In 2024, the financial world has almost recovered from the consequences of COVID-19, yet it doesn’t mean that the horizon is free of other tough challenges. Financial institutions always strive to improve their customer satisfaction rates, comply with ever more stringent regulations, and keep their sensitive data safe.
And this is where the importance of a well-implemented CRM for the banking industry cannot be overstated. As competition intensifies, the ability to retain customers and improve profit margins through enhanced customer relationships becomes a significant differentiator.
In this article, we’ll uncover the key challenges every player in the banking industry meets when it comes to adopting CRM solutions and what benefits can be delivered.
What is a CRM in the Banking Industry?
CRM in the banking sector allows banking organizations to build a customer-focused business framework to understand the customer’s needs and demands and, more importantly, meet them with your banking and financial services.
Just like any organization’s success, high customer satisfaction and retention are critical for a bank’s success in today’s competitive market scenario. According to a study by Reichheld and Sasser, banking businesses can observe an improvement in the profit margins by up to 35%, just from the 5% growth in customer retention rate.
Specific Needs and Challenges of the Banking Sector
The banking sector operates within a complex environment with many challenges – however, we would highlight the following as being especially important for banks:
- Regulatory Compliance: Banks are subject to a myriad of regulations aimed at protecting customer data, preventing financial crimes, and ensuring fair practices.
- Data Security: Safeguarding sensitive financial information is also crucial in banking. Compliance with global standards like GDPR (General Data Protection Regulation) and PCI DSS (Payment Card Industry Data Security Standard) is needed to maintain trust and mitigate risks.
How CRM Addresses Banking Needs
CRM in banking is designed to meet the above challenges and more by providing powerful tools for customer data management, relationship building, and service delivery optimization. Here’s how CRMs do that:
- Compliance and Security: CRM platforms incorporate robust security features and compliance tools to ensure that sensitive customer information is protected and regulatory requirements are met. This includes encryption protocols, role-based access controls, and audit trails to track data access and usage.
- Centralized Customer Information: CRM for the financial services industry aggregates and centralizes customer data from multiple channels and touchpoints. This enables banks to understand customer preferences, behaviors, and financial needs more accurately.
- Integration with Existing Systems: Modern CRMs also offer various integration capabilities, which help banks to use existing systems while enhancing their functionalities with CRM features without disrupting daily operations or risking data integrity.
Challenges of CRM in the Banking Industry
Just like any other business, banks face several challenges when looking to adopt CRM software.
Data security
The banking industry is very sensitive to data security and aims to deliver an extra level of control over access to their records. Besides their clients’ personal information and account records, the entire banking system should be well protected against cyber-attacks and malicious software. Modern CRM platform providers are well aware of these concerns and provide excellent security measures, from role-based access permission to encrypted transactions and data backups, to ensure a high level of information security.
Integration with the existing tech stack
Pretty much every financial and banking organization has a legacy IT infrastructure and tech stack that might be complicated to interfere with. Most of the outdated software wasn’t built to work together with the modern CRM systems. It means that any bank can face the problem of integrating new solutions with the existing ones without any data loss and system failures. The good news is CRM specialists such as OMI can help you seamlessly integrate a CRM system of your choice into your company’s infrastructure and make sure the new solution works perfectly.
So when does the banking industry need to consider CRM adoption? The answer is pretty simple – ASAP because lack of data visibility provided by CRM can cost your organization loses in clients and profits. Moreover, a lack of customer-related information doesn’t allow you to thoroughly analyze your customers’ behavior and provide them with the quality of services they seek.
Benefits of CRM in the Banking Sector
Both customers and banking organizations can benefit from using CRM. The first ones get more personalized high-quality services, while the second ones get better control of their operations and can deliver this type of service. Here are the main benefits the banking sector can gain from using CRM systems:
Get and qualify more leads
CRM system helps you to reach out to your leads as quickly as possible to either help them with their challenges or understand that your service is not what they are looking for. As a result, the lead qualification process is sped up and your sales department can focus on converting leads into actual sales.
Build strong relationships with clients
Launch marketing campaigns, streamline communication, and provide a personalized approach to increase your customers’ satisfaction rates and make them get what they need and when they need it. Your clients will appreciate your care and attention.
Improve staff’s productivity
CRMs help to streamline processes across various departments, as well as to eliminate repetitive tasks, and let your staff focus more on clients and improve their performance.
Get valuable insights
The system analyzes data on your customers’ behavior such as chosen types of credit and debit cards, number of transactions, type of transactions, etc. This data can be later used by your sales and marketing departments to improve your services.
Drive new business opportunities
Every industry needs to keep up with the constantly changing economy and market demands. Analyzed customers’ data can be used to introduce new solutions to fulfill your clients’ needs. As a result, your business credibility, loyalty, and awareness increase letting potential customers know that they can trust your organization.
Operational Efficiency
CRM systems automate routine tasks, significantly reducing operational costs. For instance, by automating customer data entry and transaction logging, banks can free up valuable employee time to focus on more complex customer needs. CRMs also centralize customer information, which enables banks to respond to customer inquiries more swiftly, resolve issues faster, and capitalize on cross-selling opportunities more effectively.
Compliance and Risk Management
CRM systems ensure that banks adhere to stringent legal and regulatory requirements by tracking and managing compliance tasks and deadlines. Additionally, they help analyze customer data and transaction patterns, so that banks can identify potential risks early on, such as suspicious activities or non-compliant behaviors.
CRM Solutions for Banks
OMI provides one of the best CRM services for banks and financial institutions and offers customizable solutions to make sure their functionality perfectly aligns with your organization’s needs.
Salesforce for Banks
Salesforce is a good example of CRM in banking as it offers a great number of tools and services that can be used across banking organizations for process management and team collaboration.
Salesforce allows banks to gain a complete view of each client by unifying all your banking operations – in-branch as well as digital channels. Third-party integrations give you endless possibilities to build sophisticated task management systems for sales, marketing, and customer service that can help your bank increase process efficiency.
Process automation in the banking sector is essential to eliminate many tedious tasks that are essential to reduce operations costs, improve work efficiency, and gain more clients faster. Salesforce comes with a Marketing Cloud module, that allows you to manage everything from marketing intelligence to customer retention, and community engagement, for a centralized platform.
Salesforce consultants at OMI help you evaluate your business state and challenges and pick the right CRM configuration.
Microsoft Dynamics 365 for Banks
Microsoft Dynamics 365 is another great CRM solution that features a variety of tools for all kinds of business needs, from internal process management to customer engagement.
Microsoft Dynamics 365 along with the “Banking Accelerator” feature, allows banks to quickly develop intelligent financial services and innovative solutions powered by industry-standard data models. This data-driven “Banking Accelerator” helps banks to offer an improved banking experience – that helps them to stand out from their competitors and boost customer acquisition, loyalty, and retention.
Communication process automation and customer insights help banks to offer customized deals and personalized experiences for financial services. Positive customer experiences directly impact long-term customer relationships that result in higher retention rates and accelerate business growth.
OMI can help your organization implement MS Dynamics and power up your teams with full-feature tools to help your company grow. Make sure to reach out to one of your specialists and we’ll be glad to discuss your project in more detail.