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CLM Vs CRM: Revolutionizing Client Engagement

In the financial services sector, understanding the distinction between Client Lifecycle Management (CLM) and Customer Relationship Management (CRM) is essential. Although they may seem similar, these two systems serve unique functions.

Financial firms are increasingly data-driven but remain cautious due to concerns about data integrity and security. A CLM approach integrated with CRM processes can address these concerns effectively. As this integration facilitates better decision-making, compliance, and client outreach, CRM and CLM integration also allows for faster Know Your Customer (KYC) and onboarding.

What’s a CRM? 

Traditionally, CRM served as an advanced filing system, predominantly used by sales and marketing teams. Its main objective was to organize customer data, streamline communication, and simplify the processes involved in building and nurturing relationships with clients. Thereby, fortifying business relationships to stimulate growth.

CRM's evolution

While CRM's foundations remain, its architecture has transformed, particularly within the intricate environment of the financial industry. Previously limited to sales and marketing applications, CRM now extends its capabilities to financial advisors, operations managers, and executives. This comprehensive approach serves as a vital tool for growth-oriented business strategies in the financial sector. Within the financial ecosystem, CRM extends beyond mere data collection and includes complex workflows and automation. 

Multi-faceted tool

CRM systems have matured to become far more than a hub for client data; they're now holistic platforms. These systems empower users to construct in-depth profiles of individual clients, trace transactional timelines, and customize outreach based on data-driven insights.

Relationships at the core

Even as functionalities expand, the essence of CRM remains relational. Features within CRM systems aim to facilitate synergistic interactions between companies and their clients. By focusing on meaningful, customized experiences, organizations stand a better chance of meeting the evolving expectations of their clients.

What is CLM?

When considering CLM within the financial industry, it's clear that the provision of products or services is merely the tip of the iceberg. As regulations tighten and customer expectations soar, institutions must adopt increasingly complex and analytical strategies. 

A nuanced framework

CLM serves as an exhaustive architecture that evaluates each stage of customer engagement with a financial institution. It extends beyond traditional CRM systems by offering meticulous analytics that detail each facet of the client's journey through the lifecycle.

Assessing critical metrics

CLM financial services don’t subscribe to a cookie-cutter model. They employ a clear methodology encompassing five pivotal stages of customer interactions:

  • Discovery: the initial stage of awareness, where companies strategically engage prospective clients through finely targeted and salient content.
  • Education: At this point, organizations serve as consultative figures, addressing inquiries and proposing solutions to client-specific challenges.
  • Purchase: The culmination of the exploratory and educational stages, with the customer finalizing their selection and executing the purchase.
  • Post-Purchase: This stage is crucial for feedback acquisition, enabling companies to evaluate their performance through client responses.
  • Advocacy: Satisfied clients actively promote the brand through a myriad of channels, such as social media and online reviews.

Fenergo solves CLM Challenges

Corporate and private banking grapple with unique operational complexities, predominantly in the realms of compliance and risk mitigation. Any tool that falls short in addressing these crucial factors is rendered largely ineffective. It's here that Fenergo's specialized CLM solution offers not just a mechanism to manage these challenges, but an option to elevate the entire client experience

What’s the Difference Between CRM vs CLM?

The two management systems contribute to essential organizational outcomes such as customer loyalty, relationship building, satisfaction, and recurring revenue streams. Yet, their scopes and capabilities are not identical.

CLM and CRM functions

CRM, although useful for its primary functions, often doesn't provide the rigorous compliance capabilities needed to navigate the multifaceted legal landscape that financial institutions must adhere to. One area where CLM excels, particularly for a financial advisor, lies in its advanced features tailored to comply with complex regulatory mandates such as Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines. 

CRM concentrates its efforts on fostering, observing, and nurturing customer relations. This often manifests in tools designed to manage customer engagement and track sales data. CLM takes a broader view, examining the customer's journey from first contact to loyalty and advocacy. Its objective is to refine each stage of this journey to enrich the client experience and build stronger relationships.

Balancing customer engagement and compliance

In the financial sector, achieving a balance between client engagement and compliance is a precarious act. CRM's core capabilities mainly involve managing interactions and sustaining relationships. 

However, for a financial institution, merely managing isn't enough. With its focus on the entire lifecycle of the customer, CLM not only enables businesses to keep a pulse on client relationships but also ensures that all actions and interactions are compliant with current regulations.

How CLM & CRM Benefit Each Other 

1. Increased efficiency

Financial institutions are increasingly using both CRM and CLM  tools. This unified approach offers a holistic, actionable view of client data that can be navigated by various organizational departments, thereby optimizing operational efficiency and compliance.

2. Faster client onboarding 

By focusing on a centralized, integrated system, companies can speed up client onboarding processes and reduce data fragmentation, which enables better decision-making. This is especially valuable in wealth management, where compliance with Anti-Money Laundering regulations is critical. Here, CRM and CLM integration can allow for real-time risk assessments during the onboarding process, thereby not just meeting but anticipating compliance requirements.

3. Stronger client relationships

It also shifts the focus from routine tasks to what truly matters: strengthening client relationships. The rich data gathered by CRM, when analyzed and acted upon through CLM, enables a more personalized approach to service delivery. So, it's not only about enhancing operational efficiency; it’s about redefining client management in a more robust, compliant, and client-centric manner.

CRM Integration for AML and KYC

In the financial sector, managing AML and KYC regulations is a complex task. CRM systems, when adapted for AML compliance, offer a robust solution. These specialized CRMs go beyond just gathering client data; they also bring in automated KYC features that leverage digital channels and third-party data for better risk assessment.

Combining an AML-adapted CRM solution with CLM tools takes things to the next level. The CRM system lays the groundwork by capturing initial client data, and the CLM salesforce extends this by analyzing it throughout the client's lifecycle. This synergistic approach improves operational efficiency and speeds up client onboarding, all while ensuring compliance.

While CRM systems serve as valuable initial touchpoints for client data collection, their capabilities can be fully realized when adapted for AML compliance and integrated with CLM systems. 


What is the meaning of CLM in CRM?

CLM stands for CLM in the context of CRM. In the salesforce CLM life cycle, for example, it focuses on managing the client's entire journey with a company, from onboarding to offboarding, while ensuring compliance and efficient data management.

What is the difference between CRM and CCM?

CRM focuses on managing interactions with existing and potential customers, primarily for sales and service optimization. Customer Communication Management (CCM) concentrates on the delivery of tailored communications to customers through various channels, such as email, SMS, or print.

What is the difference between CRM and contract management?

CRM deals with customer interactions, data gathering, and relationship-building. Contract management, on the other hand, specifically manages the creation, execution, and storage of legal contracts between parties, usually focusing on terms, compliance, and obligations.

How is CRM connected to customer life cycle management?

CRM feeds into customer lifecycle management by tracking and analyzing customer interactions. It provides the data and tools necessary to tailor the customer's journey, from awareness to loyalty, enabling companies to anticipate needs, solve problems, and maintain a long-term relationships.

What is CLM in Salesforce?

In Salesforce, CLM stands for Contract Lifecycle Management, a feature that streamlines the creation, tracking, and management of contracts and agreements within the platform.