PRESENTED TO:

crnrstone.com gonzobanker.com480.423.2030

PRESENTED BY:

November 3, 2014

CRM in the New World of Lending

Terence Roche - Principal

CUNA Lending Council

1

Lending CRM

62.8%60.5% 60.0%

62.4%

73.2%70.2% 69.5%

72.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013

Loans to Assets

Loans to Shares

Source: NCUA

The Struggle For Organic Loan Growth in Credit Unions

2

Lending CRMWe Grew Up On A Traditional Formula

Traditional Media Marketing

Drives the face-to-face closing

And the cross-sell

3

Lending CRMBut The Rules Are Changing

Mobile and Social Search

Multi-Channel Fulfillment

New World of Engagement

4

Lending CRMBoom! It’s Game On for Lending

5

Lending CRMLending Disrupters are Showing the Future of CRM and Sales

Mortgage Lending

Impact: Interest Income, Origination Fees, Loan Growth, Cross-Selling Opportunities.

The loan offer is integrated into the

research and buying decision.

One Click…

Source: Trulia.com

6

Lending CRMLending Disrupters

Business Lending

• CircleUp is a crowd funding platform that connects accredited investors with innovative entrepreneurs that have solid business models in the consumer and retail space.

• Funding stories on their website range from 550k to 2.5MM

Consumer Lending

• Lending Club, an online peer-to-peer lending community, has funded nearly 3 billion in loans since its inception 5 years ago.

• Quoted from their website: “We bring you a more efficient model. By allowing our members to directly invest in and borrow from each other, we avoid the cost and complexity of the banking system and pass the savings on to you. Both sides can win: better rates to borrowers and better returns to investors. It's that simple.”

Impact: Interest Income, Loan Growth, Cross-Selling Opportunities.

Impact: Interest Income, Loan Growth, Cross-Selling Opportunities

New players want to disrupt lending

intermediation.

7

Lending CRM

Customers Buy The Channel Experience Not Products ● Customers are focused on channels as this is the way

they interact with their financial institution● In this channel centric (and increasingly mobile)

relationship, it’s time to re-think organizational alignment and focus on capabilities per channel rather than products

Experience is Getting Short Shrift in Banking

8

Lending CRMDefinitions of CRM

8

“It’s simply a tool that should help our RMs manage relationships more efficiently and effectively.”

CRM

“CRM is a well defined set of strategies to ensure effective growth or retention of profitable business and consumer relationships.”

“Megadatabase of information accessible to the line for customer service and business development use.”

“An understanding of our profitable customer base as it relates to current wallet share across all subs, in-process product/service discussions and their association with other entities/relationships.”

“A means of providing information to relationship managers to understand all aspects of their client relationships by combining/aggregating accounts by relationship, providing calling history on their clients by any credit union personnel, calculating and showing profitability, and providing sales tracking and business development opportunities.”

“CRM is a set of methodologies and predefined business practices related to management of the customer relationships in this enterprise.”

9

Lending CRMKey CRM Components

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

10

Lending CRM

● Data warehouse infrastructure, support

● The ability to capture and assimilate data from various sources

– Core

– MCIF

– Third party demographic data

– SEG related and provided data

– Channel specific solutions

– Staff production and activity management solutions

– Profitability and other ancillary systems

● The ability to maintain data history

● The ability to perform statistical analysis on the data

Key CRM Components

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

● Most Credit Unions have data scattered in different databases. The ability to draw all of this into a single reporting source is difficult. Vendors have not helped solve this.

● Best practice: Single data repository that norms up different data sources, formats

11

Lending CRMKey CRM Components

● The ability to track new prospects through a sales cycle

– Initial contact

– Offer/presentation

– Follow-up

– Close

● Documents and supporting information is accessible with 1 click

● There is tracking but often in a stand-alone tool such as Salesforce

● Often, new prospect tracking is not integrated with campaigns

● The need foe this is heavier in business and mortgage lending (Originators)

● Best practice: – Tracking and reporting the movement from initial

contact to close phases via workflow– Integration with the decisioning system– Cross-sell integrated into workflow, processing

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

12

Lending CRM

● The ability to create specific offers and present them to members and non-members through any channel

● The ability to assign follow-up to an employee or team

● The ability to track results by campaign, member, employee

● The ability to analyze ROI on the campaign

Key CRM Components

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

13

Lending CRMKey CRM Components

● Current systems do a good job at using member information to create targeted campaigns

● Ability to present the offer through any channel -branch employee, CC agent, mobile, Internet banking -is mixed

● Best practices:– Very flexible campaign selection criteria– Targeted Campaigns with follow-up assigned– All channels show most recent offer, decision

(mobile is a channel)– Method of offer (mailing, e-mail) can be viewed– Hard tracking of approvals that turn into fundings– Offers that were refused, denials are displayed

● The next big things– Loan offer integrated with research, buying

decision– Social marketing– Mobile offers

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

14

Lending CRMNavy Federal Credit Union Make Social Media Count

Engaged members by asking them to submit positive, personal messages about the CU, with the chance to win CU products.

