From Rolodex to Ecosystem: How AI is Changing CRMs in Banking 

Transcript

Virginia Heyburn (01:49.558)
Welcome back to another episode of FinTech Unleashed where we explore the latest technologies and strategies shaping the future of the financial services industry. My name is Virginia Heyburn and I'm the Director of Research, Insights and Advocacy at EngageFI. Today we're diving into one of the most critical strategies for banks and credit unions right now. It's one.

having accurate and broad swaths of data on our customers and members, and number two, having the tools to use that data in smart ways. So it's no surprise that CRM and AI are top of mind for every financial services executive, or should be. So let's talk about that. Joining me for this important discussion today is my colleague, James White. James is principal strategist at EngageFI, and we're going to unpack what makes CRM different today.

We'll clarify the distinction between different types of AI. We'll examine some real-world use cases where these technologies are already reshaping customer and member relationships and the experiences that they have with financial institutions. And then finally, we'll look ahead at how CRM and AI-driven banks and credit unions can future-proof their cultures and their organizations for the decades ahead. Clearly, there is a lot to unpack here, so let's get started.

Virginia Heyburn (03:18.572)
James White, welcome.

James White (03:20.84)
Thank you. I'm excited to be here.

Virginia Heyburn (03:23.67)
Wonderful it's so great to have you on the podcast. I've so enjoyed our conversations and you just bring up frankly an enormous amount of insight to a very confusing topic for so many bank and credit union executives today. Now tell me, tell me who you are, tell us who you are, what's your background and what's your role at EngageFI?

James White (03:44.073)
Yeah, absolutely. So I'm a principal strategist at EngageFI. I've been in the financial services industry for almost 30 years. And really my career has been built at the crossroads of banking technology and strategy. So I spent a lot of time at Open Solutions, really getting my arms around the technology, as well as Radin with regards to strategy and ultimately Fiserv. And then I spent a few years at a CRM organization by the name of Total Expert.

Here at EngageFI, I'm helping banks and credit unions rethink how they use CRM and AI. And to be clear, I don't see CRM as a product. It's really an ecosystem. It's connecting marketing, sales, lending, and service around clean data and smarter engagement.

Virginia Heyburn (04:32.137)
James, I have to ask you this because in our conversations I've realized that you can really talk shop talk strategy about almost anything related to the intersection of technology and financial services strategy. So tell me, you you have this expertise across the board. Why CRM? Why AI? And why now?

James White (04:52.7)
Yes, so CRM and AI both, especially CRM has been around for a long time, but it's really a buzzword. And both AI and CRM are the same in regards to according to who you talk to, it means different things. And so right now it's become so important and it has actually been for a couple of years, but really so important to be able to interact with our members and customers.

in a unified way, in an intelligent way. And CRM and AI really pull together as the ecosystem, you know, that'll organize your data and the intelligence to make it smarter. So we want to build a relationship banking organization. And to do that, we've got to leverage a balance between technology and human. So the best way to do that is with CRM and AI.

Virginia Heyburn (05:45.152)
Yes, and clearly you have a passion for this topic of CRM and AI, but I want to get to CRM first because I've been in this industry for 30 years. You've been around for a long time. Any of us that are listening that have been around for any length of time, know CRM pops up in the 90s. Everybody gets excited about it. And then some of the implementations and strategies crash in the rocks of reality. What makes CRM and financial services

so fundamentally different today than it was 30 years ago.

James White (06:17.8)
Yeah, and that's a great question. So in the 90s, the CRM was basically just a digital Rolodex and a sales and accountability tool. And that's really what a lot of our team members at financial institutions still think of it as. But today we want to fast forward and it's really an ecosystem. It's not just sales, it's marketing automation, it's incentive tracking, it's onboarding, servicing workflow, analytics, all tied together. So modern CRM isn't about reporting.

It's about what happened yesterday and it's about predicting what's going to happen tomorrow.

