What is Broker CRM: What is and How it Works

CRM is in plain words a relationship system. The goal is to store records about customers and all interactions with them with an aim to establish relationships, generate records about leads and make actions to transform it to sales and delivery. CRM gives capabilities to track all stages of customer relationship and activities.  

Brokerage CRM system is an organizational tool to set up and track sales activity and brokerage resources managed by back office and needed for customer success and delivery of product or service to the client as an execution of sale.

Brokerage CRM – tool for efficient storage of sales data and facility for communications between Front and Back office to deliver promised results to Customers in the most efficient way. That leads to continuous Customer satisfaction and retention.

Why are brokerage organizations structured for Front and Back offices?

Income is an aim of activity for every merchant organization established with business purpose. Profit target is achieved by managing eligible resources and directing them into useful activity by managing processes, people, informational systems and data premises and sources. 

Management is a form or activity to set goals, organize process flow and execute given business strategy with an aim to benefit from the action. Direction results in term of profit or achieved expected impact on process within organization. That is a kind of rational activity for business and needs smooth execution of the strategy and tactics within a given structure.

Management process within brokerage organization:

• Planning – establishing of strategic or tactical goals to be achieved. Goals should be measurable to track performance and confirm achievement or not achievement
• Organization – setting of structure, resources, and limitations to the team to be capable of reaching planned results.
• Execution – completion of task or set of tasks to be accomplished to reach strategic or interim goal of organization.
• Controls – set of limitations within organizations, feedback and managing efforts to reach organization goals.

Organization is a group of people with an established structure to drive business outcomes in a smooth and organized way to achieve its goals and profit for business. Organization needs structure to communicate and achieve efficient controls and feedback loops within people. 

Organizational structure can be: Functional, Divisional, Matrix structure, Team, Network, Hierarchical, Flat, Misc.

More than 80% of all organizations are using hierarchical (linear) and functional structures. That makes processes of decision making more transparent and risks more manageable. Less strict structures are focused on creative (agile) work but consider more fragility to external factors but rewarding in new product ideas generation. 

What is Front office and Back office approach within organization structure?

In the financial industry for the sake of transparency and managing risks, the structure of brokerage organizations is typically divided on Front office, Middle office and Back office headcount and infrastructure. That means that this approach applies to organizational structures of most stock, FOREX, CFD and binary options brokers, dealers and clearing members both for based operations on exchange/ecn venues or OTC.

Front office – customer faced employees and infrastructure. Front office mainly deals with sales and trading and is a part of organization structure that comes in contact with clients to attract customers. Mostly activity comes from marketing, sales and shared services departments.

Middle office – information technology, customer support and risk management.

Back office – administrative, customer care and payment services. That is the place where work is done to support front office operations. Back office is the set of resources which are allocated for creating a product or service and are not observed directly by customers during delivery period.

Communication is very important in every organization and in financial organizations it makes efficient cooperation in front and back offices and establishes at all these stages a manageable process that is the proper way to achieve expected results. 

Structure of financial organization is connected by communication, information exchange and meaningful interaction of participants. Direction is executed by direct command data and feedback that collects information about the result of previous actions.

What is a Brokerage Back office?

Brokerage Back office is a single module which collects data streams from sales related API and stores data in form of documents or data records.

When does the history of division of financial organizations to Front and Back offices begin?

Back offices first occurred in the 19th century within gold and securities traders to facilitate efficient bookkeeping and position management for contracts with outstanding exposure to defined maturity in future. Next it was framed to back office either to correspond to individual customer credentials for proper bookkeeping and in middle stays teletype and phone communications later changed by informational technologies and risk management tools. Most communication on exchange platforms runs in given protocols as FIX/FAST, which is not required for OTC instruments like CFD, binary options, derivatives within clearing or single institution bank desks where buyer and seller execute trade within one same institution. 

How Broker CRM operates data?

CRM stores brokerage data mostly in nonverbal, visual and quantitative form which makes the team capable of taking fast and informed decisions and reduce informational asymmetry in your brokerage organization. That is why a CRM system is very important for brokerage success. CRM is an integral part of each and every Brokerage Back Office. CRM makes Brokerage operations efficient and supportive to customers for reaching their goals and offer infrastructure and resources for sold product or service to be efficiently delivered to the client with maximum customer satisfaction and reaching business objectives to be profitable and recognized for better execution.

Why is the Broker CRM system so important for communications between Front and Back offices of a brokerage?

Communication is based on both internal and external information and is used to have efficient decision making for reducing risks of non-performance and increasing efficiency of internal feedback loop. Efficient communication is based on lower information asymmetry meaning fast and efficient exchange of information between organization members.

