ATMs Equipped With CRM Help Build Relationships

Register now

A member walks up to your ATM machine, swipes his card and punches in his PIN. He extracts $100 for the weekend in crisp, clean $20 bills. Upon completion of the transaction, a message flashes across the small digital readout: "You've been pre-qualified for an auto loan of up to $20,000. Would you like a member services representative to contact you?"

This is not a question the ATM asks every single member, only those it knows pre-qualify thanks to the customer relationship management (CRM) strategies and software provided by S1 Corporation.

"This is a relatively new concept and we're still working with NCR and Diebold to make it happen," explains Bob Tyler, vice president of CRM solutions for S1, the technology spinoff from Security First Bank, which became the first entirely online financial institution 10 years ago. "ATM network configurations can make this challenging, but the situation is changing."

The Nature Of CRM

Such is the nature of CRM, a marketing strategy that also is changing. Software-based segmentation and service programs are growing both in importance and implementation throughout the financial services industry, especially among credit unions. CRM is not new, Tyler says, and has long been linked primarily by its technology to credit union IT systems. What many still lack is what Tyler calls "the human touch."

"S1 provides an integrated solution to CRM that goes beyond the software alone," he says. "CRM software allows for easy aggregation and subsequent review, measurement and segmentation of groups. But that information has to travel down to the front lines where member contact occurs. Otherwise, it will do the credit union little good."

Most financial institution strategies are based on point-in-time data, static information that is an operational snapshot of certain member activities and soon out of date, possibly even before it can be effectively used for planning.

"CRM allows the credit union to examine a broader historical perspective of member behavior and transaction activity," he explains, "including account balances, transaction information and credit data."

Understanding and applying that information is what S1 calls the "analytics" portion of its CRM solutions. Once the capability exists within the credit union, Tyler highly recommends that staff be trained to use the data at the point of purchase for maximum effect. "Banks generally just want the system installed so they can get underway," Tyler says. "Credit unions, almost to an institution, have scheduled planning so that staff understands and can use the strategy effectively.

"Up until now CRM solutions have been system-driven," he adds. "We're trying to make our program and its strategies member- driven."

Despite the initiative, financial institutions of all kinds still lag behind such industries as the airlines and retail sales, whose CRM efforts have led to the development of the familiar Frequent Flyer programs and buyers clubs. The high cost of technology has long keep smaller institution at arm's length, but Tyler says S1's software can be operated on a single desktop server with relative ease and minimal expense compared to the value such information will bring to the institution's marketing segmentation.

Integration Means Better Results

Moreover, CRM results that are well integrated and utilized by the credit union can yield much greater results. Good direct mailings yield a 1% response, Tyler notes. Segmented data well-used can increase that response to between 8 and 10%, he adds.

Right now four credit unions are involved in the full S1 system, with about a dozen others using different parts of it, Tyler says. New flexibilities will make CRM even more accessible in the months to come.

"Most CRM segments are based just on historical account data," Tyler notes. "Our system allows for front-line input of information gleaned through member contact. Someone may casually mention that he or she will be interested in a car loan in a few months. That data can be added and the proper marketing materials sent out at the appropriate time."

Of course, there's always the chance that the credit union's ATM will beat the marketer to the punch.

For reprint and licensing requests for this article, click here.