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CU Snapshot
| 2Q '09 | 1Q '09 | |
| # of CUs | 7,982 | 7,998 |
| Members (millions) | 91.9 | 91.7 |
| Total Assets ($ billions) | 871.8 | 867.4 |
| Total Savings ($ billions) | 741.8 | 737.2 |
| Net Cap. /Assets | 9.6% | 9.6% |
| Loans to Savings | 78.5% | 78.8% |
| Loan Delinq. | 1.60% | 1.54% |
Customer Relationship Management Coming Back
Integration drives adoption of technologies and customer-interaction strategies
Customer relationship management (CRM) is experiencing a revival. Financial institutions are taking another look at CRM because of its value in helping them integrate delivery channels and better serve customers in real time, according to Bankersonline.com.
There are essentially three categories of CRM technology expected to influence IT spending through 2008:
- Knowledge technologies
- Customer interaction technologies
- Core systems
Investments in CRM technology are expected to reach $7.1 billion within the next three years, according to a 2004 report from TowerGroup, Needham, Mass. Core systems are expected to make up the largest segment of investment at 50%, followed by customer interaction technologies at 40% and knowledge technologies at 6%.
As more financial institutions look for ways to integrate their delivery channels, the transition from the data repositories, business intelligence, and decision-support systems that were the basis for CRM in the 1990s have made way for "customer interaction management" (CIM), according to Jerry Silva, senior analyst with TowerGroup.
Financial institutions tend to think of channel integration in one of two ways: either as a business process or from a data-management perspective, says Silva. The CIM model allows for both business process and data gathering to be considered together, based on existing technologies financial institutions already use.
"Essentially, the CIM hub takes channels as they're designed today and organizes them in a more logical fashion," he says. "It starts with best-of-breed products at the front office, where there's still a lot of specialized technology and functionality. For everything else that's common to all of the channels, the business process can be combined into a single repository."
A third piece to the hub considers data management as an online interaction with a financial institution's existing CRM data warehouse and is orchestrated through existing ATM and point-of-sale (POS) processing systems.
While channel integration and the CIM model of customer relationship management is just beginning to take shape, new customer interaction and knowledge technologies are available that could revolutionize customer service at the branch.
Branches are experimenting with smart cameras, cash dispensers, wireless terminals, and teller-assist stations, according to a September 2004 FinanceTech article, "Branch 'Bots' Make Banking Better."
An example of a system using a combination of smart cameras and sensing technologies is BehaviorIQ, developed by Brickstream Corp. With its network of video cameras and infra-red sensors, the system captures real-time customer behavior data that helps financial institutions reduce customer wait times, assists branches in matching staffing needs to customer load, accelerates teller processing times, reduces customer complaints, and allows institutions to test marketing strategies or assess the effectiveness of branch layout and design.
For financial institutions that want their tellers to mingle with and directly interact with consumers, wireless technologies are the answer. Because they are not tied to their terminals behind the counter, tellers can better assess consumer needs: directing them to personnel most qualified to answer their questions, or redirect them to automated channels.
The self-service kiosk has also proven to be fertile ground for experimentation in consumer service advancement. Some branches have installed small self-service kiosks at teller windows to manage automated deposit and withdrawal transactions, just as ATMs do. Kiosks have advantages, however, in that they give the customer the ability to speak to a teller directly if they have questions, and they reduce chances of teller error because cash is rarely, if ever, handled.
As channel integration matures, as Windows-based platforms replace the OS/2 architectures of today's ATMs, and as check imaging enters the mainstream, tomorrow's ATM technology will be able to offer services not traditionally promoted by financial institutions. Some analysts and manufacturers, however, believe in order for the technology to benefit the customer, financial institutions will need to prepare carefully and decide how they'll use these innovations.
"There's a huge opportunity to deploy new technology on ATMs," Ben Ensor, senior analyst with Forrester Research, tells Bankersonline.com. "The hard part is deciding which ones to do."
Besides being able to offer and sell an array of features and services, analysts and banking professionals believe ATMs will be the bridge between new modes of customer communication and an institution's CRM data warehouse.
"Personalization will be a big area of interest," says Silva. "Call me by name, remember the language I speak, my favorite amount of money to withdraw: it may sound trivial, but it makes a difference." He said personal alert technology through ATMs would also make it easier for customers to follow the status of services they may have purchased, such as loans. "These alerts could be little pop-up reminders, but they must be coordinated across delivery channels or the customer will become annoyed if this same message continues to appear in other areas after it was broadcast already."
So, while customer behavior management and wireless technologies will affect branch interactions in the near future, channel integration and using existing platforms like ATMs in innovative ways will give financial institutions the ability to see the bigger picture: that providing consistent information across all channels will allow institutions to leverage every customer encounter in the most efficient manner possible.
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