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Financial services operations need CRM

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Kathy Gibson reports from Reimagine 2015 – Customer relationship management (CRM) is the glue that holds various systems together in the financial services space, allowing organisations to build customer-centric businesses.

South Africa banks – long under fire for holding several instances of the same customer in different silos – have all declared a strategy to shift to a customer focus, says Carel du Toit, MD of Mint Management Technologies.

This is what Microsoft calls the 360-degree view of the customer, adds Wayne Morris, corporate vice-president: Dynamics marketing at Microsoft, and it’s about putting the customer at the centre of the process.

But, to become customer-centric, banks need to understand what it is that their customers actually want, adds Adnan Theba, Microsoft SA’s Dynamics CRM lead.

“We talk about time being the most valuable commodity; and it is just as important to the bank’s customer as it is to their employees, and banks are looking to tools to heighten their productivity.”

Prompting the new customer-centric focus, he says, is the fact that banking is fast becoming a commodity item. “Where people traditionally wouldn’t change their bank, now they do. Today, people asses their banks and move as easily as they change their cell phone contracts. And we’ll see this trend accelerate as more banks build new products and demonstrate better care for their customers and adding value to their core offering.”

Currently, banks are attracting new customers – or retaining existing customers – through value-adds like loyalty programmes, Theba adds, but customers are starting to see beyond the frills and are demanding better banking services.

“Banks need to look at their core offerings and consider how they can modernise banking by being faster to market with more innovation and offering a better customer experience.”
Du Toit explains that the Microsoft Dynamics solutions are built around services, making it easier to respond quickly to new innovations from banking customers. “We can now roll out a new service in three months instead of the 12 to 18 months that it would have taken in the past,” he says.

And this addresses the need that banks have to get new products or services to market quickly, Morris adds. “Some of these services are similar to those being launched by retailers. For instance, the omni-channel is a challenge for both segments, but it has to happen going forward to underpin the core services.”

There are more challenges in the financial services segment, though, because it is strictly regulated and monitored. However, South African banks have traditionally been able to innovate while remaining compliant, Theba says.
“The South African banking industry is among the most regulated in the world. But it is still the one that has showcased South Africa to the world with its maturity and the speed at which is innovates.”
To stay flexible in a regulated environment, it’s important to have systems that can manage the compliance issues without restricting users, he adds.

“Regulation and compliance can be extreme challenge for an organisation. A lot of the times when things go wrong in an organisation it’s because people don’t understand what they need to do next; there is no guidance on the system.

“This is one of the core principles we bring to the financial sector: people have grown up with Microsoft, they understand the menus and the flow, and how the screen will look. And we can take the logic we want people to follow and expose it to them so it’s easy to do the right thing and difficult to stray from what the bank needs them to do.”

This has a great spin-off advantage in that it makes training and change management lot easier, Theba says. “People really have grown up using Outlook, and the Outlook team is now co-developing with the CRM team. This means banks are able to bring their core offerings to market a lot faster since the user interface is so familiar.”

Banks are under a huge amount of pressure to retain customers, grow their markets, and fend off challenges from competitors outside the traditional banking sector. But technology means that the banks are in a good position to start offering products and services outside of the financial field.

“We talk about other industries encroaching on the banking space, but the banks are also encroaching on the telcos and retailers,” Du Toit points out.

“It’s becoming about who knows their customer the best; and that’s why CRM is more important than ever.”

Marc Gower, head of Microsoft Business in South Africa, says banks have to innovate to be competitive, and this has led to them adopting a best-of-breed systems approach.

“This presents enormous challenges in the back end and can create some massive complications, especially since there’s a need to have a common source of customer information,” he says.

“Not least of the challenges is the fact that each system will typically have a different look and feel.”

With Dynamics CRM, users can access all their systems from one user interface that is familiar to them and easy to use. “No-one goes on Bing training, or Google training or Outlook training,” Gower says. “They don’t have to because these systems are pervasive and easy to use.

“Companies see the value in deploying a system that people can actually work with; that guides them; and works the way they think.

“The very fabric of the bank has become the CRM layer – it’s the piece the employees are engaging through to all the different systems.”

This integration is vital in terms of the many and disparate systems in use at most retail banks – and it needs to extend into the contact centre as well.

“All the systems – whether Skype for Business or traditional implementations from Cisco, Avaya and others – are all up and running in the big bank’s call systems,” says Du Toit. “We need to understanding the roadmap of all the different systems and make sure they all work.”

Theba points out that it’s easy to talk about integration, to promise it – and even to deliver it; but customers need to ask the relevant questions about how long it will take and what the cost will be.

“With a Microsoft solution you know there are skills in the market, and a wealth of people who have been working on Microsoft products for years.

“There is too much at stake for us to be asking if we should be having a discussion about integration. The real discussion needs to be around costs, time and how to make it happen.”

As cloud becomes more pervasive, banks are having to think carefully about what they do with their data, and Theba says the launch of Azure into the local market last year has sparked new discussions in this area.

Many of the concerns that companies – and particularly financial institutions – have around the cloud have been addressed by Microsoft, he says.

“We have focused on standards, and transparency around where the data is held,” Theba says. “Microsoft has walked some really hard yards in taking our technology through ISO and other certifications. In fact, we recently did an ISOC certification for Office 365, Dynamics CRM and Azure, which was a world first in terms.

“We ensure that we have got really strong governance policies; and believe we are really breaking new ground in this area and gaining the trust of our customers in our technology.”
Gower adds: “There is a misconception or grey area where customers don’t think they can put their data into the cloud because it’s not in the country. This creates a perception that it’s just not possible.

“Our legal team has made a large investment in this area to gain a complete and thorough understanding of all the statutory requirements and engaged with the different agencies to ensure we have an easy compliance path for our customers.

“So Microsoft has already paved the way for its customers; and we find that many organisations with the most confidential data in the country as actually using Azure extensively.

“There is absolutely no statutory reason to prevent companies from using Azure to the nth degree. Yes, there are a few regulatory hoops, but we have smoothed the path and have the skills to guide our customers through the
process.”

But, while IT organisations are concerned about moving to the cloud, Du Toit points out that many companies – even banks – are already using cloud services that they might not even know about. “It definitely happens in every company,” he says.

“What is critical is that this shadow IT is regulated and formalised. Companies think their firewall protects them from unregulated cloud usage, but it often doesn’t.

“It’s far better to realise what’s happening and take steps to ensure it’s regularised.”