Further engaged members by giving them a chance to vote on winners.

“4 million members, 4 million stories”

15

Lending CRMNavy Federal

Targeted friends of their existing Facebook fans who also fit into military segment.

With social media engagement way up, Navy FCU incorporated auto and other promotional offers into social flow.

Integrate the PR/social part of social media with “soft” efforts that drive business production.

16

Lending CRMNavy Federal Credit Union

Navy’s use of social media as part of the “4 million” campaign has been written about in The Financial Brand and Facebook used the campaign as a standout success story.

The campaign drove in hard dollars:• $90 million in new deposits• 5,400 auto refinance loans (equating to $96 million)

Relative to Navy’s $33 billion in loans and $37 billion in deposits at that time (Q3 2012), that translates to:

• 0.24% increase in deposits• 0.29% increase in loans

Navy also acquired 60k new members and increased Facebook fans by 500% (today over 1 million).

17

Lending CRMKey CRM Components

● Prospect, opportunity tracking with the ability to upload any information tracked to fulfillment systems when a sale is made

– Both from campaigns and individual leads● Employee-level tracking of sales opportunities,

offers made, success ratio● Assignment of referrals to the right resource

with feedback provided to the referring employee

● Fast creation of information to sales leaders for feedback, coaching

● Tracking and reporting of incentives, payments

● Most Credit Unions have some form of tracking sales referrals, but it can involve different systems in the CU and CUSO’s

● Referrals create a task for the recipient, but can often be on a stand-alone “to do” list

● Best practices:– Clear referral goals by business group (not just branches!)– Rigorous tracking and reporting of referral follow-ups– Daily tools for supervisors/coaches to use to manage

●

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

18

Lending CRMKey CRM Components

● Tracking of specific encounters with members that involved:

– Specific issues or questions that require notes, comments

– Escalation and resolution

– Follow-up to offers or campaigns

● Follow-up events

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

● This is largely used for servicing loan, not origination

● Call center systems are usually the ones used by the rest of the CU

● Best practice: – Ability to identify a loan opportunity during a

member encounter and pass to the referral system with case notes

– Campaigns, offers integrated into the case management system inquiry

19

Lending CRMKey CRM Components

● A complete list of all member “touches” with the Credit Union

– Manually tracked by an employee

– Service transactions (branch, call center)

– Self-service transactions (ATM, Internet banking log-in)

– Payments transactions

– Mobile

● Again. largely used for servicing● Most CU’s do put the prospecting/sales

notes in the origination system, not the servicing contact history system

● Best Practices:– Integrated sales and servicing

touches in one system– Integration of campaigns into the

contact history system with one click to see supporting documentation, offers

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

20

Lending CRMKey CRM Components

● Prospect, opportunity tracking with the ability to upload any information tracked to fulfillment systems when a sale is made

● Employee-level tracking of sales opportunities, offers made, success ratio

● Fast creation of information to sales leaders for feedback, coaching

● Tracking and reporting of incentives, payments

Best practices:● Non-owner relationships displayed (guarantor)● Total loans outstanding displayed● One click to see offers accepted and refused

Data Analytics / Segmentation

Prospecting

Campaign Management

Sales Referrals/Tracking

Case Management

Contact History

360 Member View

21

Lending CRMSolution Considerations

Integrated Solutions:Solonis CoreTrac

Sedona Sugar

Kiva Argo

360 View

Core Vendors

Integrated Solutions:Solonis CoreTrac

Sedona Sugar

Kiva Argo

360 View

Core Vendors

Point Solutions:

Harte Hankes

Alliant CRM Systems, TX

Raddon

Marquis

Point Solutions:

Harte Hankes

Alliant CRM Systems, TX

Raddon

Marquis

Toolsets:Oracle

Siebel

SAP

Microsoft Dynamics

Salesforce.com

Toolsets:Oracle

Siebel

SAP

Microsoft Dynamics

Salesforce.com

Internally developed:

Various tools - .net, Java, Sharepoint

Internally developed:

Various tools - .net, Java, Sharepoint

22

CRM Lending

● Does everybody use the same CRM system?

– Insurance, investment, other CUSO’s?

● How do we balance the better functionality of some point systems against the better integration of a single system?

– “The business lending group just bought Salesforce!.........”

● Do we have our “CRM nomenclature” right?

– What is a unique product, service to measure?

● What is our big, first “overweight” goal?

– Sales tracking

– Referrals

– Service events and member encounter tracking

Key CRM System Questions

23

Lending CRM

● Cross-channel marketing and fulfillment and a very strong Mobile Experience

● …meets the next gen CRM Data Mashup and analytics

● …meets the Social Media marketing of upstarts● …meets the Amazon-like fulfillment and support

process● …and is managed by passionate sales leaders with

specific goals and accountability

How Do We Build the Winning Lending Formula With Our Resources?