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5 digital transformation challenges facing the financial services today

In our recently published whitepaper, CRM: an untapped potential for Financial Services, we looked at the many ways a CRM solution can help digitally transform the Financial Services sector. From lack of integration to shifting customer expectations, the industry faces many obstacles on its road to digital transformation. In this article, we break down the top 5.

Many organisations are still internally working with Excel sheets, continuing on with manual, time consuming processes. Many of these functions are related to the sheer volume of compiling information and delivering reports to maintain compliance in a highly regulated environment.

Even KYC’s — “Know Your Clients” — are geared more towards maintaining records and compiling regulatory information (passport numbers, source of wealth, risk appetites, etc.), than identifying specific business or sales opportunities.

What role could a “customer relationship management” tool possibly play in a compliance setting? The key is in the flexibility built into solutions like a Salesforce CRM, allowing you to reimagine part of your customer relationship management tool as a “compliance regulatory machine.”

2. Integrating multiple teams

Which brings us to the next major challenge that Financial Services companies are facing.

Without CRM tools, compliance, sales, and marketing all sit in separate silos. Historically, this has been acceptable, if a tad inefficient, because marketing didn’t play as big a role in the “attract new leads” effort.

However, you have multiple changes affecting the wealth management and financial services landscape right now, such as:

  • A more diverse set of “startup” financial services firms (fintechs, challengers etc) breaking the general monopoly.
  • Clients that are far more technologically savvy and aware investors than ever before.
  • An expectation of digitally accessible and personalised service trickling in from the services and retail sectors.
  • In other words, clients expect to be marketed to, but in the way they want, with relevant information and with options.
  • This means that sales, marketing, and compliance teams need to find a way not only to work together but to actually share data around the same client.
  • Customer experience and engagement on the front-end depends on the smooth, seamless integration of these mutually connected teams on the back-end.


3. Relationships are transforming

Speaking of customer expectations, an increasing number of financial services firms are emerging into the market. Clients have many more options — so the resulting competition means it’s more important than ever to maintain a competitive edge.

While some financial institutions are simply losing clients to competition, others are having trouble attracting new clients, to begin with. In other words, clients are looking to create relationships with companies that actually know who they are and what they want — often before they do.

Another transformation is taking place at the client-advisor level. Most interactions between a client and the financial institution are already done remotely.

Clients can perform a great number of transactions online or access key documentation digitally. This level of digitalisation streamlines part of the client experience — but it also puts pressure on the relationship between clients and advisors.

There is more potential than ever before to market personalised solutions and reach customers with aligned products in a more intimate format — but the only way to do so is to adapt data management, marketing, and
sales processes in a way that is more responsive, transparent, and in real-time.

Choosing the right technology is the absolute key to maintaining competitive advantage. You’ve probably heard positive statistics about CRM implementation in general:

  • Capterra reports that the use of CRM can boost customer satisfaction and retention by 47%.
  • Customers spend 20% to 40% more if they’re engaged by a company that uses the data and insights their CRM provides.
  • In 2020, 86% of customers are willing to pay up to 25% more for a better, more personalised customer experience.

But there’s another side to the story. 

And that’s the consequence of what happens when you implement the wrong technology or software.

Choosing between solutions may not be obvious, but financial services companies that fail to do their research fall into a couple of different traps:

  • They use it for their back-end processes, but the CRM is not hooked up to the customers’ systems.
  • They choose CRMs that don’t have the right third-party integrations, or they use CRMs without a cloud option.
  • They miss out on the mobile experience of CRM (which is unfortunate because users of mobile applications for financial services result in an 87% improvement in sales and an 83% improvement in business process efficiency.
  • Instead of planning for implementation, they deploy a chosen CRM as a totally separate system — doubling the amount of work and inefficiencies.

Yes, a CRM system is the linchpin for learning more about your customer and business, supporting sales, and enhancing marketing activities. But it’s not just about purchasing a CRM.

Financial service companies can only hope for a competitive advantage if they make the most of the CRM’s functionality through customisation, integration, and user adoption.

5. Data quality over quantity

There is such a thing as too much data.

It’s when you can’t sort through the numbers to get a clear, real-time, and even predictive look at customer needs, trends, and areas for potential sales.

Data quality matters much more than quantity these days.

One of the great “side-effects” of implementing a CRM for a financial service company is the overhaul that internal data gets. The organisation will need to clean and transform existing data that reside in numerous different systems, to truly take advantage of the CRM. This is such a daunting task that many CRM implementation initiatives have failed or have never kicked off because of that.

Today however, there are mature solutions out there that can automate a big part of this process to allow financial services companies achieve a unified view of their customer and harness features like targeted mailings and personalised communications, which boosts both sales and marketing efforts.

Other useful links:

Salesforce Financial Services Cloud 

Salesforce Services

Case Study: Wealth Management Firm

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