Domain-specific CRM systems offer trust companies and family offices advantages vs. horizontal CRM options

So, you are a manager of a trust company or family office. You are considering a CRM system and sorting through the questions that will determine which system you buy and how you deploy it.  One of the first questions that will have to be addressed is what you are looking to get out of your CRM system—what functions will be driven by your CRM system?

Is there more to CRM than just marketing?

Your organization might be looking for a CRM system that just tracks information on prospects and helps manage sales and marketing. Your expectations are that other functions and info on clients and related parties are handled within your trust accounting system. Likely, you have other supporting systems, such as performance reporting, client portal/reporting, financial planning, rebalancing—which may or may not be tied into your trust accounting or portfolio accounting system.  Meanwhile, your documents are stored on a network drive, in a bank imaging system that does not meet your needs, or, heaven forbid, still in paper files.

In this case, you would probably be satisfied by any number of CRM systems that provide broad sales and marketing capabilities that can be applied easily across the full horizontal range of industries.

That approach may suit that select group of trust companies that are fully satisfied with their existing efficiency, scalability, and technology (and I doubt either of those two companies need to read any further) and are just looking for a little marketing help. For the rest of the fiduciary universe, however, this answer—choosing a broadly suited CRM primarily for marketing and sales—eliminates the important benefits that can be driven through a “deep vertical” CRM that is configured specifically for the operational requirements of trustees and family offices.

Horizontal CRMs don’t deliver full set of potential benefits

If that statement sounds overly bold, let’s look at the differences in implementation and benefits between using a horizontal CRM application vs. a “deep vertical” CRM application. A “horizontal” CRM would be an out-of-the-box installation of a system like Microsoft Dynamics, Salesforce, Zoho, ACT or most other well-known CRM brands. A horizontal CRM application can be easy—at least at first glance—to install and start using, but out of the box, it will not do much more than provide electronic Rolodex functions with pre-built sales and marketing tools (that are generally very good for that purpose).

What it won’t do is integrate with your trust accounting system or other trust technologies nor provide document management in a single interface. Neither will it use that customer information to automate business processes that are specific to your operations. The lack of those features creates a much higher risk that the actual utilization of that expensive CRM system will be low across the organization, a frequent issue with CRM implementations.

Deep-Vertical CRMs use domain-specific processes to drive efficiency, compliance, reporting, and customer success.

In contrast, a “deep vertical” CRM is designed by domain experts to address the business processes that are unique to an industry. It uses the CRM platform as a single “source of truth” for any information relating to your clients, (which alone creates tremendous efficiency gains in trust administration), then leverages that consolidated information base to support automated workflows and processes that are specific to the industry’s daily work demands—in your case, the repetitive tasks performed by trust officers and administrators.

These scripted processes in the CRM should eliminate paper; enforce organizational protocols; streamline the review and approval of new accounts, distributions, reviews; and improve compliance and regulatory record-keeping while enhancing customer service and allowing trust officers to spend more time with clients and prospective clients instead of doing clerical work.

Couldn’t I just build my own workflows using a horizontal CRM?

If you have a large IT staff or budget, you could conceivably choose a horizontal CRM, build all the data integrations yourself or with a consultant, and then create workflows and approval processes that mimic your existing business processes. However, in addition to the direct expense involved, this requires a person or team to spend time designing the look, feel, and functionality of these features and then reviewing and testing them. Additionally, the individuals involved will probably have to be fairly senior as they must have a broad enough understanding of the business to articulate those needs to developers that don’t know anything about trust or family office operations. This management time and headache can be more expensive than the direct dollars spent on the project. It will also take quarters, if not years, to complete.

And it may not work as expected, or at all, when it is completed. Each process, and any related calculations, introduces the potential for error if not vetted through a rigorous quality assurance (QA) process, which most trust organizations do not have the time or skills to pursue.

A “deep vertical” CRM, on the other hand, will provide most of those same business processes as a default feature set, ideally in a set of templates that can be easily configured for the specific needs of your trust company or family office, using processes and calculations that have undergone a QA process and been exposed to use in multiple organization to weed out gremlins and errors.  You should beware, however, of deep vertical CRM systems that force you into a narrow path of operations that cannot be configured for your particular organization, the most notable potential drawback to this approach.

Deep Vertical CRMs are enjoying explosive growth in a variety of industries

With a quicker time to deployment, less senior management time required, and lower overall costs compared to building it yourself with third-party consultants, it should not be surprising that there is growing demand for deep vertical CRMs. Some of the fastest growing companies in the CRM space are using deep vertical models, including nCino (banking), Veeva (pharma), Blackbaud (non-profit/education), Tour de Force (manufacturing), or Lexicata (legal), among others. Salesforce has recognized the strength of the trend by unveiling last year its Financial Services Cloud, while also helping start and investing in Vlocity, which is taking a vertical CRM approach to insurance, health care, public sector, and media.

“Within five years, vertical CRM will be the preferred CRM choice.”
– Kate Leggett, Forrester Research

According to Kate Leggett (a Forrester analyst who specializes in CRM and has done the most to examine  the deep vertical concept in CRM), industry-specific CRM adoption will continue to accelerate and “within five years, vertical CRM will be the preferred CRM choice.”

Trust and Family Offices especially well-suited for a deep vertical approach

This prediction seems especially likely for trust companies and family offices, which have business processes that are unique to the industry and data intensive, have numerous data integration needs, have customer information scattered around multiple systems that are not user friendly and don’t communicate, still rely heavily on paper output, and have not widely adapted CRM systems, in general.

About the Author
Jim Marks, CEO, WealthHub Solutions

Jim has spent nearly 30 years working in financial technology, as an entrepreneur, equity analyst and investment banker. He started the first Wall Street practice covering fin tech in 1996 with Credit Suisse and his extensive writings on the intersection of financial services and technology have been cited in a wide variety of publications in the US and abroad. WealthHub Solutions is the leading provider of enterprise software for fiduciary management. WealthHub’s cloud-based platform for trust company administration helps trust companies and family offices improve efficiency and enhance compliance and reporting through intelligent automation.

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