Financial Services CRM Design Advice

CRM software for financial services is like CRM in no other industry.

Financial services CRM is all about KYC, onboarding, householding, AML, FATCA and other processes that have no similar comparisons in other industries. I'm going to use this blog post to show how managing and automating these industry processes within CRM software satisfies users, increases productivity, contributes to a 360 degree customer view and lowers overall IT cost.

KYC and Onboarding

KYC is predominantly a risk mitigation technique to prevent financial services institutions (FSI) from being used, intentionally or unintentionally, for illicit or illegal activities.

Know Your Customer processes are designed to verify client identity, adhere to banking regulations and comply with a plethora of compliance measures such as anti-bribery, identity theft, money laundering and terrorist financing. The most common KYC processes focus on client onboarding (i.e., client identity), new policy onboarding and monitoring of client financial transactions.

From an operational perspective, using onboarding process guides, sometimes called Flows, in the CRM software increases ease of use, ensures proper sequence and compliance steps, and provides a visual queue of where a client process stands at any point in time.

The application can then be used for client or KYC alerts, notifications and reporting, such as the Incomplete KYC report I create for pretty much every FSI client. Below are two sample illustrations of onboarding process guides that are part of a client contact record in the system. The first is a 5 stage KYC new customer onboarding and the second is a 4 step new Life Insurance policy.

Financial Services KYC in CRM
Financial Services CRM Onboarding

Fortunately, when KYC processes are part of a financial services CRM system, companies can achieve a two-fold objective of risk mitigation while at the same time repurposing the data for client account management purposes. More on this opportunity later in this post.


Few FSIs fully recognize the household relationships among their customers – which results in a significant lost opportunity for up-sell, cross-sell and growing client relationships. The CRM householding process I typically implement with clients can start simple.

For example, use a query to show all customers that have the same home telephone number or the same home address, and then apply a workflow or business rule to link those accounts using a Relationship field.

When an Advisor recognizes that a credit card holder is the 16 year old daughter of portfolio customer who is her father, he can use that information grow both accounts. For example, he may suggest auto insurance policies, college financing options or getting the daughter started in an early savings plan or even a portfolio plan that matches some of the father's investment guidelines or plan elements.

Regulatory Compliance

FSI industry compliance is a lot like safety in the airline industry. Its non-conditional and even small deviations can produce devastating effects.

Fortunately, compliance mandates can be facilitated with CRM applications. In fact when client compliance requirements are embedded within the client management system the processes can be automated using the data captured in the KYC and onboarding processes.

This greatly accelerates cycle times, decreases manual activities and reduces the number of applications that then have to be integrated and managed.

Below is a screenshot showing how CRM can achieve FATCA and AML compliance automation as part of the contact record.

Financial Services CRM Compliance

By including compliance as integrated steps in the CRM system, as opposed to using separate applications, users get a real-time view of the complete customer relationship. This also provides a single location to apply workflow automation and get client reporting.

Client Account Management

It's important to remember that while compliance is mandatory, the company's purpose is to acquire and grow customer relationships. Fortunately, when designed in a holistic way, compliance measures can actually feed business development processes.

Client account management techniques are many and varied. However, an approach somewhat popular in North America and the Caribbean is the FORM technique. FORM stands for Family, Occupation, Recreation and Monetary and seeks to capture data in these categories in order to understand what's important to each client and leverage this information for relationship building.

Also recognize that FORM can be integrated with social channels as part of a customer engagement or financial services social media strategy.

Below are some partial sample FORM categories and fields I've appended to financial services CRM software contact records (also note the Household relationship field link).

Financial Services Process Guide

A Holistic Solution

FSIs often struggle with a slew of legacy systems, disparate data siloes, system integration headaches, complex reporting and manual efforts that frustrate users and increase business process cycles.

Fortunately, it doesn't need to be this way. Some forward thinking design of an enterprise-wide customer relationship management system that includes the many compliance requirements along with business development objectives will result in fewer systems, more automation and greatly improved user satisfaction.