Communication goes in forms of verbal, nonverbal, visual and written data exchange. You can improve communications within your brokerage organization with use of CRM systems to track sales activity and store at back office records. Sales team communicates mostly in verbal form with customers and records data to CRM to proceed to dealing with customers.

What are key features of the Broker CRM system?

• Stores customer profile
• Stores customer KYC data
• Records for activity and lead generation
• Tracks history of customer interactions and purchases
• Sophisticated analytical and reporting tool
• Marketing and sales tool for team collaboration
• Reduces costs for back office maintenance
• Significantly improves internal communication and information exchange on formal and informal levels

What are core benefits of using the Broker CRM system in the Back office?

• Unified customer profiling
• Customer identification in accordance to compliance rules
• Increasing sales team productivity
• Building better customer relations and retention
• Reporting and analytics
• Team collaboration
• Efficient communications within your brokerage will arrive as result of successful CRM system implementation:
• Fast exchange of information important for business development
• Improved client relations
• Fast internal feedback loop for decision making
• Fast external communication
• Mitigation of conflicts for lack of access to information
• Increased employee engagement
• Improved productivity
• Makes more healthy workspace culture
• Efficient direction of employees
• Increased job satisfaction
• Innovation and ideas exchange
• Team building

Brokerage CRM system is the venue Back office communicates with Front office to achieve goal for customer satisfaction and retention. Front office of Brokerage is selling product offering and records activity in CRM. CRM system is used by the brokerage Back office team as a resource for continuous customer support and sold product delivery. Front office of brokerage promotes and sells product and Back office organizes continuous delivery and quality of service. Successful delivery of brokerage service by Back office establishes connection with customers that is ground for retention and basis for additional inbound sales.

What parts of the CRM system are used for Brokerage Front office activity?

• Sales module
• Reporting module
• Communication tools
• Marketing tools

CRM systems usually include or integrate or co-locate contact center capabilities which benefit to brokerage with:

• Improved efficiency and productivity
• Personalized customer experience
• Streamlined support
• Improved personnel performance

Contact center components used for CRM and are integrated with Back office records:

• VoIp – voice over internet
• CTI – computer telephony integrations
• Call queuing – inbound calls with customer
• ACD – automatic call distribution in accordance to skill or priority based routing
• IVR – interactive voice response
• Call recordings – better quality assurance
• Data analytics – KPI measuring
• CRM integration – gateway is must
• CPD integration – customer data platform storage
• Chats – support agent direct communication
• ChatBots – AI-powered program

What components of the CRM system are mission critical for brokerage Back office?

Key functional element of the Brokerage CRM system is to store KYC (know your customer) data as a core element of the compliance framework within the organization.

Knowing your customer activity is a set of actions to identify and verify customers and store this data in the reliable storage which is a typical part of a CRM system connected with Back office data premises. KYC activity is a requirement by regulators within the acting law framework in the location where brokerage operates. KYC standards are established by international organizations and sometimes with the help of non-profit legal advice teams acting in favor of the local government or central bank.

Key component of KYC is the customer identification program which is based on receiving from customer key documents to prove his identity and can use automatic tools and third party specialized APIs. KYC procedures held by back office employees and outcomes are recorded in the CRM system as a part of customer profile or if necessary in proprietary software if institution requests due to special vision or shareholder strategy. Proprietary or in-house CRM software will be extraordinarily expensive to build and used only in special, very specific cases who need special security or domain specific tools.

Key components of the KYC/AML procedures of Broker CRM according to Thomson Reuters:

• Customer identification program (CIP)
• Customer due diligence
• Enhanced due diligence
• Continuous monitoring
• Reporting and compliance

Enhanced due diligence can be required only in event of when:

• Individual comes from sanctioned nations
• Own a shell companies
• Unusual transaction patterns
• Have questionable financial history
• Associated with people or businesses known to be involved or suspect to illegal activity
• Have penalties or non-compliant transactions history
• Have unpaid debts or liens

What are the main benefits of using Brokerage CRM as a part of your integrated trading office?

Using of Brokerage CRM as a part of your Back office tool kit in general and absolute will lead to beneficial changes in your team and customer relationships:

• Active exchange of ideas
• Transparency of business outcomes
• Efficient feedback loop
• Clear and concise tasks
• Data flow is consistent and scheduled
• Costs reduction

CRM system makes brokerage Back office to align with incoming customer requests to fulfill information symmetry with Front office with operations in the same efficient data flow. That makes communication with customers efficient and supports instant product delivery. Broker CRM provides rapid feedback for all business processes focused on delivery of product to the customer by continuous improvements and knowledge of user experience which brings brokerage customer retention at lower costs.