Making Bank

Posted: 1/2004

Making Bank
Cashing in on the financial services industry
By Tara Seals

As markets go, the financial vertical has a lot to offer a communications salesperson. Besides a deep technological need for ever-evolving solutions and applications, banking and financial firms require professional and consulting services, often have multiple locations and tend to be very loyal. And sales organizations are cashing in with a tailored approach to meeting their needs.

In general, industry-based target markets offer good opportunities for salespeople willing to hone their expertise in a certain field, says IT sales consultant Andrew Neitlich. In a telephone survey of 50 communications professionals he discovered a trend: Companies that focus narrowly on their market make more money than those that stay broad and diverse. Focusing allows salespeople to reduce marketing expenses, develop whole solution sales and build a reputation as market specialists, which can be of great use in gaining referrals.

The most lucrative IT professionals have established a narrow focus and are intent on serving a specific target market, says Neitlich. They also go out of their way to dominate that market by establishing trust, relationships and credibility. Less successful firms are less focused and offer diverse services and features. They also tend to seek quick, transactional sales.

The financial market is no exception: Customer service and relationship-building is critical. In the financial industry, they want everything right away and you have to be responsive, explains Michael Bottalico, head of Qwest Communications International Inc. dealer Telecom Network Solutions Inc. We pitch consistent and reliable support over the long term and providing all that value on-site. They dont have the time to look at a monthly or quarterly bill review, they dont have time to look at their invoices or call the sales team. Sometimes we even have voice mail or e-mail accounts on the larger accounts, and were part of their network infrastructure. Its grunt work, but just by being on-site you get business.

As a value-added service, Telecom Network offers regular network inventories, order entry, verification and tracking, and it sends all order notifications proactively. Similarly, Cindy Ried, a consultant with Evolving Solution, sells financial institutions on the basis of being a one-stop shop for support. I offer every major local carrier out there, so what I do is ask them how theyre getting orders today  do they have to call the LECs and order the phone lines and T1s and rely on their local rep from each carrier? she says. Most often [the answer is] yes, and most often they say its cumbersome, very hard to get to the right person with the information. They need someone who knows the special packages and the features for each of the areas, and 1-800- Verizon isnt going to offer that up.

Expertise also is key in winning these accounts. Steve Gareleck, president of PartnerTEL Inc., says the deals are knowledge-based solution selling, without exception. Most of the agents in the markets dont really understand that, and they dont understand what their customers need, so they need training, he says. Its worth spending the money to hire guys who have 10 or 15 years in the financial services industry  that was our approach, and now were closing these deals. Before, we werent.

Part of that expertise lies in understanding underlying business needs. PartnerTEL has developed platforms to give financial services companies a telecom manager to manage their infrastructure and telephony. These are tool sets for customers that differentiate us when were competing for that business with an RFP, says Gareleck. You have to give them a lot of value these days; theyre much more cost-conscious.

Analyst firm In-Stat/MDR reports banks demand faster, more reliable, more secure access to internal and external information. Also, rigid service-level requirements and network availability are crucial to banking needs, particularly when it comes to security. However, this industry is very focused on total cost of operation and demands a proven return on investment, partially due to the tremendous pressure on capital and operating expenses, says Amy Cravens, a senior analyst with In-Stat/MDR. While financial institutions are working toward better communication networks, this goal is being pursued in an extremely cost-sensitive light. Because of the impact on banks and trading firms from the economic downturn, their approach to technology spending has changed.

These financial institutions want to do more with less, and any vendor that can help them do that, they want to talk to, says Jim Leach, vice president of marketing at SAVVIS Communications Inc. There are two parts. If theres a vendor out there that can help with generating revenue, growing the top line and doing more, then great. Or if they can help banks run their businesses in the same way and save 20 percent, then thats great too.

