability to cover costs and existing relationships with professional financial services intermediaries