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Chuck Epstein
Chuck Epstein
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Financial Services Firms Take Aim at Customers

Wall Street is hopping on a new trend -- investing in software that gather customer information in order to better target sales.

As banks, brokerages and insurers expand their Internet presence, they are grappling with ways to manage customer data and personalize product information. With so-called customer relationship management (CRM) software, financial institutions are beginning to cross sell financial products across an institution whether a customer interacts with the firm through a Web site, call center or branch office.

While only a few years ago, CRM was just a buzzword, the software today is helping to change the way financial services marketing is done. "There is no doubt this is one of the most vibrant areas in the financial services industry," says Bill Bradway, an analyst with Meridien Research in Boston.

Nor is the activity restricted to the U.S. Current estimates for external spending on CRM software in the financial services sector shows that Europe leads the way with about $675 million spent; North America spent about $575 million and Asia-Pacific spent about $325 million. By 2004, these expenditures may top $1 billion in Europe and $930 million in the U.S., as CRM global sales approach $2.6 billion, according to Meridien Research.

While it has varied individual components, CRM software acts as a two-way link between individual customer preferences and the offerings of the financial services firm. By combining both push- and pull-technology at any place where a customer and the financial services firm meet, it's now possible to do a range of activities including, customizing transactions to having a bank contact a customer when his or her bank balance falls below a minimum level. At this point the bank rep can try to get the client to increase that balance.

While the list continues to grow, some CRM software users now include: Citibank, BankOne, First Union, PNC, Charles Schwab, E*Trade, Merrill Lynch, Ceridian, Chase, Dun & Bradstreet, Bank Boston, Interactive Investor U.K., Massachusetts Mutual Life Insurance, MONY and Old Mutual.

Some of the leading providers of CRM software to the financial services industry include Diffusion, Vantive, Clarify and Vignette. Firms gaining market share on Wall Street in business-to-business sales for more front office and sales oriented tasks are reported to be Siebel Systems, ClientXchange (formerly Client Technologies), Onyx and Janna.

What's driving the financial institutions is a prediction that by the year 2000, 35% of customer contact will be done by electronic means. "The vision of CRM is to technology-enable enterprises to create competitive advantage through sales and marketing resource optimization and superior customer relationships," according to Aaron Zornes, executive vice president and service director of Stamford, Connecticut's META Group.


How Financial Services Firms Use CRM Software

Because the software and the applications are so customizable, financial services firms have found a variety of ways to apply CRM software worldwide.

With operations in 60 countries, CitiGroup, the largest financial services firm in the world, formed by the merger of Travelers and CitiBank, is deploying a number of Siebel programs, including its Siebel '99 integrated call center and sales management software for its CRM front-end systems in Belgium, Singapore and Spain. Bank customers in Japan have their telephone requests for product information immediately entered into a fulfillment center where a kit is mailed and a notice sent to sales reps to make a follow-up call. In Bombay and Madras, India, CitiGroup is also using Siebel software in "a heavy pilot program," according to Janet Clarke, managing director of global database marketing. "We are very attuned to the idea of creating intelligent ways to cross sell so we can integrate the ways we touch our customers in a seamless environment," Clarke says.

CitiGroup at one time considered developing the software in-house. But Clarke says it liked Siebel's "depth and breadth of products, as well as its ability to be user-friendly."

Back in the U.S., BankOne has deployed Vignette Software's Story Server 4.2, Development Center and Visual Designer as Internet creation tools. "We have used this suite of applications to expand the Web development area into other areas for database applications," according to Bryan Jalowitz, application suite manager. "For relationship management, we are using open profiling services for creating a national product disbursement scheme which allows the bank to see if a user has visited a site before. Visitors are then assigned a unique I.D., and asked for their zip code so it can then provide personalized information for their state, Jalowitz adds.

As a result of BankOne's merger with First Chicago last October, the new combined entity is now making its product offerings available nationwide. For compliance, marketing and service reasons, customer and product information is personalized for a particular state and these features are built into the bank's Internet site, according to Jerry Eichhorst, BankOne's senior producer.

In states where the bank does not have a physical location, banking services will be offered exclusively via Internet-based accounts. At the Web site, customers will receive personalized information in both public and private sites--where they get access to checking or trading account information, for instance. "Eventually we want to merge these two sites so we can bring product information to the forefront, or we can surface new information to them using Vignette products, including banner ads in the private area," Eichhorst says.


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