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FST. We’re currently in some very difficult economic times. It might be easy for hard hit financial organisations to defer investment in technology such as CRM in favour of short-term initiatives. Do you believe that would be a mistake and what are the risks for companies that fail to pay proper attention to the needs of their customers?

MT. It is important that financial institutes make the investment in CRM during these times to ensure the customer’s trust. The latest news has not been good and people are very attentive to the performance and services of their financial institutions. This is the time to re-engage with the customers and make them the center of attention by knowing more about them, which enables the institutions to have more footprint in their customer’s portfolio. CRM enables this relationship.

FST.Can CRM be viewed as purely a technology issue or are there other elements that need to be considered if is to be employed successfully?

MT. Looking at CRM as strictly a technology buy is a big mistake and the landscape is strewn with companies who opted to buy their way out of trouble instead of properly looking at their overall strategy and integrating technology with the people and process components. The right technology is important but only after proper alignment of people and processes are made.

It could be argued that banks and other financial institutions have the most to gain from CRM as their products are often hard for customers to differentiate? How are financial institutions using CRM solutions to distinguish themselves from their competitors? What are the challenges facing financial companies in getting the best from CRM?

I do not think that financial institutions are any different than other industries because at the end knowing more about your customers in order to gain their loyalty, trust and advocacy is what all industries want to accomplish. Financial institutions have to look at a number of areas such as excessive service charges imposed on their customers for basically managing their own money. Customers are constantly charged for even conducting self service tasks. There are a lot of customers who grew up having a better one to one relationship with their bank employees who knew more about them. If you are familiar with the movie, It’s a Wonderful Life, the moral of the story is about a financial institution who survives because of the treatment of their customers. Financial institutions can all gain from taking those lessons in consideration when building out their CRM strategy.

FST. What are the benefits and drawbacks of in house versus externally hosted CRM solutions?

MT. It is not a secret that Software as a Service (SAAS) CRM solutions have made it easier to attain, maintain and allowed the installation to be live faster than ever. The security of the SAAS model is solid and the safety of the data can be better than in-house systems. This model allows for in-house resources to be routed to more mission critical areas and allow the organization to focus on what they do best.

There are times when the uniqueness and integration requirements will cause the applications to reside in-house but the open architecture and API capabilities of applications today pretty much allows it to work with other disparate or legacy systems.

FST. What impact is the rise of internet banking having on the CRM space? Does it make life for financial organisations simpler or does it increase complexity?

MT. I think it makes it easier because it reveals how customers want to interact with their financial institution. People are very time conscious and standing in line at a bank is not something they want to do. The ability to do certain tasks online is inviting and gives customers control they want. This control also allows them to find answers to their questions and service related issues. Utilizing Social Media to allow them to communicate with each other and express the way they want to be treated is also an area where financial institutions can listen more than impose.

FST. How do see the CRM space developing with reference to the financial industry? Do you foresee any particular developments and innovations?

MT. Certain CRM applications have noticed the need to be more industry focused so more financial related fields, processes and tools are delivered with that in mind. Extending those tools out to the branches and the people who directly deal with customers and businesses will enable them to keep track of their customers to extend more services especially in the Small and Medium Business segment. Integration more Social Media tools will also address the needs of the Web 2.0 world in financial institutions.

FST. Banks have recently experienced a number of high profile issues around data loss, leading to major reputational damage. How is it possible to mitigate the risk that the data central to CRM systems might fall into the wrong hands?

Communication on how the data is protected as well as educating their customers on how to prevent fraud. Communicate…communicate…communicate.

Michael Thomas is Director of CRM for Neighborhood America, an enterprise Social Networking and Mobile Marketing Solution provider. Thomas also serves on the Advisory Board of CRM and DW Experts, and on the Editorial Advisory Panel of Touch Briefings. He i s a CRM/ Web 2.0 speaker, panelist and writer, you can read his blog at www.crm2.blogspot.com.