Do community banks even need CRM? (Customer Satisfaction).

In a recent speech before a group of bankers in Minneapolis, Mark A. Nishan, deputy comptroller of the U.S. Office of the Comptroller of the Currency (0CC), made the point that community banks, which compete on the basis of excellent customer service, are anything but dinosaurs.

While large banks have more capital and financial resources than smaller banks, big financial institutions have grown too far removed from their "food supply"- their customers. Community bankers see their customers every day.

One of the "buzz words" in banking today is CRM (customer relationship management). This usually refers to expensive software and application integration projects intended to make big banks look and act more like small banks, I am inspired to compile the following "Five Reasons Why Small Banks Don't Have to Wony About CRM."

We already know our customers. CRM systems are installed to help the giants know their customers across the "enterprise" (read "silos"). Large banks are often bureaucracies of narrowly focused specialists who can't or won't connect the dots when it comes to serving customers. This poor service is not the fault of usually well-meaning employees, but the unintended consequence of the missteps of far-removed managers. Community bankers, on the other hand, see their customers every day, listen to their problems and connect the dots in real time.

We don't need market segmentation. CRM systems are big on segmenting customers into groups and then parsing out service and attention according to who you are, This is a good idea, of course. The reality is, community bankers do this on a one-to-one basis, instantaneously. While big banks are spending more and more money trying to engineer a data mining system to help serve that illusive "market of one," community banks do it spontaneously and quite well.

We already know the problem. One of the great promises of CRM systems is that they quickly surface customer problems so that they can be solved somewhere and the customer relationship saved. Satisfaction surveys identify "quick problem resolution" as one of the holy grails in our business. The fact is community banks already know the problem and have it solved before it is ever entered into the "system" That's because the customer is right there in their faces screaming. With only one layer of management to work through, things happen fast.

We already have a staffing model. Another great promise of a "robust" (I love that word) CRM model in a large bank is that with everything captured and regurgitated in a totally digital environment, the branches will have a scientific "model" with which to staff their branches: that is, a way to make sure that there are enough tellers there when the customers are there and not too many when they aren't. In a community bank, the president, the HR manager, and the CEO work this out on the back of an envelope. They instinctively know the "correct" wait times, processing times and arrival patterns. It's only when you get three layers away from the customer that things begin to get murky,

We already have happy, well-qualified bankers. It is also often promised that a CRM program will allow banks to reduce turnover and build a staff of happy bankers, because it will be a more enjoyable place to work. Good bankers get satisfaction from being able to help their clients, and a $20 million CRM system will put everything at their fingertips so that this can happen "across the enterprise." Well, in most community banks I know, seasoned, well-qualified bankers abound. They like their jobs, feel well respected as professionals in their community and are truly adding value to their clients.

So, maybe it's true that the big reason why large banks are buying expensive CRM systems is to "get small" enough to compete with their community bank adversaries.

L. Biff Motley is president of Motley & Associate, New Orleans. He can be reached [phone].