Poor Lead Management Practices Cost Banks More Than Lost Sales

The days of sticky notes, clogged processes and lost leads should be long gone. A changed marketplace demands that bank and credit union marketers embrace CRM technology, not only for the benefits it can provide for lead management, but to protect your brand's reputation.

If you’ve had your ear to the banking ground of late, you’ve most likely heard the terms “legacy technology” and “digital transformation” thrown around a lot. The need to move away from the first and embrace the second is a major switch-up for financial institutions. It’s a change that could either be seen as exciting or terrifying — depending on where your financial institution stands and if you’ve got the right technology in place to help you along.

No matter what you’ve heard, let’s set the record straight here. Digital transformation is no longer a nice-to-have, but a mandate for staying in business. And that means that every bank or credit union is experiencing a reset, if you will, which impacts financial marketers very directly.

One clear example is that the lead management processes of the past have become obsolete.

Make Or Break:

It’s imperative that banks and credit unions scrap their analog lead systems and replace them with automated systems.

But what exactly does this lead management transition mean, and how will it affect you and your financial institution? Well, if your bank or credit union has already said goodbye to analog methods and spreadsheets — rife with human error — and said hello to automation, then the change won’t affect you as much.

However, if your financial institution hasn’t done this, and is still relying on analog methods, it may end up as a casualty — both financially and legally.

But there are ways to avoid that fate. This article is a guide in your journey forward.

Past Inefficiencies Are Slowing You Down

In the current market, over 70% of leads at financial institutions wind up falling through the cracks. As you can imagine, this statistic means dollars are being left on the table and ultimately it can cause major damage to the bottom line.

But why is this number so high? The answer may be simpler than you’d think.

As already stated, the lead management processes of the past are not working. Or, at the very least, they’re not working in your best interest.

Too many financial institutions today are relying on antiquated systems — whether that be legacy technologies, sticky notes left on a mortgage officer’s desk, or emails forgotten in your inbox.

As a result, salespeople have no insight into their goal attainment, such as whether a lead has been worked by another team member, unique opportunities they could potentially offer to the lead, or even visibility into where the best leads are coming from.

The Very Real Risk of Redlining Fines

The old methods of lead management can also negatively affect your financial institution in much more serious ways. Think fines, banned mergers and acquisitions, reputation impact and even branch closures.

Undoubtedly, all things to be avoided at all costs.

But how, exactly, can just the lead management process result in such huge consequences? Like before, the answer is simple: redlining.

For those who aren’t aware of it, redlining is when a financial institution refuses to lend to a particular demographic, which, under the Fair Housing Act and Equal Credit Opportunity Act, is a huge deal. It’s seen as discrimination because race and ethnicity are often tied to the practice. Obviously, this is something no financial institution wants to be accused of.

Now, while the definition of redlining states that the financial institution is refusing to lend, that’s not always true. Often, that “refusal” is nothing more than a lack of attention and time. A mortgage loan officer may simply be prioritizing her workload based on leads she knows are going to close, no harm or discrimination is intended.

However, if this mortgage loan officer continues this pattern of behavior, and this discrepancy isn’t noticed by management, regulators don’t care about intention. This is redlining, plain and simple, and that’s where all those consequences come into play.

The Right Technology Is a Problem Solver

There’s a solution to both problems listed above: the right technology.

A lead management system is pivotal for the success and security of your organization, and when looking for the right solution, there are two main options available. Stand-alone programs and customer relationship management systems.

When it comes to long-term success, a CRM is really the best option on the market. However, not all CRMs are created equal and picking the right one can be daunting.

It’s pivotal to look for a CRM that 1. has a lead management workflow, and 2. comes equipped with SLAs (service level agreements) created for every lead. SLAs ensure complete visibility into the lead journey. This means if a lead falls outside of the time allotted, it will be escalated to management, reducing the risk of inadvertent redlining.

Automated Watchdog:

A good CRM will flag leads that fall outside of a specified time frame for action, reducing the risk of inadvertent redlining.

This also means a lead that would have otherwise fallen through the cracks will now get the chance it deserves. The best CRMs will also automate the follow-up process and generate pre-approved offers for salespeople to take advantage of — no more guessing involved or dollars left on the table.

About the company: CRMNEXT offers a CRM built specifically for banks and credit unions with their unique pain points in mind and is dedicated to helping you simplify work, expand growth and ultimately deliver on experience.

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