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COLUMBIA, S.C. – Ray Crouse had to answer a question from the boss the other day. “Our CEO wanted to know what we were doing to investigate CRM software. We came to the conclusion that we already have CRM software here,” says the e-services manager at Allegacy Federal Credit Union (www.allegacyfcu.org) in Winston-Salem, N.C. That’s despite the fact that the $665 million, 73,000-member CU doesn’t at the moment deploy what the industry would call a customer-relationship management package. What the CU does have is a variety of software serving functions that together help the organization understand how Allegacy is used by its members and how the organization can best profit from that relationship. For instance, Allegacy recently implemented a data-warehousing solution from a legacy processing vendor. And it’s in the process of integrating its cost-accounting solution with its MCIF (marketing central information file) system, allowing the credit union to compare member demographics with the profitability of various services and products. And, of course, there’s the Internet. “We use the reporting capabilities of our Web-site host, Digital Insight, and feed the data from members using this into the MCIF system,” Crouse says. So, although the organization is not using a buy-the-package-and-plug-it-in CRM package, “we’re using all of these systems in conjunction with one another to ensure that we are looking at the total picture of our membership,” the e-services manager says. Still, it’s not as simple as that. CRM, or as it’s sometimes called in the credit union world, member-relationship management (MRM), is taking shape in a number of ways, and third-party vendors and core processors alike are taking notice. EVOLVING APPROACHES A number of approaches are evolving. One sees core vendors finding partners to bring CRM to their legacy clients. For instance, USERS Inc. (www.users.com) just announced that it’s formalized its partnership with Transcend Systems to bring CRM capabilities to its 400 core-processing clients, using open-system architecture and industry-standard database technology to provide contact management, member profiling, sales and profitability tracking and marketing capabilities. Meanwhile, CRM providers themselves are working hard to pull their offerings together. For instance, Allegacy’s MCIF provider, Harland Financial Solutions, is offering what it calls its Touch system, which adds to the mix contact history (including notes, faxes and e-mails), marketing campaign reports and even an enterprise-wide help desk. And at least one core processor, XP Systems (www.xpsystems.com) is going through an even more complete metamorphosis. The provider of legacy-system core processing to about 300 credit unions is about to essentially replace (in phases over the next few years) its core Focus XP system with an entirely new system that incorporates CRM functionality, industry-standard relational databases and browser-driven user operations. The new system will be member-centric rather than transaction-centric, says John Edwards, senior vice president of business development for California-based XP Systems. “All of the old legacy systems, and we’re in that group, were designed in the 1970′s and 80′s with the focus on hosting transactions,” Edwards says. “Over the years, we’ve done a good job of adding nice front ends, like Windows and other graphical user interfaces and then browsers, and some companies have even done some work to make their proprietary databases relational,” he says. “But because of the complexity of our systems and all the layers added over the years, all of us legacy guys are in the same boat. You have a system that is transaction-centric,” the XP Systems executive says. “The credit unions that are really going to thrive and prosper in future years are the ones that take maximum advantage of every member contact. For that to happen, the whole core of the system needs to focus on the member, not on hosting a transaction.” Designing the new system, which is expected to launch soon, included a series of meetings with clients to get their input before embarking on the three-year, three-stage strategic plan. DEFINING THE CHALLENGE There’s even discussion as to what exactly CRM/MRM is, complicated by the different ways the idea and the technology has evolved in the past couple years since it became a buzzword. “Ultimately, the technology is just a vehicle to get there,” says Chris Braccia, director of product marketing for the Financial Intelligence Division of Harland Financial Solutions www.harlandfinancial.com). “I sometimes say in talks I give that there is no such thing as CRM. That it does not exist. You can’t buy it in a box and install it, and voila, there you have it. “It’s really about internal processes. About defining where you want to be. About evaluating your core competencies, looking at your strengths and weaknesses and opportunities in the market and building your MRM plan around that,” Braccia says. “It’s really going to vary with each institution.” Terry Treadwell, managing director of CUES Tech Port (an analysis and consulting joint venture of the Credit Union Executives Society and M ONE Inc.), says she divides MRM technology into five basic components: Member profile – The linking of information to allow you to know what products and services a member uses. Information management – Managing all this data using reporting and content-management strategies. Intelligent marketing – Improving the member relationship through such things as data mining and personalization to customize the marketing approach. Sales and service automation – The contact management piece, including sales profiling and referral tracking. Channel integration – Integrating branch, Web and call-center systems. While progress is being reported on finding more dynamic ways to track and analyze transactional data through the various channels in which they now occur, member contact as a whole is another matter altogether, one observer says. Treadwell quotes one of the credit union executives contributing to CUES Tech Port (www.cuestechport.com) as saying they “are living with essentially the same solutions on the platform that they’ve had forever. No one has integrated contact management or help-desk solutions into their primary teller platform. She believes that these two pieces of technology are absolutely critical if they are going to make any advances in MRM processes.” NOT GOING IT ALONE Credit unions are not alone in the struggle. A recent Forrester Research survey of 50 banks, brokerages and insurance companies showed that only about half had integrated their products across all channels. They also reported spending $1 million to more than $20 million a year in the process. Those are big companies with big budgets. But Treadwell says, “I also think we will see the technology components of CRM become more affordable to smaller credit unions as cooperative industry efforts enable this group to remain competitive.” Remaining competitive, of course, means meeting consumer expectations, which is the main point of all this new technology. “Member expectations are increasing. They’re expecting more high-touch service from their financial institutions, just like what they’re getting in the retail world,” says Braccia at Harland Financial. “They expect to be known by their credit union or whoever they’re dealing with, and they want to do business 24 hours a day, whether it’s at the branch, over the Web, through voice response or at a kiosk.” Tracking and learning from all those contacts are at the core of the CRM/MRM strategy. Braccia’s company and others hope to meet that challenge with broad-based, customizable solutions that credit unions can then use keep track of member contacts through multiple channels, tailor specific ad messages, ensure member complaints aren’t lost in the shuffle and generally win the consumer game on service as well as costs. -

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