The financial industry has undergone much change over the past decade. Among the most-notable trends has been the movement toward consolidation -- namely mergers and acquisitions. However, the overwhelming majority of corporate M&As do not produce the envisioned increased revenue and profits, often because the merged entity fails to adequately leverage the combining organizations' strengths.
As part of their sales responsibilities, financial services professionals religiously network with business and other institutions ultimately to generate business opportunities. Over time, their networks of relationships become ongoing sources of referrals and new business. In theory, the networks and their power would be doubled after two companies join forces.
After a merger, however, a major disconnect immediately emerges because the relationship networks between the two formerly independent firms are not integrated. In most instances immediately following a merger, individuals are not well acquainted with the new bankers or other financial service professionals that now comprise their firm, let alone the relationships that they possess that could be instrumental in business development. But it is precisely a firm's ability to capture and track these additional relationship networks that will determine how successful the merger will be.
At many successful financial institutions, CRM software capable of managing and tracking relationship intelligence has been implemented to help leverage the collective relationship networks of all investment professionals within the organization. CRM software also can play a key role in quickly linking the relationship networks of all the employees within the newly combined entity. Through social networking functions built into these systems, users can instantly view who else within the firm has a relationship with, for example, a prospective client. Some systems also offer relationship-mapping capabilities, providing users with a relationship pathway to a prospect via intermediary relationships.
How CRM Drives Revenue Post Merger
The examples below illustrate how CRM software can help a firm generate more revenue post merger:
1. Uncovering new strategic relationships. A banker's ability to leverage the firm's strategic relationships with clients and contacts is fundamental in business development. After a merger, the number of potentially valuable relationships has just multiplied. A CRM system will instantly reveal those relationships, providing new avenues to win business.
2. Enhanced cross-selling capabilities. Cross-selling serves as one of the most effective and inexpensive ways to generate revenues. To succeed at cross-selling, employees must have a 360-degree view of the client's relationship with the firm. However, in a post-merger environment, where familiarity with new team members is naturally at its lowest, effectively aggregating experience and expertise information and applying it to existing opportunities can be a near impossible task.
CRM systems can drastically reduce a firm's unfamiliarity with its own knowledge resources and increase visibility of the relationship intelligence required in effective cross-selling. For example, CRM systems can integrate with human resources, contact managers and other back-office systems and combine this data to provide a holistic view of clients and their entire relationship with the organization. Once deployed, this allows users to instantly view profiles of clients, previous transactions and the like, greatly simplifying the process of recognizing and appropriately staffing new accounts with employees who have relevant experience.
3. Retaining institutional knowledge. When key staff retire, leave the company, or take a personal or medical leave, a company's ability to service customers and pursue new business can be significantly affected. This is accentuated in knowledge-based industries, where the retention of an employee's institutional knowledge after a departure is critical in allowing a company's key assets to persist. CRM prevents information from walking out the door when professionals leave, allowing the other employees or new hires to take advantage of the valuable information that leads to new business opportunities.