Lending & Credit Risk

The Benefits of Leveraging a CRM to Be More Community-Focused

Kylee Wooten

February 14, 2020

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Key Takeaways

To better serve their community, as well as stay competitive in this fast-moving environment, savvy CFIs are carefully blending digital innovations with their hallmark relationship banking practices.
CRMs help institutions scale processes, relationships, and communication, without sacrificing the personal relationships the bank or credit union has formed.
Using a banking relationship manager helps your financial institution capture all customer/member information in a consistent, efficient manner.

Community financial institutions (CFIs) play a vital role in helping Main Street to flourish and assisting community members with their financial goals. CFIs reinvest in their communities, supporting local businesses and helping community members make financial decisions. In fact, community financial institutions’ focus on community and personal relationships has been a major differentiator in the banking industry. However, proximity to branches is becoming less and less important to customers and members. Technology has enabled banks and credit unions of all sizes to create highly targeted, personalized digital experience to put customers at the center of their strategy, regardless of where they’re located. This strategy has paid off, propelling customer satisfaction by creating highly personalized advice that meets their needs, according to J.D. Power’s 2020 Customer Satisfaction Survey.

“Providing targeted, helpful financial advice has always been a key driver of improved customer satisfaction for retail banks, but until recently, the ability to achieve that connection with customers outside of the bank branch via digital channels has been inconsistent, with low rates of customer adoption,” said Paul McAdam, Senior Director of Banking Intelligence at J.D. Power, in a press release. McAdam says that this year’s study reveals a “tipping point” in banking’s digital transformation, where adoption and satisfaction are both gaining high marks.

Use customer relationship managers to elevate relationship banking

Community financial institutions can no longer solely rely on their proximity to customers and members to show that they are locally focused. To better serve their community, as well as stay competitive in this fast-moving environment, savvy CFIs are carefully blending digital innovations with their hallmark relationship banking practices. Innovations such as customer relationship managers, or CRMs, are becoming a must for institutions that are serious about creating and building meaningful relationships with their customers or members.

Relationship managers are exactly what they sound like: They help financial institutions organize and manage the relationships they have with customers/members and prospects. CRMs enable financial institutions to capture a 360-degree profile of their relationships to provide a customer-centric business model. On top of creating a more personalized, tailored experience for customers or members, CRMs also enable the bank or credit union to manage these relationships more effectively and efficiently.

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Customize banking relationships at scale

Creating highly personal communication and outreach to customers, members, or prospects is critical, but it can also be extremely time-consuming without the right tools and strategies in place. Whether an institution is focused on growing and gaining new customers or members, retaining and cross-selling or up-selling current customers or members, or both, a CRM can help the bank or credit union to achieve these objectives.

Financial institutions that leverage relationship managers are able to avoid laborious tasks, like inputting data in spreadsheets, documenting email exchanges, and sending calendar invitations, through automation. By centralizing customer information with a CRM, financial institutions can more efficiently:

Strategically segment to send highly targeted communication with customers/members or prospects
Set up triggers and notifications to make lenders aware of upcoming tasks that are due
Offer cross-sell and up-sell opportunities to customers/members at the right time and place

As a financial institution grows, managing relationships manually can leave a lot of opportunities on the table. CRMs help institutions scale processes, relationships, and communication, without sacrificing the personal relationships the bank or credit union has formed.

Using a CRM to drive institution-wide initiatives

When it comes to better understanding and serving customers in the community, the issue is not that community financial institutions don’t have enough data – it’s that they’re not able to properly organize and capitalize on the data that they have. Using a banking relationship manager helps your financial institution capture all customer/member information in a consistent, efficient manner.

Employing a CRM enables institutions to create reports to highlight, forecast, and track open opportunities for customers and for prospects. The data and reporting features are a major benefit for both lenders and management. From reporting daily activities performed to visualizing the pipeline and probability of close dates, bankers have greater transparency into business development trends. Connecting this data is key to segmenting customers or members and prospects. What are their needs? What channels do they use to communicate with the institution? What signals a “risky” customer? Relationship managers can help financial institutions answer these questions and understand how to engage these customers or members with the right message at the right time.

Leveraging technology does not mean that a community financial institution would have to surrender relationship banking to a fully digital experience. However, to stay competitive in today’s fast-paced banking industry, CFIs must be willing to innovate processes to adapt. Using technology like a CRM system would not only make banks and credit unions more efficient, but also elevate the personal relationships they have with their customers and members.