The Good Use of CRM in Private Banking

In the last instalment of the Banking Metamorphosis, the focus was on the concept of Relationship Management and the key factors in achieving a win-win relationship for both the client and the bank. As I pointed out, to get the best out of the client and the banker relationship, a proper Customer Relationship Management (CRM) tool needs to be in place as opposed to managing interactions through Excel spreadsheet or a diary.

The Good Use of CRM in Private Banking

No matter how great the banker is, managing a portfolio at this level and the sophistication of the client has to encapsulate all the necessary data for trend   analysis to help understand the client. The way a client interacts with products and services always leaves clues to help the bank cater for clients’ needs. As expected, the information would be limitless, and this is where great and relevant CRM tools become useful to support the relationship management function.

Generally speaking, it does not matter what profession you are in, the mantra “ex tridens scientio,” which translates into knowledge gives you power, has stood the test of time because decisions regarding the client and portfolio management are based on facts and clues. The need to understand the customer behaviour is the perennial interest of many relationship managers, their team leaders, as well as bank executives. The focus on   customers who can deliver long-term profits has changed certain fundamentals in relationship banking. Traditionally, bankers have been trained to acquire customers, either new ones who have brought the product before or those who are currently with competing banks. Today, for the most valuable clients (dependent on the bank’s priorities) the tone of the conversation has changed from customer acquisition to retention, and this requires a change in mindset supported by relevant tools. defines CRM as a technology for managing a company’s relationships and interactions with customers and potential customers, and the main objective is to improve business relationships to grow the business. Furthermore, CRM is a business strategy of understanding a customer, supporting desired customer experience and building profitable loyalty.  

There is a plethora of CRM systems nowadays, the most popular 10 of which are HubSpot, Odoo CRM, Sage CRM, Sugar CRM, Sap CRM, Oracle CRM, NetSuite CRM, Salesforce, Zoho, and Microsoft Dynamics CRM and are available depending on the business needs. Some are even offered for free. Banks can also opt for in-house CRM systems and there is even potential to partner with   firms that specialise in design of CRM systems.

It is worth pointing out that CRM will always mean different things to different people and organisations. In private banking and relationship management in general, the CRM tool needs to be provided with insights to what private bankers and executives need to know about their customers and how that information can be used to develop a complete customer relationship management perspective.

The starting point should definitely be building a robust and accurate customer database. An efficient CRM tool will assist a private banker to find a database at his/her fingertips, thus bettering the Customer Data Organisation. As part of the on-boarding the client, information relating to relationship management can be requested from the client in order to assist the banker to know the client better. Requested and consented information can include aspects of the customer about family, friends and people in his/her circle of influence or relevant information about the customers such their birthday, anniversaries and religious dates.

Once the information is stored, triggers are then set as reminders prompting a call, e-mail, a text message and/or face-to-face interaction.  The output in using a CRM in this regard is that therein lies recurrent, germane and enhanced communication between the client and the banker or the bank in its entirety. Other facets of the information collected can trigger responses such as automated e-mailor text messages to the client, thus improving both communication and positioning.

The other inordinate aspect of using CRM is the prospect of sharing of Information that is readily available and on real time when required.   A relationship is not a solo effort as the custodian of the relationship is usually supported by a transactional banker and a credit team, a fiduciary expert and/or a wealth manager. The ease with which the customer interacts with bank products and services is immensely paramount through an analysis of preferred channels of services and the customer experience from those touch points. CRM will again come in handy and provide all important analytics.

The hallmark of a CRM tool is also to assist private bankers to know the performance of their clients. Profitable and not so profitable clients are also identified and opportunities are created to improve the vertical Sales Index(VSI) either by cross selling, up selling or switching of products to much relevant ones and in line with the client’s profile. It should be emphasised that in the case of private banking, client’s product push is a definite deal breaker because solutions should rather be espoused and must align with the needs of the client.

For bank executives in private banking, CRM tools are also able to provide a window for gauging how private bankers interact with clients. The winner here is not only the tracking of the conversations and productivity on the part of the banker but the client as it is ensured that both tactical inputs and outputs are in line with the bank’s private banking strategy. In private banking, the emphasis has always been on deepening relationships with clients by means of  relevant and meaningful conversations in  support  of their journey in wealth creation or preservation, depending on the client’s profile.


Mr Gomolemo Kololo Manake

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