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CRM for the Finance and Banking Industry - Part 1

Written By: Gabriel Gheorghiu
Published On: October 8 2009

How many different systems does a bank employee use when changing a customer’s contact information? The last time I moved and had to change my address, the bank employee used two systems, asked three or four of her co-workers for help, and took about 15 minutes to do it because the information from one system did not transfer right away to the other system. It goes without saying that this was not my best experience dealing with banks, but not the worst either. Actually, having implemented business solutions in the past, I find it quite amusing when it happens because it reminds me of the “good old days” when I used to get blamed for faulty systems.

CRM-related Challenges Faced by the Financial Services Industry

Financial institutions are facing specific challenges when it comes to business software and customer relationship management (CRM) software. Let’s take a look at some of these challenges:
•    Financial institutions began using software that did not include CRM functionality. Later on, they started integrating CRM products with existing software, or creating or improving existing products to include CRM functionality. In other words, different branches, divisions, etc., have different strategies and need to acquire or integrate different products.
•    Banks and financial institutions can afford to invest huge amounts of money in sophisticated systems, but cannot afford to implement them by the book (this can take months—even years for multinational companies). This is why it is easier to integrate different modules of separate systems than to implement a new system that covers all CRM needs.
•    Another challenge is related to laws and regulations created by local, national, and international institutions, which limit the power of financial institutions when dealing with their customers. Through legislation, governments try to protect their citizens from fiscal fraud and criminality (cyber-laundering, confidential information theft, etc.).
•    Financial institutions are facing major changes in customer behavior and need to keep up with the latest technological advances. E-banking, customer portals, and mobile banking are just some of the new services customers use and software vendors need to integrate into their CRM offering.

CRM Vendors’ Response to These Challenges

More and more CRM vendors are adapting their products to the needs of companies in different industries, and finance and banking is one of them. Oracle offers its CRM On Demand Financial Services Edition; and Ciber, a major Microsoft value-added reseller (VAR), adapted Dynamics for the financial and insurance market. CDC Software offers Pivotal CRM for finance; and EZ Data also has a product created for this industry, but the company was recently acquired by EBIX Inc.

In a future blog post, I will talk about the different offerings of the CRM vendors that tried to create products for finance and banking.
 
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