Cheryl Rosenberg
Business Dev. Mgr.
(617) 612-3000 x 207 

By: Richard Smith
March 15, 2007

Financial Services Technology

We don't expect the cashier at our favorite coffee shop to remember our name, but often we encounter a remarkable person who not only remembers our name but also just the way we like our morning jolt of java. Isn't it ironic that customers rarely have the same experience with the financial institutions that are entrusted with their hard earned life savings?

Remember me? I am your customer.

Can your customers speak with one representative at your organization who can help them manage their entire portfolio? Do your account managers have access to the customer's entire portfolio of accounts with your institution? Do your customers know about your latest products and services?

If you answered no, you are not alone. Mega-mergers mean that more people are serviced by fewer institutions and new technologies have brought both competition and transparency to the market - each making it harder to earn profits from the average customer. The interaction model is changing as well. Financial institutions must act to differentiate themselves in the minds of their customers in order to prevent the commoditization of their goods and services.

How did everything get so cloudy?

Ongoing mergers have absorbed regional brands into national franchises, leaving customers feeling like they have lost their local financial partner. While few customers change institutions immediately following a merger, the loss of a local brand and the adjustment to new institutional policies and procedures cause long time customers to reevaluate where they keep their investments.

Customers are demanding new means of accessing their accounts outside of the traditional brick and mortar branch office - from ubiquitous access to no-fee ATMs to secure, feature-rich web portals providing account balances, transaction downloads, transfers, and bill payments. Providing these services is difficult for institutions who have invested in multiple ˜point solutions' optimized for retail banking, mortgage origination, and portfolio management. The diversity of products makes it nearly impossible to provide a comprehensive view of the customer's relationship across service lines.

Even the products have changed. Fifty years ago, people relied on their pensions for retirement income. Today, the security of a pension from a long time employer has been replaced by a variety of investment alternatives - from investment portfolios to IRAs and 401Ks. Our customers are confused; it's difficult for even those of us in the industry to understand the nuances of the new products and changes in tax law.

Seeing your customer as they see themselves

Ever have a prospect turned away because the account manager does not know of their relationship to one of your most valuable customers? Or a customer becomes frustrated because their investment manager knows nothing of their other accounts with the institution? Customers want to feel that we ˜know' them.

Integrating your internal solutions can improve the customer experience without being costly or complex. Develop a corporate definition of customers, accounts, and relationships. Include important relationships like influencers, household members, associates, and referral sources. Evaluate what information is stored in each of your internal systems that impact these relationships. Develop a standard process for managing customer relationships that will guarantee sharing and synchronization of changes to ensure consistency across your key systems.

You can significantly improve customer retention by implementing customer relationship management (CRM) solutions. CRM is an ideal centralized repository of customer information, including their accounts, relationships, and referrals. Typically leveraged by account managers, CRM can also provide the comprehensive view of the relationship to tellers and other customer-facing service roles that directly interact with your customers.

The value of personal relationships

This consolidated view of your customer relationships is the foundation for improving the customer experience - and organizational profitability - by helping representatives to position new products and services ideally suited to your customer. Unlike our original scenario, your customer is greeted by a representative who understands the scope of their relationship with the institution and can either directly assist them or direct them to the appropriate representative.

Even with this foundation, there is no substitute for good employees. Customers still want the comfort of a relationship where they are known by name rather than account number. Complexity has created a greater opportunity for financial institutions to redefine their role as trusted advisors to their customers. The trick is developing a model that provides a personalized experience to the greatest number of valuable customers. And don't we all want that personalized experience that makes us feel special?

Richard Smith is VP and CRM Practice Director at Green Beacon Solutions.