Sales Performance Management in Financial Services: Webinar Recap


Sales Management Association hosted a webinar on Sales Performance Management (SPM) in the banking and financial services industry, presented by OpenSymmetry and Varicent. The speakers Rob Blohm, Senior Vice President of Sales and Alliances at OpenSymmetry, and Brad Burnaman, Regional Manager at Varicent, shared best practices from high performing firms in the financial industry and their areas of focus in an industry that faces complicated and changing regulatory requirements.

Focus on Conduct Risk

In financial services, as in any industry, a company must decide how to best maximize value for shareholders. This means making sure that you’re driving revenue for your business and providing financial results along with aligning organizational principles, which often means leveraging incentive compensation to drive the right sales behaviors. 

Definition of right revenue – aligning of organizational principles with financial results to maximize customer and shareholder value

However, it is important to identify areas where revenue could potentially drive behavior in the wrong way – wrong revenue. There have been big examples of wrong revenue in recent history, resulting in big banks with tarnished images. You want to be seen as trustworthy, not a place that exposes fraud or challenges to customers, as it’s a place where people put their money. Doing the right vs. wrong thing, both legally and morally.

Impacts of wrong revenue include:

  • Destruction of shareholder value
  • Litigation, regulatory scrutiny and fines
  • Job losses and pay cuts
  • Brand and reputational damage

In order to avoid driving wrong revenue, it is critical to assess conduct risk and be proactive to shape the path for the sales team.

Definition of conduct risk: the risk that a company’s employees or third party acting on behalf of the company, act or behave in such a way that poses risk to customers or brand image.

Take a look at the following external and internal conduct risk indicators:

  • External conduct risk indicators:
    • Customer complaints or churn
    • Irregular account behavior
    • Negative customer survey results
    • Complaints on social media
  • Internal conduct risk indicators
    • Concerns or investigations
    • Irregular account patterns
    • Outliers in variable incentive compensation
    • Disciplinary events

Out of these conduct risk indicators, ones that can easily be identified through an incentive compensation management (ICM) system include customer complaints and churn, irregular account behavior, and outliers in variable incentive compensation.

In order to catch these conduct risk indicators and take action in a timely way, there must be a system of data in place to categorize and classify conduct risk indicators. For example, conduct risk classification can look like:

  • Allegations of employee misconduct
    • Fraud
    • Unethical sales practices
    • High pressure to meet sales targets
  • Customer complaints
    • Mistreatment of a customer based on race, age, sex
    • High pressure sales tactics
    • Unauthorized sales transactions and deceiving customers

These two types of conduct risk classification may have overlaps, such as unethical sales practices. Identify what the important key risk indicators (KRIs) for your company are and correlate compensation design to these KRIs. Key aspects of conduct can be monitored through a conduct risk dashboard in best-in-class SPM solutions.

Common Banking Challenges Related to Sales Performance Management

While trying to minimize conduct risk through monitoring, these four key areas of challenges are unique to the banking and financial services industry and how they are addressed by best-in-class SPM solutions:

1. Credit management: assigning credits to the right people as transaction information enters the SPM or ICM system

  • Common challenges:
    • High transaction counts
    • Complex credit assignments
    • Credit tracking (NTB)
  • SPM capabilities:
    • Automated data management with error handling
    • Configurable crediting logic to assign and track credit types

2. Forecasting and analysis:

  • Common challenges:
    • Developing expense models
    • Assessing forecast vs. actuals
    • Evaluation of performance and tracking trends
    • Quota and goal distribution
  •  SPM capabilities:
    • Model new plans
    • If-then impact analysis
    • On-going performance analysis

3. Referral management

  • Common challenges:
    • Tracking
    • Managing
    • Paying
  • SPM capabilities:
    • Automated process for referral identification
    • Ability to implement and track adjustments
    • Process management (workflows)

4. Managing changes

  • Common challenges
    • Plan adjustments
    • Quota adjustments and movement
    • Guarantees
  • SPM capabilities:
    • Update or modify plans through user interface
    • Quota management capabilities
    • Draw and guarantee logic

Out of these types of challenges, managing changes is an especially relevant topic during the COVID-19 crisis as incentive compensation plans and processes may need adjustments to match the changing economic climate.

Additional Resources

With these challenges in mind for banking and financial services firms, it may be helpful to consider steps that high performing companies have solved similar challenges. OpenSymmetry has worked on the planning, implementation, and management of sales performance solutions for clients in the financial services sector since 2004. 

You can also watch the full Sales Performance Management in Financial Services Webinar playback here.

If you have any questions or would like further information from a section of the webinar, please leave a comment below and we will provide a response through email.

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