Investment Banking

What to Look For in an Investment Banking CRM

Last Updated:
October 12, 2023

2020 proved that most financial services firms, including investment banks, could go entirely virtual and smoothly execute transactions by deploying the right technology.

To remain competitive, differentiate themselves from other practices, and retain talent, investment banks need to move away from antiquated processes and legacy tools, including their overreliance on Excel, contact management systems, and other traditional CRMs.

Who knows an executive at this company? When was the last time we followed up with this contact? Which team members have talked to which clients? What is X company’s latest valuation? Finding answers to these common questions with your Excel workflow or traditional CRM software can take hours, assuming all your data is accurate and up to date.

Today’s transactions are complex, and timely access to information enables bankers to identify the right buyers at the right time. A strong relationship network is crucial to finding potential buyers, accessing a consistent flow of promising opportunities, and executing transactions.

And yet, most firms are still relying on antiquated methods and technologies that are not ideal for keeping track of relationships and everyone at the firm aligned and on the same page.

Unfortunately, many of the investment bankers we have talked to have lost deals due to siloed data, lack of follow-up, and their teams not having access to up-to-date information.

Why Most CRMs Don’t Work for Investment Banks

Most well-known traditional customer relationship management providers, including Salesforce, Microsoft Dynamics, Hubspot, etc., have been designed for sales teams to manage linear transactional sales processes. These transactions involve moving a prospect buying a product or service down a linear sales funnel until they become customers (as the name implies). This process differs from the investment banking use case, where you focus on connecting buyers and sellers by leveraging your firm’s long-standing relationships.

Regardless of how new and advanced a traditional CRM is, its features are more akin to a contact management database than a deal management or deal collaboration tool. As a dealmaker, you need a CRM solution that not only stores data; you need a system that understands and is designed for your unique workflow and helps your team build relationships and drive deals forward.

Implementing a traditional CRM system not designed for deal makers will require your firm to spend additional time and resources on customization and training. Taking time out of your busy schedule to learn how to use a platform that will likely not add material value to your firm is not the best use of your time.

In this article, we will go over why investment banks should implement relationship intelligence CRM platforms to stay ahead of the competition by streamlining processes and focusing on building relationships.

What is a Relationship Intelligence (RI) CRM Platform?

Merely having a CRM does not necessarily make you a more efficient banker. Spending time manually entering data, looking through lists, searching for contacts, and relying on humans to log every interaction is inefficient, costing your firm hundreds of hours per year.

Relationship intelligence CRM platforms have been designed to optimize your workflow by helping build and nurture long-term relationships, automate manual tasks, and manage your deal pipeline from one system.

From building and maintaining a pipeline of potential clients to keeping track of meetings with executives and founders while keeping tabs on multiple deals simultaneously, your firm needs to have a system to ensure nothing falls through the cracks. This is where an investment banking CRM with relationship intelligence can set you apart.

No matter how diligent you and your team are at entering data into your current CRM or spreadsheet, you will not always have the most updated, complete picture of where your hundreds or thousands of relationships stand. As your firm grows and you build more relationships, it becomes harder to get the whole picture of your firm’s entire relationship networks.

Serving as your organization’s central source of truth, a relationship intelligence CRM houses all contact and deal activity under the same roof, enabling you to have a 360-degree view of all your relationships and the entire deal process without having to take the time to ask colleagues for information about a particular contact, company, or deal status.

Below we will go over the most important aspects of how a relationship intelligence CRM helps close more deals by streamlining the deal lifecycle at investment banking firms.

Automate Manual Processes and Spend Time Building Relationships

In theory, every touch point with a potential buyer and seller should be logged into the CRM, but the reality is that not every interaction finds its way into the system.

Logging activity on a traditional CRM requires someone to take the time to enter data manually; unfortunately, data entry is not a high-value activity, and at times, not all data finds its way into the system.

This can happen for various reasons, such as associates taking shortcuts, being unaware of the full context of the conversation, or making mistakes when entering data.

Not having the latest information in your CRM can result in the rest of the team not having access to the most up-to-date status of a deal or potential deal. Lacking the full context and understanding of the situation means that “balls might get dropped,” affecting the deal’s outcome.

High-performing investment banks rely on relationship intelligence CRMs to eliminate data entry and have the most up-to-date deal and contact information at their fingertips.

By connecting with your email and calendar systems, a RI CRM automatically enriches contact and company profiles from inbox and calendar data. With all the data automatically entered and enriched, your deal team will have visibility into the entire deal activity, shared notes, contact information, etc., giving any team member access to a wealth of institutional knowledge in seconds. Contrast this to spending hours trying to find information spread across multiple inboxes, other CRMs, spreadsheets, etc.

With people constantly changing positions and companies, staying on top of your network is no easy task. To ensure all data remains clean and up to date and avoid dealing with the frustration of emails bouncing back, relationship intelligence CRMs enrich and update your data with high-quality third-party sources. Your Managing Director will no longer complain about bounced emails or out-of-date phone numbers.

Quick access to all your network’s up-to-date contact information is essential for business development. Compared to other firms that struggle with deal flow and need to scramble to find buyers, having clean data can set you miles apart from other banks that still rely on an antiquated CRM system or spreadsheets.

By automating time-consuming tasks and having access to all your firm’s data in seconds, you can spend time building more relationships with potential buyers and sellers.

Streamline Your Deal Pipeline

Managing client relationships and multi-million dollar deals that can take 1-2 years to close with just your email and spreadsheet is not the best use of your team’s time. By now, you know that email and Excel spreadsheets are not the most intuitive collaboration tools when managing complex deals.

When looking for information about a particular transaction or the details about relationships with individuals involved in a deal, you will spend hours searching your inbox or going back and forth with colleagues. This is not how a high-performing investment bank should operate.

As the adage goes, time kills deals, so once you’ve won a mandate, you want a system that can manage all the various parts of a deal to ensure things move forward fast and minimize the odds of the deal falling apart.

Relationship intelligence CRMs automatically capture the entirety of a deal’s data flow, giving your team a birds-eye view of the status of every transaction in real-time and allowing you to foresee possible roadblocks.

A robust reporting feature with investment banking-specific templates allows you to create and share dashboards to report on the metrics that matter across every level of the organization.

Leverage the Power of Your Firm’s Network

With a relationship intelligence platform, you can see how strong your relationships are with your firm’s entire network. For example, suppose you are looking for a warm introduction to a prospective buyer. In that case, you can mine your team’s network in seconds to find who at your organization has a strong relationship with that individual and can make the introduction. Saving you hours of “detective work” and going back and forth with colleagues.

Staying top of mind with sponsors and deal flow sources can be difficult. To help you build stronger relationships, a relationship intelligence platform alerts you when people in your network have made investments, changed jobs, or other signals that help you stay abreast of your network. With this information, you can nurture your relationships, stay informed of new developments, and source new opportunities you would not have known about if it wasn’t for your relationships.

Getting Started With Relationship Intelligence

Implementing any traditional CRM will not take your firm to the next level. Instead, it will perpetuate outdated practices and cost your organization more than the value it will deliver.

4Degrees eliminates busywork by automatically capturing all your interactions by syncing with Microsoft Exchange and Gmail and enriching contact and company data. By serving as your firm’s single source of truth, 4Degrees ensures your whole team is always on the same page.

The platform’s relationship intelligence capabilities analyze the strength of your team’s relationship networks to surface warm introductions and identify the best path to prospective buyers or management teams.

Because at the end of the day, it’s all about who you know.

Please click here to schedule a personalized demo to learn more about how 4Degrees can positively impact your organization.

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