How to Select the Best CRM for Financial Services

CRM for Financial Advisors

Strong client relationships directly link to business growth and profitability in banks, insurance agencies, wealth management firms and financial services institutions.

Growing client relationships at scale requires Customer Relationship Management – which is both a customer strategy and supporting technology. Notwithstanding a wholesale shift in financial service strategy, I'm going to focus this post on the technology side, or more specifically share how to find the best CRM for financial services firms.

Most financial services institutions have a CRM application. But for many it's more of an electronic rolodex than an automation tool to systemically aid advisor productivity and grow customer relationships at scale.

Sometimes that's because the business model has changed since the CRM system was implemented. Leading financial services firms have shifted from a self-centric, product-focused or transaction-based business model to a client-centric model. And many times, their CRM system is unable to support that new business reality.

Fortunately, several CRM systems are expressly designed for financial services firms and customer focused business models. Because of their industry fit, they deliver the specific capabilities needed by bankers, financial service planners and wealth management advisors, and at the same time decrease the need for software customization and prolonged training.

In this post I'll share these essential requirements and the three CRM applications that deliver the highest fit and ROI.

CRM to Increase Customer Acquisitions

Below are some of the most important CRM capabilities to increase client acquisitions.

Lead Lifecycle Management
Acquiring new clients requires an inflow of leads. Most CRM systems include a marketing cloud that performs digital lead tracking, lead acquisition, lead scoring, nurture campaigns and lead transfer to financial advisors when those leads become qualified or sales-ready.

For new leads that are not yet sales-ready, the marketing cloud nurtures those leads with drip campaigns until the lead demonstrates clear buy signals. The marketing clouds may use lead distribution models such as round robin, but more often direct leads to a designated agent or advisor based on company's location, territory, specialization, financial product interest or a combination of these factors. Lead lifecycle management ensures new leads are automatically scored, distributed to the right person and acted upon timely.

Client Onboarding
New customer onboarding is a unique, and quite often time-consuming process, in the financial services sector.

Fortunately, CRM systems designed for financial services automate onboarding and KYC with pre-populated forms, guided facilitation and workflow automation to manage outside department requests and approvals. The system produces and distributes forms, tracks the approval status and next steps, and notifies advisors and others when tasks and approvals are complete. Or when the tasks get delayed, the workflow initiates escalations. And all these processes enforce compliance with regulatory requirements.

CRM customer onboarding improves staff productivity and speeds time to revenue. The best CRM software for banks and financial service firms extracts data from the onboarding and KYC processes to the CRM account profile and Account Plan so the financial advisor has a jump start in growing the customer relationship and AUM.

Guided Sales Processes
The best CRM system helps private bankers, insurance brokers, financial service advisors and wealth management professionals grow their book of business. And this is an area where the right CRM software for financial services professionals really stands out.

There are a lot of CRM software capabilities to consider, but most of them are negligible. Based on my three decades of experience in implementing CRM for financial services firms, I routinely deploy the following capabilities that collectively contribute to much higher sales win rates.

  • CRM dashboards save time and improve staff productivity. When correctly designed, they prioritize actions based on what's most important at any point in time.
  • Process Guides display visual diagrams at the top of account and sale opportunity forms. They are effective in adding context to otherwise static records. Instead of just viewing a customer account or sale opportunity record in isolation, the visualization shows the record history (what has been completed up to this point) and the record destination (what steps are next to achieve the desired outcome).
Microsoft Dynamics 365 CE
  • Content Management Systems (CMS) integrated to CRM can deliver supporting information in context. Consumer demand for more specialized products and a shift to more product agnostic fee-based models have created many more products that financial advisors are expected to discuss with clients. No advisor can be knowledgeable on everything, so having on-demand access to product literature, specification documents and fact sheets is helpful.
  • Some CRM systems have their own content management systems while others provide packaged integration to SharePoint. The best CRM software for financial services dynamically displays contextual links to relevant information based on the customer type, demonstrated interest, position in the sales cycle or other context. These systems deliver the right information to the right person at at the right time.
  • Another area of significant differentiation among CRM systems is their ability to support strategic sale methodologies. Top producers have shifted from ad hoc or informal selling to strategic selling backed with a sales methodology. Financial advisors with sales methodologies always achieve higher sales win rates than those with informal sales methods. The best CRM systems for financial services advisors are designed to integrate sales methodologies with CRM software activity and opportunity management records.
  • Sales Best Practices are born from research. They show what actions deliver results and which don't, which also makes them helpful in determining what not to do. The best CRM software for bankers, wealth managers and financial services advisors dynamically displays best practices using workflow tools or the previously mentioned Process Guides. The later approach aligns the best practices with defined sales steps or processes where they are most relevant.
  • Competitive Intelligence capabilities vary among CRM systems. Centrally managed competitive intelligence eliminates the redundancy and inconsistencies of sales staff maintaining this information on their own and provides the entire sales team with the most up to date and accurate information available.
  • Artificial Intelligence (AI) aids and accelerates sales processes and decision making. AI algorithms can suggest highly relevant and personalized Next Best Offer (NBO) recommendations, high fit financial products, or next best actions based on sales cycle dynamics. AI is the CRM tool to shifts data from historical to predictive and from hindsight to foresight.

