How to integrate your bank's profit system into the CRM.

• Author: Coffey, John J.
• Position: Customer relationship management

You would think that it would be easy to integrate data from one system into another, right? Yes and no! A problem arises from the fact that this data is used differently in each system. This problem occurs when profitability data is integrated into a CRM. Traditionally, there have been two approaches to integrate profitability into a CRM. The first and most common approach is to use modeling outside the CRM that would allow the bank to reconcile the resulting CRM-profitability to its financial statements. The modeling would typically generate a table of assumptions for groups of products. These assumptions would then be loaded into the CRM by file import or manual data entry. In addition, the CRM's products would then be mapped to these assumptions, which the CRM would use to compute profitability at the account level.

However, difficulties arise from the fact that this does not reflect the profitability of individual accounts within the CRM, nor all of the activities for those accounts! To do this in a meaningful way, you need to integrate the bank's transaction data into the profitability equation. That said, we've seen only a few CRM installations that successfully integrated transaction data from the bank's core processing system. That's because it is difficult to get usable transaction data from the core; and the resulting CRM-profitability becomes distorted when variable income and variable expenses from the transaction data are added. This requires complex reconciliation efforts to make the CRM-profitability usable. As wonderful as a CRM is, it is not a comprehensive profitability system, nor should it be forced to operate like one.

Instead of trying to incorporate transaction profit ability within the CRM itself, banks have instead utilized...