Access all areas

FST talks to Andie Rees, Senior Vice President at Onyx Software, about practical ways to tackle customer management challenges in the financial services sector, drawing on the exclusive independent research and experiences of some of the company’s major users.

FST. What do you see as the key business challenges facing the financial services sector today?
AR. Our clients come to us with a broad range of customer management challenges, from the difficulty of launching new products quickly to managing leads, taking new customers live and handling their service enquiries. The financial services sector is an extremely competitive environment, complicated by increasing regulation and public scrutiny, and companies need easy access to information, streamlined business processes and flexibility. That sounds simple enough in theory – in practice, of course, it’s hard to deliver the necessary infrastructure.

Webster Buchanan Research recently published an independent report in association with Onyx, based on in-depth interviews with senior managers in several financial services sectors. It points to a range of challenges facing organisations in banking and insurance. For example:

• Cross-selling is hampered by poor access to customer information, which tends to be spread across multiple systems, departments and business partners.
• Companies are constantly refining their approach to market as they analyse what works and what doesn’t. But it’s hard to apply the lessons they learn if they can’t change their internal processes quickly enough.
• Many financial services companies handle the initial customer contact very efficiently, particularly in call centres where working practices are well established. But this first contact is often undermined by the internal processes that take sales and service enquiries through to resolution. For example, effective lead management often requires more complex process control than traditional workflows can provide.
• Some recent technology developments, such as customer and partner self-service, have failed to deliver their expected results, particularly for more complex products. This is partly a cultural issue – managing the shift to new ways of doing business has not proved easy.

Webster Buchanan Research argues that these issues are the result of three inter-related problems. Firstly, many financial services organisations struggle to deal with their reliance on legacy IT systems. Secondly, financial institutions still tend to be structured around products rather than customers, and information is not easily shared between different business units. Thirdly, the business processes they rely on are inelegant, hard to change and are often designed for short-term need.

FST. Are these kinds of challenges leading to a resurgence of interest in CRM software?
AR. We’re definitely seeing evidence of that. Since the latter part of 2004, companies have been shifting their emphasis from cost-cutting to growing revenue and market share, both from new and current customers. To do so, they need to be able to share their customer data across multiple business units, enabling them to deliver a wide range of services to customers and enhancing their ability to cross-sell and upsell.

For example, one of our users, a major international insurance company, has deployed Onyx to help it market multiple products to target customers. Previously, it had numerous lines of insurance products with no common customer database – as a result, it found itself approaching the same accounts multiple times with minimal coordination between different departments, which was inefficient and created problems with both customers and brokers. By implementing Onyx, it has been able to increase revenues and drive down costs.

Another major insurance customer reported a 20 percent increase in productivity in its contact centre after implementing Onyx. The system enabled the company to better communicate to its customers, enhancing its ability to sell additional products and services at lower cost.

A second driver to CRM adoption in financial services is the need to enforce consistency across the organisation, regardless of who the customer is talking to or how they choose to make contact. That requires a combination of comprehensive customer information and built-in process management.

Finally, you can’t manage what you can’t measure. Our customers are investing in reporting and analytics so they can analyse who their clients are and what’s happening in their markets.

FST. Where do companies typically start with their CRM projects, and what are they looking for in the software?
AR. Where they start depends on their immediate pain points. Improving customer management is an iterative process, and we encourage customers to focus first on the areas that will generate the greatest return.

Wherever they start, however, we believe several fundamental factors underpin effective customer management, beginning with the requirement for adaptability. In a dynamic business environment, companies must be able to react to changing market conditions – whether it’s a new competitive threat or macro-economic developments – and meet changing customer needs. This has a number of implications for the CRM systems they use.

Most traditional CRM systems are inherently inflexible. Changing them to suit each organisation’s unique circumstances requires heavy customisation, which prolongs implementation timescales and means that, in many cases, the market conditions they were built to address have changed by the time they go live. Making changes once the system has been implemented is also a slow and resource-hungry process – and heavy customisation increases complexity further down the line when it’s time to upgrade.

By contrast, an adaptable CRM system is one that can be quickly changed to meet an organisation’s needs. Instead of being an impediment to change, it should be the platform for continuous improvement, one that allows organisations to keep on adapting their customer processes. Onyx’s visual business process management software allows customers to create and modify business processes without writing any code – so it’s quick and easy. We’re also going to launch a new version of Onyx Customer Management later this year that will make it much easier for customers to carry their customisations forward when they upgrade.

Secondly, CRM systems need to be able to work with a company’s existing IT infrastructure, using open standards to integrate with the huge legacy investment that tends to characterise IT set-ups in financial services organisations. We often find a dozen or more systems in our client’s back offices that have to be integrated with Onyx, some of them going back 10 years or more, and many of them are mission-critical.

Thirdly, the system must be able to meet both customer and employee needs. From a customer perspective, that means working in whatever business environment they choose, whether it’s face-to-face, or by telephone, fax, e-mail or over the web. For internal users, the system must provide the information employees want in the format they choose, so they need a personalised interface.

According to Ress, a CRM system should provide:

Comprehensive customer data– Financial services companies need to collect a wide range of customer data, from demographics to anticipated lifestyle changes (college age children, changing insurance requirements and so forth). By capturing information through every channel they operate in, organisations begin to develop a customer profile that supports multiple business units and products. This information helps companies identify cross-selling opportunities and target their marketing and retention campaigns more effectively.
Real-time access to information – Data has limited value unless it can be leveraged throughout the organisation. Sales and marketing staff need to be able to search and filter data to identify prospects for specific promotions or offerings, while customer service employees need to have access to all relevant customer data to resolve issues.

Analytical insight – At a strategic level, companies need to be able to perform comprehensive data analysis to identify customer needs, enabling them to develop relevant products and services strategies. Operationally, they also need access to information for effective performance management, both at an individual level (for example, to measure the performance of sales staff or call centre agents) and at a departmental and divisional level.
Responsive infrastructure – Speed of sales response, marketing efficiency and quality of customer service all have a profound impact on customer acquisition, retention and upselling. Organisations need an adaptable infrastructure that allows them to respond quickly – whether it’s to sell new products or to take a service call through to resolution as rapidly as possible. One of our banking customers used Onyx to cut the time required to issue a new credit card by more than 99 percent, from two to three weeks to 20-30 minutes.
Integrated data – The customer management system must easily and seamlessly share data, bi-directionally, with all of the relevant back-office legacy systems.

Rees on Onyx
We have more than 10 years’ experience providing CRM software to mid-size and large enterprises, and have a heavy concentration in services industries such as financial and business services. We’ve been successful in settings where our customers view the ability to enhance their customer interactions and relationships as core to building profitable revenue growth. Our customers include major players in the insurance, private and retail banking and healthcare insurance sectors.

For further reports on Customer Management and Performance Management, please contact Onyx at pennyi@ukonyx.co.uk