Client Portals and why Financial Firms Struggle with CRM-Creep

On rare occasions I write checks from my primary investment account.   The firm I invest with has sent me replacement checks periodically as it has merged or changed names over the years but recently, for the first time, I actually had to put in a request for new checks.  I found the experience to be a good reminder of why many financial firms struggle with providing seemingly simple online self service functionality to their clients.

As usual, my first step required a call my Financial Advisor's office.  As usual, they were quick and helpful promising to have the checks delivered through next day service as soon as they were printed.  They were Fedexed within a few days as promised but I was amused to find on opening them that they were embossed with the address of an apartment I had moved out of over 13 years ago! 

In the world of flash crashes, hurricane outages and fiscal cliffs this kind of customer service issue doesn't really rank ... but I think it is a great example of how challenging data management is for financial firms.

Every firm employs a labyrinth of different providers and systems to support their specific range of products and services.  The system through which the checks were ordered must have had it's own copy of my address which hasn't been updated since the last time I ordered checks (13 years ago).  Should this have been updated at some point?  Should the system have pulled my current address when the order was made instead?  Of course.  But small projects that affect relatively few clients often get shelved due to competing priorities.  Also, it is very possible that the address update was supposed to happen when the order was initiated but it didn't work correctly due to an upstream systems change that had an unintended consequence.

Solution or CRM-Creep

Often, firms will build the case to address these issues through a big invesment in data centralization. The logic is compelling - by getting all customer data into one place you reduce redundancy and you prevent situations like my checking scenario.  The problem, though, is that getting data into one place is not achievable as separate systems like the checking system will always be necessary.  But despite this reality, much money continues to go into trying to make it happen.  The result is what we like to call - CRM-Creep, the phenomenon of a CRM system that has been built out to do too much.

Since most customer data is already in a firm's CRM system the CRM systems becomes the natural home for centralizing the rest of the data and consolidating platforms.  Interestingly, the result is often a CRM systems that is used by everyone in the organization except the sales team as more and more functionality is built to accomodate middle office and back office users.  But more problematic is that the CRM system starts growing so many customized tenticles that it becomes very expensive to maintain and modify.

When platforms become expensive to maintain and modify they benefit from fewer and fewer enhancements over time.  So again, projects like updating the checking system get pushed to the back of the list.  And thus, the problems perpetuate themselves.

So what is the solution?

We believe that, in many ways, the best way for a firm to address these data issues is a focused investment in developing a client self-service portal.   By enabeling client's to transact, view and edit their own information online financial service firms can realize significant operational savings while enhancing their client's overall experience.  But more to the point, a self-service portal is a way for a firm to tackle these data issues without causing CRM-creep.

Of course, this kind of project is not easy as it forces a firm to tackle stale and redundant data as well as issues like:

• Data entitlement, especially problematic with joint accounts and other entity types
• Allignment with effected compliance and operational procedures
• Justifying the expense when self service may not be in high demand

Overcoming these obstacles requires a significant commitment but it is our firm belief that prioritizing self-service functionality should be a top priority of every firm regardless of size or type of client - a belief I will substantiate in our next post on Client Self Service Portals.