Cloud vs On-Premise: How to Choose CRM for Banking

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Cloud vs On-Premise: How to Choose CRM for Banking

The world is going digitized, and the value of data-driven decisions and processes, as well as personalization, makes business evolving. By now, each industry felt the pressure of growing demands to agile, high-quality service offering and financial sector isn’t an exception. As many businesses invested in the CRM systems and got the higher, more competitive positions, the financial organizations have no intention to fall by the wayside. However, the peculiarity of processes run by these companies are quite specific, so CRM for banking should facilitate the customer-facing, data management and create brand value and identity.

Revealing the Value of CRM for Banking

Lots of companies stay competitive due to high levels of customer loyalty which their nurture by leveraging CRM for processes advancement, as well as exceeding clients’ expectations. For financial organizations, this aspect won’t work as it is nearly impossible to earn customer loyalty by running mortgage, loan, and other contractual processes. Moreover, people make use of services by more than one bank. Banking area faces the challenges during the flourishing of fast-growing technologies and customers’ requirements. To be more specific, these financial organizations have to deal with

  • strategy lock-up as long as from now on they don't merely do business with customers, they establish relationships with clients by handling their issues
  • expectations of targeted audience shifted and aimed for improved, personalized performance available round-the-clock
  • cumbersome back-office systems accomplish their tasks fairly. Thus they aren’t integrated with each other, so the lack of data transparency within the company complicates the speed and quality of service
  • regulation and compliance matters demand due diligence in preserving customer records privacy and excluding any violations or side impacts

The adoption of CRM technology isn’t a silver bullet, and there is no vendor that assures you that this initiative is a universal remedy for success. Apart from cost-saving and business agility, the implementation of CRM for banking brings along the following 3 benefits:

  1. Keeping track of evolving customer profiles for timely, relevant offers
  2. Driving all the interactions for a single view of customer profile
  3. Providing a proactive support and issue resolving

Coming up to a conclusion that CRM effective for the financial sector, we face another challenging choice - on-demand vs on-premise system. What kind of CRM will meet the demands of banking area is full scale?

Cloud vs On-premise: Which One Suits Financial Sector?

The crush of SaaS and on-premise CRM takes up the characteristics of the eternal debate. Obviously, on-premise systems appeared first and have more credibility in data security aspects than cloud solutions. However, this consumption is dubious and has no basis as long as modern SaaS providers offer high-level encryption for keeping your data safe. To avoid holding empty talks, let’s look at advantages and shortcoming of on-premise and cloud CRM systems.


As you can, see the cloud CRM provides more elasticity and flexibility than the on-premise one. Besides, the financial sector benefits from cost reduction and pay-per-usage policy. The deployment of the SaaS is almost automatic and doesn’t require constant upgrades for extra fees as long as CRM vendors handle this process by themselves. Additionally, you don’t need highly professional IT team for a system running. So far the cloud CRM appears as a valuable and practical choice for banking.

Fixing Review of Cloud Models

The issue of data security bothers every business owner who considers cloud CRM implementation. Yet, you should have


that every CRM vendor has a vested interest in the security of your data. Besides, there are several different models of on-demand solutions. To succeed with the cloud CRM, financial organizations should choose the very model that will comply with business strategy and objectives.

Fix 1: Service Models

There are 4 types of service models:

  • BPaaS (Business Process-as-a-Service) combines all the service models abilities and, usually, used in billing, payroll or human resources.
  • SaaS (Software-as-a-Service) is a cloud provider that stores business software and data. It can be accessed via web browsers. This type deals with accounting, customer relationship management, enterprise resource planning, content management, invoicing and support service desk.
  • PaaS (Platform-as-a-Service) is a complete platform for various applications, interface, database storage, and development. It supplies development and maintenance of custom applications, reduces IT costs and needs inexpensive hardware.
  • IaaS (Infrastructure-as-a-Service) enables businesses to buy a fully outsourced service instead of buying software, data space or network equipment.

Fix 2: Deployment Types

Cloud deployment has 3 models:

  • Private cloud is operated only by a specific company. This solution can be managed by the company IT team, or by the third-party, as well as it may be deployed in on and off premise. It is the most secure of the cloud options.
  • Public cloud offers an infrastructure for general public or industry group. The owner of this cloud is the organization that provides these services.
  • Hybrid cloud is an infrastructure that consists of two or more clouds (private or cloud) that remain the unique options. The entities offered are linked for providing services.

Fix 3: Operating Models

In the choice of the cloud solution, you should take into account the operating model you are going to run. There exist at least 3 versions of cloud operating types.

  • Augmentation of employees. Financial organizations hire people with the required expertise from the service vendors. You can also hire additional outsource staff from the offshore. So you can work with the people with the right expertise.
  • Virtual captives provide a team or extra resources that help to deal with the cloud operations. This option is an alternative to a completely outsource model.
  • Outsourcing vendors use the offshore facilities and third-party staff to accomplish the cloud operations. This approach combines investments and resources for managing multiple banks.

Drawing Up A Line

The implementation of cloud CRM for banking industry delivers flexibility and agility of organization growth. With CRM, you will be able to define ROI, drive your resources into process performance instead of hardware and IT team investments, as well as reduce the costs of licenses and comply with the demands to data confidentiality. 

P.S. Want to figure out more about the process of CRM migration to the cloud? The ebook ‘Reasons to Migrate to the Cloud CRM’ will be helpful, besides you can download it free of charge.

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