Solutions that bolster customer service, such as database integration, unified messaging, interactive voice response systems or contact centers are hot tickets. Managing customer interactions well translates into additional revenue for banks, explains John Gaillard, vice president of sales and business development for value-added distributor Catalyst Telecom. Financial services organizations are trying to expand their customer relationships, so instead of doing business with a customer around one type of product  say, checking, investments or trust funds  you want to do business on all your products.

Thus, a bank wants the customer to use its services any way that he or she wishes and to be able to have access to information seamlessly, whether via self-service on an ATM, walking into a branch office or online banking.

Theyre looking at how to integrate technology to help them engage a better customer relationship and be able to build on that, says Anthony Daley, senior vice president and general manager for the Americas at value-added distributor Westcon Group North America Inc. If I call into the branch to talk about my loan, the person knows they have access to information anywhere. So even if I dont reach a loan officer, the person Im talking to could still pull up those records and at least give me the information on where I stand on the loan.

For instance, Cisco Systems Inc. has launched its Branch Bank of the Future initiative, designed to address the fact that while customers have adopted Internet banking systems, they still express a need and desire for the traditional bank branch. Most importantly, retail customers now expect to have all the information and features they have begun to be comfortable with through the Internet banking channel to be available at the bank branch. Retail banks are faced with updating the branches; Cisco says converging voice, video and data allows retail banks to integrate and deliver diverse customer information. Ciscos tailored solutions include IP telephony, customer care, IP ATMs and kiosks, content delivery networks, video surveillance, wireless LANs and customer service applications.

Banks also focus on maintaining viability in a crowded market. A small bank wants to look like a big bank, thats very important, explains Gaillard.Theres almost more of an opportunity in local community banks, because their customers are looking at the technology trends that are happening with the larger banks and they want the same thing  ATM, online bill pay, access to bank accounts around the world. Whether its telephony, data networking, databasing, VPNs, secured access, there are sales opportunities around that, because the small to midsize banks understand they have to offer the same services, in the same manner, that the larger banks do if theyre going to compete long-term.

Efficiency is another byword for financial services firms, and outsourced services can fit the need. SAVVIS, which counts Morgan Stanley and the NASDAQ as clients, offers a carrier-neutral, private, core communications infrastructure that financial institutions use to run their applications and to access a portfolio of voice and data services. For instance, where a banks legacy networks might not support the latest contact center solution, it can sign on with SAVVIS to use its network to support and deliver the application at a fraction of the cost of upgrading the banks entire backbone.

The key concept is that the customer plugs into the SAVVIS infrastructure and all of the network, hosting and data services are available to them, says Leach. Its hard for traditional IT folks to grasp that because theyre used to going out and buying their own computers and storage devices and routers and network circuits and engineers and putting that all together themselves. Why not plug into SAVVIS for all those capabilities, and the financial institution can then focus in on what differentiates them in the marketplace, and thats usually the applications, customer- facing electronic banking, service-oriented call center, back-office like straight-through processing, or things responding to new legislation such as the Patriot Act or the Sarbanes-Oxley Act.

Gaillard says streamlining deployment and technology is another motivator for banks. Theyre considering standards compliance and the updating of older solutions to newer technologies, and there are ever-evolving B2B relationships, from payment systems integration and online bill paying, so how do you do that? he explains.

Connections between the institutions and banks themselves, as well as connections between information dealers such as Reuters and the stock exchanges and mutual funds brokers, are part of what differentiates the financial vertical from, say, the medical sector or retail.

The killer application in the financial services space is the community. If you approach and look at the business drivers and the challenges and opportunities in the financial services space, with that approach youre much more apt to close the deal, says Gareleck. If you look at the financial institution as a community, when youre talking to one institution, a lot depends on how they interact with other institutions, and quite often they want to communicate with each other over a private network, according to all the regulations its got to have a high level of security. In-Stat, incidentally, forecasts security solution shipments in the financial realm to grow healthily through 2007.

Bottom line, its a consultative sell, says Gaillard. We believe in solving a business need  thats where the CIOs and the CTOs are spending money. Today, technology needs to solve a business need or the banks are not going to spend the money on it.