Customer relationship management (CRM) is a critical tool for businesses of all sizes, but it can be especially challenging for neobanks. Neobanks are digital-only banks that are often founded on the principles of agility and innovation. This can make it difficult to implement CRM, which is often seen as a more traditional approach to customer management.
Statista notes that the Neobanking market is forecasted to witness a transaction value of USD 4.74 trillion in 2023, with an anticipated annual growth rate (CAGR 2023-2027) of 18.15%. As a result, the projected total transaction amount is expected to reach USD 9.24 trillion by 2027.
In terms of user numbers, the Neobanking market is expected to reach 376.90 million users by 2027. User penetration, which is currently at 3.3% in 2023, is projected to increase to 4.7% by 2027. In such a growing market, it is crucial for neobanks to judiciously use CRMs.
In this article, we will discuss the five biggest challenges of implementing CRM in neobanks. Additionally, we will offer valuable suggestions on how to conquer these obstacles.
5 Biggest Challenges of Implementing CRM in Neobanks along with Solutions:
1. The Need for a Scalable and Secure Solution
Neobanks are growing rapidly, so they need a CRM solution that can scale to meet their needs. This means that the CRM solution should be able to handle a large volume of customer data and transactions. It should also be able to handle the increasing number of customer interactions as the neobank grows.
Bill Good Marketing notes that in addition to being scalable, the CRM solution also needs to be secure. This is because neobanks handle sensitive customer data, such as financial information and personal details.
The CRM solution should have strong security features to protect this data from unauthorized access.
Here are some tips for choosing a scalable and secure CRM solution for neobanks:
- Look for a solution that is cloud-based. This will allow the solution to scale easily as the neobank grows.
- Ensure the solution has strong security features, such as encryption and access controls.
- Choose a solution that is compatible with the neobank’s other systems. This will make it easier to integrate the CRM solution with the neobank’s existing infrastructure.
Here you can learn more about selecting the right CRM solution for neobanks.
See Also: 7 Emerging Banking (Financial) Technology Trends
2. The Need to Integrate CRM With Other Systems
According to Business News Daily, organizations rely on a wide range of software applications, such as email clients, accounting software, and social media dashboards. However, the use of multiple separate tools leads to the creation of data silos, which are isolated pockets of data that certain teams cannot access.
This segmentation of data results in fragmented customer profiles, thereby restricting the CRM’s capacity to effectively track the customer journey. To get the most out of CRM, it is important to integrate it with these other systems. This will allow neobanks to share data between systems and provides a more holistic view of the customer.
However, integrating CRM with other systems can be a challenge. Different systems often use different data formats and protocols, which can make it difficult to integrate them. Additionally, neobanks may not have the resources or expertise to integrate CRM with other systems in-house.
There are a few ways to overcome these challenges. One way is to choose a CRM solution that is designed to integrate with other systems. Another way is to hire a third-party integration company to help with the integration process.
Integrating CRM with other systems will help neobanks improve customer experience, increase efficiency, and gain a competitive advantage.
3. The Need for a Customer-Centric Approach
In implementing CRM systems, neobanks face the crucial challenge of adopting a customer-centric approach. Traditionally, the banking industry has been product-focused, but neobanks prioritize customer experience and personalization.
Leveraging CRM will help neobanks gather and analyze customer data, gaining valuable insights into preferences, behaviors, and needs. However, shifting to a customer-centric approach requires organizational alignment and a mindset focused on building lasting relationships.
Neobanks must ensure that their CRM implementation aligns with this customer-centric vision, fostering trust, loyalty, and satisfaction among customers in an increasingly competitive market.
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4. The Need for a Cultural Shift
One of the significant challenges in implementing CRM in neobanks is the need for a cultural shift. Neobanks often have a unique organizational culture characterized by agility, innovation, and a customer-centric mindset.
Introducing a CRM system requires employees to embrace new processes, adopt customer-centric practices, and prioritize data-driven decision-making. This cultural shift entails breaking away from traditional banking practices and fostering a mindset of collaboration, adaptability, and continuous improvement.
It requires effective change management strategies, clear communication, and comprehensive training programs to help employees understand the value of CRM and align their behaviors with the new customer-centric approach.
Fostering a culture that supports CRM implementation will help neobanks optimize their customer relationships and maximize the benefits of CRM technology.
5. The Lack of Resources
One of the significant challenges faced by neobanks when implementing CRM is the lack of resources. Neobanks, often characterized by lean operational structures, may have limited budgets, staffing, and IT capabilities compared to traditional banks.
Consultancy.uk notes that despite their impressive valuations, it is estimated that only a mere 5% of neobanks are currently able to reach a break-even point, let alone generate profits. Neobanks heavily rely on significant investments. However, as an upcoming recession looms, investors are becoming more cautious and providing fewer and smaller financial support.
With a decline in capital inflow, especially towards fintech companies that have yet to demonstrate efficient capital usage, neobanks are confronted with a challenging path ahead. Moreover, the increasing cost of living may prompt individuals to revert to their traditional bank accounts as a means to weather the recession.
This resource constraint can impede the successful implementation of CRM systems, as it requires investments in software licenses, infrastructure upgrades, training, and ongoing support. Moreover, neobanks may need help to allocate dedicated personnel for CRM implementation and management.
Neobanks must carefully prioritize and allocate resources to address this challenge and seek cost-effective solutions to ensure a successful CRM implementation.
Related: Top 5 Challenges in Developing FinTech Apps
Conclusion
While neobanks encounter various challenges in implementing CRM systems, it is crucial not to be discouraged by these obstacles. Rather, they should be viewed as opportunities for growth and improvement. By embracing these challenges, neobanks can gain valuable insights into their customers, refine their product offerings, and enhance their overall service quality.