Virginia Heyburn (06:52.031)
And so for any financial services executive thinking about a CRM strategy, needing to update their CRM strategy if they do in fact have one in place, what's the risk of not investing if they decide, well, this is just bigger than a bread box, there's not much I really wanna do right now, what's the risk of them not moving forward with CRM?

James White (07:14.888)
Well, the risk is really huge and it's not as much about, let's just say an enterprise-wide CRM because that can become a little bit overwhelming, especially when you're trying to drive adoption and ROI and really get the results out of the tool. But the Fintechs and especially Amazon have set customer expectations to where they expect you to interact with them and know what's going on and be educated.

And you've got to break down those silos within the organization and be able to communicate in an intelligent way to your customers or members because I call it Amazonification. Amazon has changed the way consumers think. They want you to know about them and also make it as easy and effortless as possible. And so we've got to stay up with the times. Otherwise, we're going to be left behind.

Virginia Heyburn (08:10.829)
Amazonification, I like that word. We have that at my house. It's called lots and lots of cardboard boxes every day, stocked on my porch. it's different things to different people, right? So CRM, we've talked about that and thank you for clarifying how different CRM is today. I think that's so important to understand as we begin to talk about AI, begin to invest in AI, what role is artificial intelligence playing in

James White (08:21.149)
this.

Virginia Heyburn (08:37.815)
transforming CRM from this static system of record into something that's more dynamic, that brings efficiencies to the organization and of course is highly customer-centric.

James White (08:49.266)
Yes, so CRM without AI is just another data silo. So first off, AI can help you clean up the data noise. So if you think about Core as your system of record, there are other systems of record within the organization, whether it be, let's just say mortgage or commercial lending, which live in the LOS. You've got to be able to take all of that data together, normalize it and connect it.

And a tax ID is not in all of those systems, especially for lead information as an example. And so being able to allow AI to normalize your home address and your names, my name is James, it's a great example, being able to connect Jim, Jimmy and James and all knowing that they're all me and one's not my son as an example, being able to do those things that allows your CRM to become more of a system of action. But then AI on the next level,

will take it from being a static database to servicing next best offers or next best action. You can do propensity scoring and help you to understand where that customer member is in their life and what that next big financial decision is that they're going to make so that you can be there to support them. I would argue that if you're a community bank or a credit union, it's your responsibility to keep your customers and members financially healthy.

And if you believe in your products and services, then you're not selling them anything. You're helping that customer.

Virginia Heyburn (10:17.911)
Yes, I love that because really what we're talking about is moving from being a transaction-oriented financial institution to being a sales-oriented, service-oriented financial institution. And that's going to require a whole new set of technologies that didn't exist even 10 years ago.

James White (10:36.456)
And I agree completely in the younger demographics are expecting it because it is important to them that they can trust whoever is on the other side of the table and that you're giving them solid recommendations. So I know we've tried to stay away from that whole sales concept and we tried to sell through service, but service isn't enough. Service is actually becoming more of a commodity.

Virginia Heyburn (11:01.975)
Yes, customers and members today, want to be offered solutions. They're desperate for solutions when it comes to financial advice, when it comes to being able to manage their financial lives better, and as a result of that, lower their financial anxiety.

James White (11:17.512)
Absolutely.

Virginia Heyburn (11:19.403)
Now, this all sounds easy when we talk about it in podcast, but would you agree that CRM and AI and achieving that intersection and the stitching, I mean, that just is a, that can be a project. That can be a project in a map.

James White (11:32.868)
for sure. Well, and it's way more complicated than it sounds. I gave a couple of examples just a moment ago, trying to normalize and understand all of those data points and being able to connect it into an ecosystem. But not just that, if you look at the business processes and the use cases required for your true sales team members, like commercial lending or mortgage versus your retail banking.

employees. And so it is just such a big difference. And so you've got to be able to understand how to put those things together, especially when you want to drive adoption, because there's a lot of institutions out there that have a CRM. And if you talk to them, they're going to have really strong adoption in one department, but not others. And that's because when they were designing that use case and customizing the system, they were focused on one need and the others just don't see the value in the platform.

