I remember when I first heard the term Customer Relationship Management, it was back in the late 90’s and I was optimistic about landing a job with a software shop that developed a CRM solution. I managed to get past the first few rounds of interviews before I finally had to meet with the CEO, Bill Tatham. This is what I remember most from that first encounter.

Bill asks, “So Matt, what is it that we do?”

And I respond, “You aggregate customer information so that firms can provide better service.”

A pretty simplistic answer. I certainly did not attempt to go in to the weeds of what the technology was capable of doing, but seeing as I am working with Bill nearly 20 years later I apparently passed the test.

Back then the customer information all belonged to the firm that was implementing our solution and it resided in back office repositories or other systems of record. Today firms still have the plethora of their own systems that contain customer data but with the rise of the internet and the advent of social channels there are so many more places to find customer information.

The data available on social sites could possibly be the most accurate customer information a firm can reference. After all, it’s provided and kept current by the individual. In fact, Microsoft feels so strongly about this that they are paying $26.2 billion to acquire LinkedIn in order to access the 433 million profiles on the platform.

This could present a few challenges in the financial services industry. For instance, if information about someone becomes evident but is not in the Know Your Customer (KYC) record, is it incumbent on the firm to add it? If it impacts on how a portfolio should be structured must the firm proactively bring it back to compliance? The industry will have to address these questions as the digital revolution continues to advance.

An enhanced customer profile, however, is not the only benefit to having social as part of your CRM strategy.  One of the things we like to endorse to drive loyalty and relationship building is the non-financial proactive touch, reaching out to your customer about something that is not business related. To accomplish this, a financial advisor can use social publishing technology to push news based on what the CRM profile says is of interest to the customer. Or, use social listening to recognize when a customer has had a life event occur, such as the birth of a child, and send them a congratulatory note.

There is also the potential for greater collaboration. For instance, a firm could use an internal community to serve a customer or an external community to facilitate cooperation between a group of customers.

And, of course, a financial advisor would be remiss if they were not able to converse with their customer on their channel of choice. Social media engagement is becoming increasingly important, particularly as advisors are seeing their book of record transfer from parents to children.

If you have other ideas about how the financial services industry can gain advantage from social technology, please leave me a comment.