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Top 9 Benefits of CRM in Banking

Today, no discussion about banking technology is complete without the mention of the benefits of banking CRM. That’s not surprising, considering how positively the software can impact a bank. CRMs can increase productivity, drive revenue, improve customer satisfaction, and do a lot more, as we will discuss in this article.

Customer Relationship Management (CRM) has proved to be a powerful software solution that lets banks serve customers profitably and stay ahead. To understand what are the benefits of CRM for business banking, it’s important to quickly recap the challenges banks face today.

Intense competition, stringent compliance requirements and heightened expectations from customers have changed the banking sector over the past decade. All this has squeezed profit margins even as the demand for product innovation keeps rising.

As a result, banks are taking a fresh, 360-degree view of their business and reviewing everything from internal processes to customer-facing activities. And digital transformation is playing a key role there. Which is where CRM comes in.

Benefits of CRM in banking

Here are the 9 of the top benefits of CRM in banks:

1. Improves your understanding about the customer

Today, the success of your sales teams depends largely upon how well you know the target customer and how organized that information is. While legacy systems did have some capacity to hold data, they were too siloed and superficial to meet the needs of today.

A CRM system for banks organizes the information on all your customers and prospects. Because all of it is available in one single place, your teams get the larger picture about the customer. This fine-tunes their understanding about the customer and helps them pitch right. 

2. Makes marketing customer-centric

To fully appreciate the answer to the question what are the benefits of CRM for banking services, one needs to take into account the fact that customers have a rather long relationship with their banks. From college-loans in youth to pension funds in the sunset years, your customers need some sort of financial products all through their adult lives. And as a banker, your success is pretty much defined by how accurately you align your products with what your customers need. 

A CRM software for banks not only makes this alignment efficient but can scale it easily. This smart repository of insights can estimate with high accuracy what product a customer will find most helpful at each stage of their life. The CRM turns your marketing efforts customer-centric, hugely increasing the odds of conversion, cross-selling and retention.


3. Handles segmentation 

The importance of CRM in banking lies in the way it prevents wastage of precious marketing resources. It helps create segments, where customers within the same segment have similar profiles and requirements. So while earlier you were trying to sell the same financial solution to everyone, now you can offer solutions unique to each segment.

Segmentation brings efficiency and discipline to marketing, which could otherwise be just spray and pray. You can craft targeted campaigns, solve segment-specific problems and cross-sell better. 


4. Improves collection efficiency

Disbursements is only half of the credit story; the other half is collections and recovery. Without timely collections, your profits can quickly erode, bad debts can tarnish your balance sheet and you begin losing your stakeholders’ confidence.

One of the biggest benefits of banking CRM software is how it can considerably improve collections. For example, it can create and automate due-date reminders. By helping coordinate better with customers before the due-date, you can improve timely collections. The CRM can also allocate agents based on criteria like locations and experience, thereby optimising the collections process.


5. Increases lead conversion rate 

Set2.2You’ve to accept that lead generation is getting expensive. Hence, every lead that you can’t convert is a waste of money your bank invested earlier in the lead acquisition process.

A data-fueled approach to converting the leads you’ve won is the best way forward. One of the benefits of CRM for business banking is that you can collate the information you have on the customer and figure out latent demands. 

Let’s say you have a customer who exports chemicals and requires export credit. But their latent demand could be financing their capex. Your CRM could help you connect the dots, provide you timely nudges and help you serve the customer comprehensively. 


6. Speeds up customer onboarding

One of the benefits of CRM in banks is the way it dramatically slashes your turnaround time (TAT). If you can streamline and automate processes, you are not just saving a lot of time, but you’re also keeping your business from losing customers. 

By placing simple, rule-based validation checks on application forms, you save precious time and ensure your bank receives only good-fit customers. Whether it’s a relatively simple task of vetting an application for a new checking account or a major proposal for advances that requires a quick credit verification, you’ll find your CRM is an extremely efficient platform.  

7. Improves customer experience 

Set2.3One of the modern-day benefits of banking CRM software is the extent to which it contributes to improving the customer experience. That’s because customer experience is one thing no business can afford to ignore today. 

Whether it’s a handoff from sales to service or whether it’s a prospect talking to your teams for the second time, a unified, cohesive experience is critical. All departments in your organization have access to the same, unified customer information, thanks to your CRM. As a result, your customers will continue having a great experience, no matter what team they’re talking to.


8. Boosts customer retention

Forbes cites a study which says it costs five times as much to win a new customer as it does to retain existing ones. Trying to retain existing customers, therefore, is a very smart thing to do.

The intelligent dashboard of your banking CRM solution has the entire history of all the customer communications and transactions. It will show you the customer’s financial habits, previous purchases and investments, and any problems that the customer has faced in the past. 

Because you know their history and the challenges they’ve had before, you are in a stronger position to anticipate products that better meet their needs and preempt any challenges they might face. 


9. Strengthens compliance

If there’s one novel challenge banks have seen emerging in the past few years, it is that of data privacy. The European General Data Protection Regulation (GDPR) and the state statute California Consumer Privacy Act (CCPA) have changed a lot of things, including better protection to consumers and stringent fines to erring organizations.

If anyone is not fully convinced as to how can banks benefit from a CRM software, compliance is a great feature to study. The software facilitates obtaining and registering the assent of your customers. This includes the permission to store their data and contact them over email,  and letting them manage their preferences. By automating all this, the CRM saves your team a huge amount of time. 

More importantly, the software offers complete reliability in such tasks. Human teams, no matter how diligent and experienced, are still liable to making mistakes – something that can cost your organization dearly.

Concluding remarks

Some banks don’t understand that a great CRM software is a comprehensive system. Too often, they mistake database solutions or basic digital sales assistants as full-fledged CRMs and overlook the true importance of CRM in banking sector. 

In order to derive full benefits of a bank CRM, it is necessary for your bank to opt for a technology platform that can exploit everything mentioned above and go beyond. 

For instance, a CRM should be able to leverage artificial intelligence (AI) in order to learn from the insights it collects. That way, it will become smarter at every stage and improve outcomes exponentially.

Our banking CRM runs on the principles of capture, learn and coach. It captures customer interactions, detects and learns from the best actions and behaviors, and provides contextual guidance to continuously improve all your customer-facing outcomes. 

We’d love to help you explore how a powerful CRM solution can hugely improve the performance of your organization. Let’s talk!



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