Virginia Heyburn (12:28.909)
It's not just that it's a big project, it's also that AI is moving so fast. So I have a couple of questions around this rapid pace of evolution and development in artificial intelligence, which can be confusing, particularly for smaller institutions that just don't have the budget to hire the experts in-house. They're relying on their vendors to give them good counsel. So there's confusion. There's confusion, for example, around the different types of AI.

And that's a real barrier to action. No institution is gonna move forward if they don't fully understand what it is that they're investing in, why it matters, and what the use cases are. So to your point about buzzwords, it's buzzword bingo time. We talk about gen AI, and that's becoming a more familiar term. And now there's a lot of talk around agentic AI. Can you just cut through some of the confusion and explain to us the distinction between the two?

James White (13:24.12)
I can, and obviously someone in marketing didn't help create those names because they're so close together that it is very difficult to break it apart. Gen.ai or Genitive.ai is really what we all know today. That's your chat GPTs of the world. And it's really more focused on helping you communicate. So whether that's generating content like emails or call notes or marketing campaigns, things like that.

A Gentic AI really should be called Action AI or some better word than that. So, Gentic AI does not just create, acts. So, think of AI that identifies a suspicious transaction and routes it to your fraud workflow automatically. Or for a financial institution, the distinctive really matters because Gen AI is really just fueling communication and a Gentic AI fuels operations.

Virginia Heyburn (14:22.049)
And that's where a lot of the efficiencies really come into play. Is that right, James?

James White (14:26.2)
It is. so one of the things that is important to think about, and you mentioned vendors, vendors, just about all of them now have AI on their marketing slick. They feel like they need to be able to check the box because it's everywhere you read is talking about AI and the level of AI in a particular platform. A lot of times has to do with their strategic focus, their investment dollars, you know, things like that. so

it's really important to understand what that vendor has done from a compliance perspective, but also how they're leveraging the AI models because if you're going to feed data to them, you need to make sure that it's the right data, it's the clean data, it's compliant data, all those types of things. So it's much easier to dabble in generative AI versus agentic AI because with agentic AI, you're really going to have to start creating some of these models and building them.

Virginia Heyburn (15:23.169)
You had mentioned fraud as an example where use cases could become obvious in financial services. What are some other areas where agentic AI can bring some meaningful benefit to financial institutions, particularly community financial institutions, banks and credit unions?

James White (15:40.562)
Yeah, so since we're talking about CRM, let's talk about just some use cases within the CRM ecosystem. So, agentic AI powers the backend. It could be automating referrals, routing leads, triggering compliance alerts and approvals, closing the loop on incentive tracking, being able to identify a specific transaction and getting it into the appropriate approval workflows. With Gen.ai,

On the front end, it's more about drafting personalized follow-ups, summarizing conversations into CRM records, tailoring marketing campaigns. So Agendic AI keeps the system moving. GEN AI makes the conversations better.

Virginia Heyburn (16:23.479)
Yeah, and that's a great way to explain it. I feel like that's very, very clear for our listeners. Getting back to the speed of AI, another question popped into my mind, and that is for a community financial institution, you know this, James. There's this wariness to invest in a technology that could be rendered obsolete within a short period of time. You think about a few years ago, machine learning, robotic process automation. Now we're talking about AI. AI is evolving.

There are newer and better capabilities all the time. What do you say to a community financial institution that's worried about investing because maybe in 12 months time that investment goes out the window? Because something new will come along.

James White (17:03.272)
That's a great concern. And it really comes down to the vendors that you're leveraging is super important if you're going to leverage a vendor for those tools, because it needs to an innovation strategy needs to be there for that particular vendor so that you can ensure that they are going to evolve with the updated tools. If you're buying a platform that is just connecting to chat GPT, there's value in that.

but they're not going to continue more than likely to evolve as the technology evolves. So it's very, very important that when you're selecting these vendors or if you're building agents internally that you're keeping that in mind because you're very right. It could become very obsolete very fast.

