Community banks and credit unions need to reevaluate their CRM strategy according to new research.
The business consultancy Callahan & Associates of Washington, D.C., has found that 60% of credit unions do not currently have a CRM system in place at a time they are facing more competition for their customers from other financial services firms.
The good news is that nearly half the 223 credit unions surveyed by Callahan said they were currently budgeting for a CRM platform. Nearly one-third said they expected to have one in place in the course of 2019 and 18% said they would have a CRM within six months.
The sector has not been averse to investing in customer-facing technology, but it seems to have slipped behind other financial services sub-sectors regarding CRM. This could create problems for credit unions, as they must both fight to keep their existing customers and reach out to find new ones.
There is also a growing awareness within the industry that credit unions need to make more and better use of the client data they already have.
Smaller and less complex institutions are also less likely to have CRM plans in place than their larger colleagues that have become alert to the need for modernization. According to Callahan & Associates, 67% of credit unions with more than $10 billion in assets are looking at CRM implementation this year, compared with only 11% of those with less than $100 million.
For those credit unions that have already implemented a CRM – 40% of those polled – the usual CRM advantages are being delivered, including streamlining member-facing processes and enhancing the user experience.
The vast bulk of credit unions that intend to acquire a CRM system say that are not planning to make any additional hires to implement or manage the technology. Rather, they will train existing personnel. Only 10% envisage making further hires to support new CRM initiatives.
When evaluating new CRM technology, Callahan said that credit unions will focus on their reporting capabilities, ease of use for existing staff and their ability to integrate with third party payment systems. Ease of use is considered to be the key requirement for the smaller players in the credit union marketplace.
The research also found that more than half the credit unions that had budgeted for a CRM were open to all types of CRM solutions. However, they have a clear preference for turnkey solutions.
Key Takeaways:
- A research report from Callahan Associates has revealed that over 60% of US credit unions do not currently have a CRM system.
- Nearly half of the 223 institutions polled by Callahan did say they plan to acquire and implement a CRM system within the next 12 months.
- The larger end of the market – with assets north of $1 billion – are where most of the activity exists. Smaller institutions are less inclined to provide the additional resource for a CRM.
- Credit unions are fairly agnostic when it comes to a choice of system, but over one-third would like to see a turnkey solution, ideally one that can also integrate with third party payment systems.