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Seminar Article

Seminar Article

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Published by: scbihari1186 on Jun 21, 2009
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08/21/2013

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MANAGING CUSTOMER RELATIONS IN NEW AGEBANKING
ByDr.S.C.Bihari, Sr.Manager, Allahabad Bank, Bhubaneswar& Faculty Designate, IBS, Hyderabad(scbihari@gmail.com/919437107358 ) INTRODUCTION
 As the saying goes, change is the only certainty
. And it is this change that governs thebanking industry today, which is graduating from financial intermediary into risk intermediary. The repetitive and overlapping systems and procedures have givenway to simple key-press technology, ensuring accuracy and speed of data flow toimprove overall efficiency through Knowledge Management.Information Technology (IT) today facilitates in utilising Knowledge Managementeffectively and efficiently to improve both product range and service quality in thebanking sector. Technology has played a vital role in the evolution of banking sector,through speed creation, accuracy and efficiency of operation and reduction in thetransaction cost. Banking services are now oriented to “anyhow, anywhere, anytimeand any type” bankingInstead of merely providing what the bank concerned could offer from its fold,banking may encompass extension of all the services that are required and dictatedby customers. Clients should get services from the banks on a 24x7 basis on anonline ATM connected to the network.Whosoever the banker may be, a customer should be able to access his or her bank account through a PC/laptop/mobile or an ATM around the corner. The time spentby the bank with customers would be reduced, thereby improving profitabilitythrough low operational cost that would ensure time saving for the customers, as aby-product.Banking the world over is undergoing a rapid and radical transformation, thanks tothe all-pervasive influence of Information Technology, telecommunication andElectronic Data Processing.The new generation banks started off with all branches fully networked and, in fact,many of them now operate with a fully centralised database that optimizes costscompared to inter-connection of distributed database in widespread branches.
 
There has been solid growth in the number of people going online, as well as in thevalue of financial services conducted, in the breadth of financial products tradedand in the depth of relationships conducted using digital channels
.
The advantages of Internet banking include no queuing, no rushing to the bank before it closes, access to the account 24x7, 365 days a year, low bank charges, fastertransmission of funds to settle transactions, and any time access to cash.Instead of banking through personal contacts established at the branch premises,banks now offer products through anywhere banking, ATM, the Internet andmobile phones, all enabled by vast electronic devices. These require less mobility onthe part of the customer. In fact, banking functions can be called at the press of amouse or few keys in cell phone. Concepts such as Real Time Gross Settlement,Cheque Truncation and Electronic Funds Transfer enable quick movement of funds.It is unlikely that any significant delay takes place in transferring funds from onebank to another. Client money would move between institutions as fast as data — atthe speed of light. Instant access to e-mail is now the order of the day in a worldwhere late response can spell the difference between signing and losing a high-valuecontract deal.RELATIONSHIP MANAGEMENT' is the name of the game in the bankingindustry today and customers never had it so good before. In a savings-driveneconomy like ours, banks have finally come of age and the emphasis is now onmaking the customer feel that he i s the king.
 As the saying goes, Customer is the profit, everything else is overhead!
With newer platforms emerging everyday to facilitate banking services, rangingfrom the, internet, mobile commerce to higher-end technology applications such asWAP etc, the traditional role of the bank which used to be that of `money lending'has assumed broader dimensions.The process of developing a cooperative and collaborative relationship between thebuyers and sellers is called customer relationship management shortly called CRM.CRM aims at focusing all the organizational activities towards creating andmaintaining a customer. CRM is a new technique in marketing where the marketertries to develop long term collaborative relationship with customers to develop themas life time customers. CRM aims to make the customer climb up the ladder of loyalty.
CUSTOMER FOCUS IN BANKING SERVICES
As the intense competition becomes a way of doing business, it is the customer whocalls the shot in deciding the nature of products and services offered in the market.The customers are becoming demanding, dominant and selective. In fact the
 
perceptions and the expectations of the customers have undergone a sea change,with the availability of banking services to the customers at their door steps throughthe help of technology.Marketing of customer services aims at two important goals: prosperity to the bank and satisfied customers. Banks offer tangible services like loan schemes, interestrates and kinds of account and the intangible services like behavior and efficiency of staff, speed of transactions and the ambience. The banks may need to includecustomer oriented approach or customer focus in their five areas of businesses suchas Cash accessibility, asset security, money transfer, deferred payment and financialadvices.There are four strategies available to customer relations' managers:• To win back or save customers• To attract new and potential customers• To create loyalty among existing customers and• To up sell or offer cross services.The future of banking business very much depends upon the ability of the banks todevelop close relationship with the customers. In order to develop close relationshipwith the customers the banking industry has to focus on the technology orientedinnovations that offer convenience to the customers. Today customers are offeredATM services, access to internet banking and phone banking facilities and creditcards. These have elevated banking beyond the barriers of time and space.
THE NEW AGE BANKS-NEW ORIENTATION
Unlike in the past, the banks today are market driven and market responsive. Thetop concern in the mind of every bank's CEO is increasing or at least maintainingthe market share in every line of business against the backdrop of heightenedcompetition. With the entry of new players and multiple channels, customers havebecome more discerning and less "loyal" to banks.This makes it imperative that banks provide best possible products and services toensure customer satisfaction. To address the challenge of retention of customers,there have been active efforts in the banking circles to switch over to customer-centric business model. The success of such a model depends upon the approachadopted by banks with respect to customer data management and customerrelationship management.Over the years, Indian banks have expanded to cover a large geographic andfunctional area to meet the developmental needs. They have been managing a world

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