Virginia Heyburn (17:50.23)
Yes, so the investments need to be smart, but then also we have to keep an eye on results. What are we looking to accomplish with these investments? And I want to dig into that a little bit, James. What tangible results are the financial institutions that you've been talking to beginning to see from AI-powered CRM? Is it efficiency? Is it revenue growth? Is it customer satisfaction? Can you give us an idea of what you're hearing back from the market?

James White (18:17.596)
Yes, from a CRM perspective, it's about revenue growth. There are a lot of AI powered CRMs or CRM ecosystems. Let's just say it that way, because there's not necessarily a vendor that's just providing exactly what you need. we're seeing some credit unions using AI platforms that are getting 70 % more applications with the same team, cutting loan approval times in half.

predictive analytics tied to CRM lowering operational costs by double digits. So when the data flows cleanly, satisfaction jumps. And because every interaction feels more personal and timely, there's a real ROI. But to your point, there are a lot of articles out there right now where there's a lot of institutions have implemented AI and they just haven't gotten that real ROI.

Virginia Heyburn (19:13.483)
And it really is a pain point that is not necessarily new that we're solving for. mean, for as long as I've been in the bank technology business, we've talked about how challenging some of the back office processes are, how flawed the data is, and as a result of that, so it's very difficult to build operational models that are customer and member-centric and lead to high levels of customer satisfaction. So when I think of this innovation,

This is long overdue that we see some of these benefits. But now you add onto that this generational shift. You mentioned it before. We have the next generation. They want hyper personalization. They want these really clean, wow experiences. And that's going to require significant investments for financial institutions. Do you see artificial intelligence as an enabler of human relationship managers or?

as a replacement for certain aspects of the customer journey.

James White (20:14.608)
it's absolutely an enabler versus a replacement. So it's football season. I love football season. So I'll use an analogy. So if the CRM is the playbook, AI is the coordinator calling the plays. So people are still going to be the players that you trust. The ecosystem only works to allow them to have to show up in a better state, more educated and be able to deliver. So

you're no longer going to be required to ensure that your team member has a tremendous amount of experience in every area across the bank or credit union because they can get the answers that are needed very quickly. But people are still going to be required to bring the empathy to be able to build the relationship. So it really is making sure that you understand that it is going to be an enabler, not a replacement.

Virginia Heyburn (21:11.073)
And I think it's also an important point that we've been doing hyper-personalized banking for a good long time in our industry, but it's really been reserved for maybe that top 1%. And now there's the possibility through AI, through this automation, to offer highly personalized experiences to virtually every customer member, having the banker, the personalized banker in your pocket on your mobile device.

James White (21:34.994)
For sure. Well, and we always use seasonality and segmentation, you know, in the past and the one-to-one, the ability to do one-to-one marketing and be able to leverage AI and CRM to deliver that personalized message is incredibly important. But you also still want to be able to use seasonality and segmentation when you're really pushing product versus marketing to an individual.

Virginia Heyburn (22:00.253)
Let me bring another trend into this discussion and get your perspective on how CRM and AI really factor into what's happening. That's consolidation, right? We talk about the future landscape of financial services. We expect to see major consolidation. And in part, that's driven by a need for scale. It's driven by the innovation race. How can AI-driven and CRM-driven banks and credit unions, particularly the smaller of those,

How can they future-proof themselves against this disruption, both from fintechs, from larger FIs that are re-imagining financial services?

James White (22:37.97)
So that's a great question. So the future belongs to the institutions that think ecosystem and not product. Banks and credit unions that treat CRM as a product will struggle. Those that build CRM as an ecosystem powered by AI will be able to compete with many players that are many times their size. And that's because ecosystems scale. They integrate data, eliminate silos, give leadership visibility so that they can manage to it.

and then be able to focus truly on that customer member journey. And so in an innovation race, you know, where scale matters, an AI powered CRM ecosystem is one of the best ways to future proof because you can't cut your way to high performance. One of my peers has said that for 20 years. It's about generating more revenue for every dollar you spend and having technology to be able to support.

your team members and be more personalized is going to drive growth at a very low cost point.

