More than Managing Names and Numbers
A Wave of CRM
RBC is not alone at the cutting edge of CRM implementations. Though spending on customer relationship management is down from the heady 1990s, financial-services firms spent more than $5 billion on CRM technology in 2003, according to Needham, Mass.-based TowerGroup. And that spending will grow to $7.1 billion by 2008, says Kathleen Khirallah, a senior analyst at the firm. "The CRM concept will continue to produce value for financial institutions in 2004." But, the pendulum has swung away from customer knowledge investments - such as customer data repositories, business intelligence and decision support systems - toward customer interaction technologies, she adds.
Jaime Punishill, an analyst at Forrester Research in Cambridge, Mass., says CRM has become ill-defined. "You've got as many different CRM implementations as you've got fingers and toes," he says. It's not simply about managing names and data, asserts Punishill. "Once you've got that data, you have to do something with it," he explains. That means creating systems that not only allow advisers to manage information about a client, but blend it with a greater range of collaborative and analytical tools to allow advisers and customers to work in tandem.
According to Punishill, developments in four areas of customer relations will improve wealth management this year:
- Improved adviser Web sites. "The current sites are a poor man's version of the self-service sites offered by discount brokerages," Punishill says. By deploying collaborative technologies that allow the adviser and client to interact online - such as tools that allow for a visual exchange of information - advisers will be able to build tighter relationships with clients, he says.
- Liability management tools. Assets are only half the financial equation, asserts Punishill. Managing debt is an area overlooked by advisers, yet, if they can help clients manage debt better, advisers could free up assets for investing. The problem, Punishill says, is that "Most advisers have no clue how to analyze or sell liability products." So he expects tools like Financial Circuit's MoneyFind Active to "be all the rage."
- Integrated adviser workstations. According to Punishill, integrated adviser workstations will feature multiple applications that automatically pre-populate fields with client account data to boost broker utilization of the tools and allow brokers to serve clients better.
- Improved 401(k) accounts. "By the end of 2004, virtually every plan administrator will allow participants to speak with an adviser and sign up for professional asset allocation advice," asserts Punishill.
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