Do community banks even need CRM?

• Author: Motley, L. Biff
• Position: Customer Satisfaction - Brief Article

In a recent speech before a group of bankers in Minneapolis, Mark A. Nishan, deputy comptroller of the U.S. Office of the Comptroller of the Currency (0CC), made the point that community banks, which compete on the basis of excellent customer service, are anything but dinosaurs.

While large banks have more capital and financial resources than smaller banks, big financial institutions have grown too far removed from their "food supply"- their customers. Community bankers see their customers every day.

One of the "buzz words" in banking today is CRM (customer relationship management). This usually refers to expensive software and application integration projects intended to make big banks look and act more like small banks, I am inspired to compile the following "Five Reasons Why Small Banks Don't Have to Wony About CRM."

We already know our customers. CRM systems are installed to help the giants know their customers across the "enterprise" (read "silos"). Large banks are often bureaucracies of narrowly focused specialists who can't or won't connect the dots when it comes to serving customers. This poor service is not the fault of usually well-meaning employees, but the unintended consequence of the missteps of far-removed managers. Community bankers, on the other hand, see their customers every day, listen to their problems and connect the dots in real time.

We don't need market segmentation. CRM systems are big on segmenting customers into groups and then parsing out service and attention according to who you are, This is a good idea, of course. The reality is, community bankers do this on a one-to-one basis, instantaneously. While big banks are spending more and more money trying to engineer a data mining system to help serve that illusive "market of one," community banks do it spontaneously and quite well.

We already know the problem. One of the great promises of CRM systems is that they quickly surface customer problems so that they can be solved somewhere and the customer relationship saved. Satisfaction surveys identify "quick problem resolution" as one of the holy grails in our business. The fact is...