Virginia Heyburn (23:41.25)
Yeah, you said something really important that strikes me as essential for any smaller financial institution. Looking for scale, this big search for scale that we've seen over the past couple of years that we expect to see continue, it's not just going to come from mergers and acquisitions, it's going to come from being a whole lot more intelligent about how we invest in technology. You said it, ecosystems scale. So then a smaller institution can compete with a larger institution.

and thrive.

James White (24:12.84)
Absolutely. being able to gain more share of wallet is something that an institution has been trying to do since the 90s. But now we have a much better opportunity to do that because consumers are purchasing financial services elsewhere. And so how do you become that institution that they trust, that true PFI, and be able to get more of that share of wallet? And it's through

being there in times that matter to support them and offering them the products and services that they need at that time versus just trying to push product.

Virginia Heyburn (24:50.881)
You said trust, James, and that sort of sparks a thought. There are risks associated with investing in AI, adopting this modern CRM that you're describing. How can banks and credit unions manage that risk? And I'm specifically wanting to explore the issue of trust since you brought it up.

James White (25:10.268)
No, absolutely. So when you are rolling out new technology, especially something as advanced as AI, then you've got trust both on your member or customer side and on your employee side. And so if members think AI is making decisions that they can't understand, trust is going to erode. That's why we want to frame CRM as an ecosystem, because done wrong, it'll definitely fragment the organization.

But done right, it helps you to build trust because the data is cleaner, the workflows are simpler, the conversations are smarter. But the risk is real, but there's so much upside.

Virginia Heyburn (25:49.934)
Absolutely, so looking into the future, if you could take out your crystal ball, the big question, right, I'm gonna ask you to look five years ahead, 2030, financial services. What's the gold standard for AI-powered CRM in financial services by then?

James White (26:06.12)
Well, first, by you saying, look, five years ahead, it'd be in 2030. That makes me feel very old. So first off, but it won't be a, gold standard won't be a single CRM product. It'll be a powered ecosystem where every system talks to each other. Every employee has real-time guidance. Every member interaction feels personalized. The CRM won't just log the activity. It'll predict the needs, orchestrate engagement.

help people do their jobs better. Leaders who want to get there five years from now, they'll have to focus on it now. Making sure that the data's readiness, the data is clean, which is something that leaders hear all the time, no matter what platform it is, it's still gonna be garbage in, garbage out. Managing the change management process and the culture change, because it's gonna be a massive culture change. Phase the adoption over time. So the technology will be ready.

But the question really is, the culture and the organization?

Virginia Heyburn (27:09.281)
the challenge of leadership in the next five years, right?

James White (27:12.367)
Absolutely.

Virginia Heyburn (27:13.869)
This has been really inspiring, James. I've learned so much from talking to you over the last 30 minutes. I can't thank you enough for coming on here and shedding some light on this really important topic.

James White (27:26.044)
Well, thank you very much. I really enjoy these kinds of conversations. When I'm at home trying to have them with my wife, she just looks at me like I'm crazy. So I love having these kinds of conversations. So if there's anybody that's out there that's watching this, please feel free to reach out. I'd love to bounce ideas and just learn as much as I can and share what I know as well.

Virginia Heyburn (27:46.935)
That's wonderful. Thank you, James. So to our listeners, this has been a really important and insightful conversation. And I'm so grateful that you did join us for today's episode. I think the takeaway is clear. We heard James say it a few times that CRM is an ecosystem. It's not a product. It's no longer just about managing customer data. It's about building smarter, more adaptive, more human-centered relationships powered by

James White (27:49.541)
Thank you.

Virginia Heyburn (28:16.449)
great clean data and artificial intelligence. So I want to thank you, the listener, for choosing EngageFI as your source of information for banking technology services. If you, like us, are thinking about the future of our industry, please be sure to look out for the next episode of FinTech Unleashed by following EngageFI on LinkedIn. You can find James White there as well. Thanks for listening in, and we'll see you next time.