Lecture 9(i): CRM Investment Banking

Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B,JU

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The CRM Banking:

Challenge

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Investment

CRM techniques will only help investment banks if improve the banks ability to:
1. select and then manage the right client 2. determine which products and services should be sold to which

client 3. reduce the cost coverage

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

The CRM Challenge in Investment Banking (Contd.):

Investment banking is characterized by two very different types of relationships with clients, as follows:
1. Share of mind relationships focus the bank on doing a few

large high-impact transactions for the client.

2. Share of wallet relationships involve very large-scale

coordination of many people, each of whom is operating separately from the others.

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

The CRM Challenge in Investment Banking (Contd.):

Two of the main determinants of business success in investment banking are1. Client Satisfaction 2. Product Quality

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

What Clients want from their Banks:

1. cost reductions and efficiencies in services delivered; 2. better control and transparency 3. greater convenience in having to deal with banks; 4. banks knowing the needs of clients intimately;

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

Core Providers(Contd.):
Clients seek greater efficiencies from bank they regard as their core providers of services. They want to see new levels of bank commitment associated with privileged core relationship position. Clients require a tight linkage between all the following variables: 1. Long term commitment; 2. product; 3. Ability to provide total coverage and delivery;

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

Core Providers(Contd.):
Most clients classify banks on the basis of ability to deliver on certain criteria, in particular1. long-term ability to deliver results 2. impact on the clients performance

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

Non-Core Providers:
Clients expect from their non-core providers: 1. Focus and excellence in a products and services 2. Superior execution, pricing and value

Non-Core provider need to achieve the following lower cost of coverage than their competition; very competitive pricing; high share of wallet; opportunities cross-selling from areas of product strength;
Mahfuza Khatun Lecturer, F & B,JU

Finance & Banking Jahangirnagar University

The Technology Trap:

IT systems must support a client-centric approach to information. To do this, they need to: connect existing CRM systems and legacy system efficiently so that all information around the client can be shared securely between client service team members; allow client service team members to engage in CRM; be very cost effective;

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

The Technology Trap (Contd.):

Putting the technology at the heart of CRM strategy is problematic for a number of reasons, listed below: 1. The package is not bespoke. 2. There has been a pressure in the implementation of CRM systems. 3. Many packaged systems have no direct link to driving client satisfaction, share of mind or any other strategic sales variables. 4. Many CRM solution require a complete implementation for the system to be effective.

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU

Thank You

Finance & Banking Jahangirnagar University

Mahfuza Khatun Lecturer, F & B,JU