CRM sale opportunity records tend to be much more streamlined than in other industries. Keeping the opportunity form simple keeps it current. Or put another way, there is an inverse relationship between complex forms and updated forms. When forms are too cumbersome or complex, financial advisors often ignore them.

CRM to Increase Customer Share

CRM designed for financial services companies includes several powerful capabilities to grow customer share and lifetime value, including the following.

FORM for Account Data Management
FORM is an acronym for Family, Occupation, Recreation and Monetary. These four categories contribute to an account data segmentation method that captures customer data and converts it into relevant financial product recommendations that grow client revenues and AUM.

Customer Intelligence for Customer Growth
For financial advisors, the quality of their client growth strategy is equal to the quality of their client intelligence. Accurate and complete client intelligence correlates to improved lead conversions, shorter sales cycles, higher sales win rates, increased customer lifetime value, higher customer share and improved customer retention.

For most financial services firms, customer intelligence will include a 360-degree customer view, customer segmentation, customer insights and household data. For some of the more advanced sales organizations it will also include personas, journey mapping and an ideal client profile.

Financial Services Customer Intelligence

Client households are logically connected in the CRM system so that financial advisors can aggregate or roll up select data such as savings, checking, brokerage, loans, credit cards or AUM. This gives the financial advisor a broader perspective to understand client financial goals and recommend financial products that benefit the client and his or her extended household.

Strategic Account Management
This is an area where many CRM systems struggle. Financial services Strategic Account Management is a systemic approach to identify up-sell and cross-sale opportunities for key clients. This client account growth method creates forecasted account plans that identify and map future period sale opportunities. The CRM application manages the data to feed the strategic account plan, make highly relevant and personalized recommendations for up-sell, cross-sale and bundles, and systemically increase customer relationships and customer share.

Concierge Programs
Financial services concierge programs are personal, high touch services offered by private banks and wealth management advisors to assist affluent customers, their families or businesses. Although they fall outside the traditional banking relationship, they are exclusive services directed to HNWI and UHNWI to create differentiation and deeper customer relationships. They are less about managing client wealth and more about aiding client lifestyle and quality of life. Sales research our own experience show that they can be very effective at increasing AUM.

CRM to Increase Customer Retention

According to a PricewaterhouseCoopers report, titled Unprecedented Opportunities, Plan Your Approach: Global Private Banking/Wealth Management, Customer service, not investment performance, is the top reason cited by clients for switching financial services and wealth management firms.

Two effective programs we routinely implement at financial services companies such as retail, commercial, private and investment banks, hedge funds and insurance agencies to improve customer retention are shown below.

Customer Self-service
Clients have lots of questions, especially during periods of market volatility. CRM customer self-service portals can answer these and other questions on-demand, 24 by 7, and without incurring customer service labor cost.

Financial services CRM offers self-service knowledgebases, chatbots, virtual agents and other tools that when properly implemented can handle up to 80 percent of routine customer service questions or problems.

Customer Churn Prediction
The ability to improve customer retention delivers significant and sustained revenue growth. So, to aid that goal some CRM systems can automatically calculate customer health scores and use AI algorithms to identify customers most at risk of churn.

Even better, knowing why customers leave permits companies to fix causes of churn and prevent customer churn before it happens.

Customer Churn Prevention

The Top 3 CRM Systems for Financial Services Institutions

Knowing how to select the best CRM software for financial services advisors is important. But the most common question I'm asked is, "What is best CRM software for financial services?" The short answer, based on market share and experience from having implemented CRM systems at financial services firms for more than three decades, is a short list that includes Salesforce Financial Services Cloud, Microsoft Financial Services Cloud with its Dynamics 365 and Pega. The longer answer and a deeper analysis is available at the top 3 financial services CRM systems.

If you are evaluating financial services CRM software, consider our software selection framework to identify the best system for your company.