Computers are now enabling many institutions to make better and more effective connections with their customers.

Face-to-face encounters are often impractical and expensive for companies supporting thousands of customers. While such interaction may be equated with better service, branch representatives need access to a relationship's entire history to make the most of the opportunity.

In the mortgage business, customer relationships are often inconsistent and fragmented as the customer moves through the process of shopping, origination, servicing, and possibly default.

The movement of customers from one department to another and therefore one technology platform to another creates the basic need for effective customer relationship management, known as CRM. By using separate systems to support their origination, servicing, and default management operations, mortgage companies typically create islands that fail to share information. Effective relationship management technology ties these islands together.

Often, each department utilizes separate legacy systems that house only the information about a customer's interaction with that department. They usually manage contacts made through various channels, such as the Internet or phone, separately.

Customers may include borrowers or any number of other constituencies: brokers, investors, realty agents, builders, closing agents, and default lawyers. Relationships with each of these groups can be improved through effective CRM technology.

When information does not flow between systems, cross-selling opportunities are missed. And customers can become frustrated when they are asked again for information they previously submitted over the phone, Internet, or any other channel.

When you use different support systems for each channel, the personnel in originations may not know that a certain customer mentioned refinancing to a servicing representative. Pulling that information together makes cross-selling more rewarding.

In the mortgage world, several activities occur simultaneously in any loan program. There is also potential for confusion and bottlenecking due to rigid work flows. Breaking down barriers between systems may seem like an invitation to chaos, but lenders need the flexibility to define their work flow to create a custom system.

Effective CRM technology not only allows for each group to have tailored information flow, but also allows each individual within the groups to have a tailored process. For mortgage companies, this means that the claim "I've got a deal just for you" can always be true.

This happens when each group funnels information to a central system.

The many tasks to be fulfilled in origination and servicing can then be treated more as parts of a whole and less as steps to be followed in a strict order. CRM technology would allow completion of many concurrent tasks, only sending up red flags when a required previous task has not been completed.

This will allow clerks to get things done without waiting for a previous step to be completed. It would also enable personnel to know what has been done, or is scheduled to be done, by other people or departments.

In the multifaceted mortgage world, this can be thought of as the "herding cats" model, where things are happening rather loosely and independently. A capstone CRM system should allow mortgage companies to extract any desired information from any existing system, in order to create more-open work flow.

Another facet of excellent customer service in today's mortgage business requires fast, effective responses to customer contacts fielded via telephone, e-mail, the Internet, and other channels.

A system that automatically processes each contact and assigns it for action will improve response time and giving personnel critical information. A strong CRM system will tie all of these contact channels together.

The catch, it seems, must come in the nuts and bolts technology of CRM. Does it work only with certain systems, or only provide access to a limited amount of the information stored on legacy systems? Not if the system is done right. If the goal is to tie separate legacy systems together, provide enterprise-wide data sharing, and improve work flow efficiency through user customization, CRM systems must be compatible with any existing system, and have the ability to integrate every piece of information into a single system.

Improving cross-selling opportunities and building stronger ties to existing customers speak to a common theme: it is less expensive to keep and deepen an existing customer relationship than to generate a new one.

Clearly, there are exceptions, but the large-scale cost benefits of this approach are no secret. In the current landscape, mortgage loan pricing information is a commodity, refinancings continue to account for huge amounts of revenue, and financial institutions continue to bring more services under one roof. Given this backdrop, knowing a customer's history is a major competitive tool.

Application of CRM technology is well established in a number of industries. For the U.S. mortgage market, however, this is a new direction. Without a doubt, there will be concerns over the time and money required. Such concerns must not be dismissed. But the ultimate costs, in terms of lost opportunity and customer loyalty, are likely to mean big losses for those who do not understand and pursue CRM.

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