Tuesday, February 26, 2008
Customer Relationship Management
Assuming a traditional family, a local bank focused on Customer Relationship Management (CRM) would likely track the following information:
- when ATM withdraws are made
- family member ages
- when a home was purchased
- annual salaries
- monthly expenses (bill pay)
- investments and securities held
- insurance owned
- debt to income ratio
- credit score
Given these detailed facts about this family, what might be the bank's CRM response to the following events:
- The family elects to have another child - In this scenario the bank would likely attempt to interest the family in mortgage refinancing options, savings accounts, long term investments, or perhaps alter the current insurance policies
- The loss of a job - Such an unexpected event is as troubling to the bank as it may be to the unemployed. The bank may seek to offer insurance coverage for credit instruments or assist in the liquidation of investments.
- A grandparent is stricken with a severe and long term illness and has no medical insurance, leaving you to pay the bill - The bank may offer an extension of credit or remind you of your own need to purchase long term care insurance. A refinancing option may be provided on your home.
- Repetitive transaction fees are assessed for using an ATM not in the bank's ATM network - The bank may encourage you to begin using an online banking option if available or suggest more frequent point-of-sale (POS) purchases.
- Identity theft - The bank may institute a program to alert you if unusually expensive, repetitive, or uncommon purchases are made. They may offer to cancel and replace any cards that may be unaccounted for. In addition they may contact a credit reporting agency to notify them of the event.
- An addition is built on the client's home - A refinancing option may actually provide more income to the homeowner through a combination of increased property values and decreased interest rates. A loan could also be offered to cover the immediate costs of renovation.
Although it may be disconcerting to some to have so much personal habits and information being tracked by third parties, we also readily take advantage of the benefits from targeted advertising and a reduction in traditional "junk mail" or "spam".
