Decades ago, banking executives and strategists heralded the arrival of systems that would provide complete profiles of customers, enabling banks to know exactly which customers needed certain products or channels. The term CRM, or customer relationship management, was born.
The idea seemed great, but it wouldn't last. Nowadays, customers have more choices, and in today's 24/7 environment, they are demanding more. As a result, banks are discovering that CRM hasn't worked for them. Paul Jameson, chief executive officer of e-Bank, based in Columbus, OH, knows why.
"CRM is a misnomer," he says. "The industry has been talking about CRM, but it's really been channel management, and not really all channels, and not what the customers wanted."
Jameson says that since the mid-1970s, banks have been "product- centric," adding more products and more channels. But surveys of bank customers have shown a majority are not seeking a particular product; what they want is more personalized service. Often these customers opt for asset management institutions or "the Charles Schwabs, who have a personalized portfolio mentality," adds Jameson.
Enter e-Bank, which Jameson says will meet the needs of "anytime, anywhere" consumers-those he calls "New Economy Consumers." Incorporated in June 2000, e-Bank has five partners, including Huntington Bancshares Inc., a regional bank holding company, also based in Columbus, with assets of $29 billion. Other partner/investors are Houston-based Compaq Computer Corp.; Beaverton, OR-based Corillian Corp.; Science Applications International Corp., or SAIC, with headquarters in San Diego; and Redmond, WA-based Microsoft Corp.
The e-Bank solution, simply put, delivers a real-time view of each customer's profile and bank interactions by integrating all channels within the bank. Its platform enables "personalized anywhere-anytime banking" based on an IFX/XML architecture. Thus, instead of depending on many disjointed back-end accounting systems, there is one platform that connects all channels on a real-time basis.
The past has created a problem for banks, according to Bill Randle, executive vice president of e-Huntington, the subsidiary which developed and patented the technology, then contributed it to its parent bank, which contributed it to e-Bank.
Banks have had many legacy systems in place for years, and these legacy systems communicate in vertical formats for a particular customer account base. The "monumental challenge," as Randle calls it, has been to develop a technology that goes across legacy systems. This is too expensive for most banks, even if they were able to accomplish the task, he says. But e-Bank provides that solution and already has integrated core applications from such systems as Hogan Integrated, First Data, Alltel/CPI Mortgage system, The Hartford, CIC Analytix, Oracle Financial Services Application, Unitech's ACR/Plus, ISI BankMatch, as well as many others.
"We need to migrate away from legacy systems, and the idea of people trying to change legacy systems," says Jameson. "Our first decision was not to be channel specific, but provide a central information system. Every channel gets fed from a central hub. We house it in front of the product system, and the channels go to the e-Bank platform."
Banks don't have to throw out their current systems, he explains. Instead, information is given to each channel, allowing it to be what it was designed to be: a channel. And if a bank acquires a new lending system at some point, it can be easily hooked into e-Bank. There's immediate integration to all channels.
Another advantage of this system, Jameson adds, is that while legacy systems must be taken down for batching, the e-Bank platform works 24 hours a day, seven days a week. "We house the data real-time within a bank and synchronize it back to the legacy systems."
What this means is that customers can withdraw money from an ATM, go home and access their account on the Web, and already see their withdrawal on the screen.
Tim Scholten, senior vice president of Huntington Bancshares, says there are three main benefits to e-Bank. First, the bank gets one view of the customer. "All customer information is in one place, and in the same format and fashion despite different back-end legacy systems," he says.
Secondly, the bank has contact history for each customer. "You can see their whole relationship (to the bank) and head off problems."
Finally, the bank is able to append analytical information. This allows the bank to give each customer tailored messages, and those marketing messages are the same across all channels. So when customers have a question, they can go to any channel and consistently "get the same answer and explanation," Scholten says.
E-Bank, whose target market is financial services institutions with up to $100 billion in assets, allows those banks to track each customer event and understand how and when to respond to a customer in that customer's preferred method, adds Scholten.
Huntington brought e-Bank online on the first of the year. "We are building toward two years of history on each account," Scholten says of the implementation. "It's a journey. Not everything is up and running and perfect, but we have the contact history and single picture of customers now."
The next phase involves the marketing analytical component. "For the first time, we're able to get our arms around how our customers use Huntington," Scholten says. "There's been a smooth transition."
Indeed, Dan Vermeire, chief technology officer at Huntington, explains that the "back end is already done for me with e-Bank. You just hook up your delivery systems" to the e-Bank platform. As of the second quarter, Huntington had 18 of its legacy systems hooked up and six delivery channels at varying stages, Vermeire says.
CEO Jameson, who joined e-Bank in June 2000 from Cap Gemini Ernst & Young, where he was vice president of North American Banking, says the system is deployed incrementally, which cuts initial expenses.
"It was designed to have a low cost of entry," Jameson says. "We've reduced the redundancy in the interfaces, reducing the cost of maintenance. We can deploy in 30 days."
Thus, banks pay as they get value-as the number of customers is fed into the system and the number of channels. "Buy by the pound," Jameson calls it, noting that he hopes to have five new clients by year's end.
However, banks implementing e-Bank are not solely concerned with technological implementation, notes Vermeire. Clients also want to re- train employees.
To facilitate that retraining, e-Bank has produced a virtual experience booth called Empowered Banking Experience. Housed near e- Bank's corporate headquarters, the 6,000-square-foot, hands-on facility takes visitors through real-time interaction with attended and non- attended channels powered by e-Bank.
Several hundred Huntington employees have gone through the "experience," Vermeire says, and their reaction has been positive. Vermeire sums up employee response: "Ah ha. Now we understand from a whole enterprise perspective, while before we understood from one channel."
The CTO adds, "This is holistic thinking. Customers think of a bank as a whole entity, not just a channel." That's what banks and their employees must realize-and can realize through e-Bank, he says.
As Scholten points out, the "risk is in changing the culture of an organization as you change the technology. You need to change the behavior of your employees and put disciplines in place." He adds, "We've engaged our senior managers to drive the cultural change. This must come from the top down."
Potential clients of e-Bank also take a journey through the Empowered Banking Experience. "We built a true physical live environment that you walk into," Jameson says of the Empowered Banking center. There's Web banking being fed by an e-Bank platform running live. To personalize the experience, customer information is fed into the system, with names and Social Security numbers changed. "So they go in there as if they're customers," he says.
According to Randle, the e-Bank system not only allows midsize banks to compete with larger banks, other advantages also will develop in the future. Eventually, he sees how e-Bank may help Huntington deliver "best of breed" products through the Internet-products that other banks can buy, brand and sell to their own customers.
"E-Bank allows banks and financial institutions to be more responsive in the marketplace and more competitive," he says. "It's going to change the dynamics of bank marketing."
Jan Jaben-Eilon is a freelance writer based in Beachwood, OH.
