Banks wrestle with customer queries, regulations

Bank of Montreal has completed a customer relationship management implementation allowing it to better serve its customers through improved interoperability between multiple channels like branch, telephone or Internet banking.


BMO finished the rollout of Siebel CRM across its 16,000 branch, in-store, contact centre, specialty unit and branch office locations before Christmas, it has already seen its referral business increase, said Normand Zucco, vice-president of integrated distribution and operations at BMO.

“CRM is a huge opportunity for us if we can leverage it,” Zucco said. Zucco was one of several panelists who discussed serving and developing multi-channel customers and processes at The National Club in Toronto Thursday. “It allows the bank and systems to be the integrator and not the customer.”

For example, if a customer walked into one branch with a complaint and a week later went to a different branch or went to the same branch but dealt with a different teller, the customer would have to re-explain his or her problem. Whereas referrals, service requests and customer problems used to be faxed from one location to another, BMO is now better able to track these processes through access to a centralized database of client information.

Similarly, Alan Middleton, professor of marketing at York University’s Schulich School of Business, said banking should be about being available where the customer wants the bank to be available.

Technology has played a key role in enabling users to go from ATM to phone to Internet banking said Middleton, who was the panel’s keynote speaker. Middleton, also executive director of Schulich Executive Education Centre, told bank executives to think of banking as a financial iPod.

“Think of what iPod represents to the way we source music,” said Middleton. “Steve Jobs has built the Apple brand around mobility. If you don’t meet that need then other people will.”

But controlling who has access to information and how much of it they have access to presents new concerns around privacy, said Zucco.

“CRM increases the number of eyes that see information,” said Zucco. “It used to be a filing cabinet.”

Privacy of information is protected through corporate policies, access management, passwords, IDs and encryption, said Zucco, adding BMO is moving towards a role-based system that grants access to employees based on their roles within the company.

Access to information is one of the biggest issues banks are worried about said Raj Juneja, sales executive for security management at Computer Associates.

Juneja said events like this help vendors identify opportunities for their products and services in the financial sector. CA has anti-spyware and anti-spam products, for example, to aid banks with identity theft schemes.

“We’re trying to see if we can assist banks by meeting their business needs,” said Juneja.

BMO also has its own privacy office that advises employees on how to interpret privacy regulations such as PIPEDA and accounting requirements governed by Sarbanes-Oxley in the U.S. To that end, Juneja added that compliance is another big issue facing financial institutions today.

“Banks here are tied to the U.S. and are subject to Sarbanes-Oxley,” said Juneja, adding that Royal Bank, for example, owns Centura. “Because of that, they are under scrutiny to make sure they have the appropriate measures in place so that the CEO can say the numbers are right.”

While privacy issues are a concern, Zucco said the implementation also increases security and reduces the number of errors made with a paper-based system.

On the marketing side, the decision engine behind CRM allows BMO to use analytics to determine what the customers’ next product purchase such as a credit card or life event such as buying a car or a house will be.

“It allows us to be much more proactive,” said Zucco.

However, Zucco added that CRM enables BMO to determine what customers do and don’t want to be contacted about.

That’s why Royal Bank has also been investing in this type of infrastructure, said Irene Sobolewski, senior vice-president at RBC.

“We can give the client the choice if they want to show information,” said Sobolewski. “We can also use that information in mass calculations on CRM.”

Ann Cavoukian, Ontario’s Information and Privacy Commissioner, however, said financial institutions should exercise caution when implementing new technologies such as CRM, which involves merging databases across the organization.

“Don’t erode customer’s trust through procedures and technology,” said Cavoukian. She also advised banks to always look at customers for consent.

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