ON BANKING SECTOR

SUBMITTED TO- Prof. REETI AGARWAL

SUBMITTED BYMUDITA KHARE (PGDM-086) OMAR ALI SUBZPOSH (PGDM-) MANDEEP KAUR GHAI (FS-031) RAHUL GAUR (RM-)

INTRODUCTION
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved in the business process. It is about creating a sustainable competitive advantage by being the best at understanding, communicating, and delivering, and developing existing customer relationships in addition to creating and keeping new customers. Customer Relationship Management (CRM) is a co-ordinate approach to the selling process allowing the various operational, customer contact and sales promotional functions of an organization to function as a whole.

CRM IN THE BANKING SECTOR

Today, customers have more power in deciding their bank of choice. Consequently, keeping existing customers, as well as attracting new ones, is a critical concern for banks. Customer satisfaction is an important variable in evaluation and control in a bank marketing management. Poor customer satisfaction will lead to a decline in customer loyalty, and given the extended offerings from the competitors, customers can easily switch banks. Banks need to leverage effectively on their customer relationships and make better use of customer information across the institution. Competition in the financial services industry has intensified in recent years, owing to events such as technology changes and financial industry deregulation. Conventional banking distribution has been gradually supplemented by the emerging use of electronic banking. Many bank customers prefer using ATMs or a website rather than visiting a branch, while technology has also reduced barriers to entry for new customers. One of the banks' greatest assets is their knowledge of their customers. Banks can

use this asset and turn it into key competitive advantage by retaining those customers who represent the highest lifetime value and profitability. Banks can develop customer relationships across a broad spectrum of touch points such as at bank branches, kiosks, ATMs, internet, electronic banking and call centers.

OBJECTIVES OF CRM IN BANKS

CRM, the technology, along with human resources of the banks, enables the banks to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer, relationship, and the management of relationship and the main objectives to implement CRM in the business strategy are: To simplify marketing and sales process To make call centres more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively CRM technology enables information about the customer to be stored in databases businesses to analyze that data, pull out customer preferences and make clear their behavior easy access to that data across departments that may be widely geographically dispersed easy access for customers in terms of online transactions speedy personalized communications that enable the customer to feel valued and special even though in reality they may be just one of hundreds of thousands of customers

Benefits of CRM
Benefits of CRM can be categorized into three groups namely: Benefits for customers, benefits for employees and benefits for banks. (i) Benefits for Customers There is a more coordinated and professional approach to customer contact. With up-to-date customer information, Banks can offer more personalized services. Customers feel empowered if they have greater access to products and services. For example 24 Hours banking. Targeted product and service offerings can be timed to coincide with customer events and requirements e.g., Education Loans and Tourism Loans. (ii) Benefits for Employees Employees are empowered with the information to deliver high quality service and meet customer expectations.

 Employees have more time to serve customers. Employees have higher satisfaction ratings. (iii) Benefits for Banks Managers are empowered with information that can help them manage customer relationships and make better decisions. Optimum use of resources. Customer satisfaction and increased loyalty. Improved customer acquisition and cross-selling. It helps in capitalizing on short windows of opportunities in the market. The banks taken into account for the study of CRM methods are-

1) State Bank of India 2) Punjab National Bank

The above two banks taken into consideration are amongst the two leading public sector banks in India. Banking sector is one sector which is made by and for the people .i.e. the customers.

STATE BANK OF INDIA

State Bank of India (SBI) is the largest banking and financial services company in India by revenue, assets and market capitalization. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidencies banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India.

The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.

CRM IN SBI
To cater to its customers diligently and providing delightment with its products and services, the bank has carved out a massive CRM programme. To facilitate customers, the bank has also segregated its branches into various segments depending on the type of customer it is catering to viz. corporate account groups, treasury branches, SSI branches, Commercial branches, NRI branch and network branch. The bank has also created a separate PERSONAL BANKING BRANCH (PBB) for the purpose. There are about 75 PBBs in India. The main purpose of these PBBs is to provide all banking products right from Saving Bank accounts, Current accounts to home loan, car loan, personal loan, credit cards, and mutual funds and insurance under the same roof. CRM schemes of SBI are as follows1) The PBBs set up have a uniform set of interiors with certain facilities across the country to ake customers feel the ame level of comfort with any of the bank branches in the country. 2) The concept of Relationship Managers(RMs) has been introduced in these PBBs. The PBBs have asked to identify top 200 accounts of their branch based on their values and business with the bank and assign an exclusive RM to these accounts in a group of 7-10 accounts. These RMs are supposed to look after all of the problems and all sorts of requirements of these customers. They would be providing all services at one desk only. This arrangement is supposed to help bank in better serving their customers and also help in up-selling and cross-selling. 3) Every branch is supposed to form a Customer Relationship Committee meeting every month. The committee comprises of Staff members, 5 customers from various customer groups- high net worth individuals(HNI) customers, pensioners, industrial loan customers, retail loan customers etc. The customers are called at the banks and are asked to lodge their complaints and also give suggestions on various matters pertaining to bank services.

4) Every branch is supposed to organize one special customer relationship programme every quarter aiming at any one of the customer issues coined in the Customer Service Committee meeting. 5) The Corporate sector of the bank has a separate CRM cell. This cell is supposed to design programmes for various customer requirements and do the necessary arrangements that can increase customer satisfaction with the bank. 6) Pensioners who constitute a large chunk of SBI customers, are called in to bring forth their grievances and suggestions to improve banking services, once a quarter. 7) To impart a feel good factor amongst its customers, the bank also does community service banking for schools and colleges. 8) The bank has now also started sending seasonal greetings to its high-value customers. This is an attempt to induce personal feeling in their relationship with the bank. 9) It has been made mandatory for every branch having more than 20 staff strength to set up counter of MAY I HELP YOU. It is supposed to help customers in all their requirements such as filling up a FD form, enquiry related to certain banking products and regarding the usage of any other type of services. 10) The bank has also started a helpline at all the zonal offices to cater to the customer complaints over the phone.

PUNJAB NATIONAL BANK

Punjab National Bank (PNB) is an Indian financial services company based in New Delhi, India. PNB is the third largest bank in India by assets. It was founded in 1894 and is currently the second largest state-owned commercial bank in India ahead of Bank of Baroda with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the Bankers Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai. PNB was finding it difficult to monitor measure and follow up on business interactions being done with its prospective customers. The bank has had a core banking system in place for years, but that can only capture and capitalize on customer data after opening an account. As a result, the bank was losing lots of business opportunities. PNB deployed CRM software in 1650 branches, aptly naming it Customer First. The solution comprises of modules for business prospect management, lead management, activity management, product management, campaign management, and business intelligence reporting. Customer first has helped PNB create a non-customers database, thereby allowing speedy identification of valued customers. PNB is able to cross sell its products, automate sales and marketing, and optimize its sales pipeline, thereby increasing the sales team's effectiveness and productivity. So much so that it has helped increase PNB's customer base from 5.81Cr. As part of the initiatives to utilize Technology to enhance Customer Relationship and provide improved Customer Service, Punjab National Bank has implemented

the Customer Relationship Management solution which has been branded as Customer First. in more than 1015 identified branches The Centralized CRM Solution facilitates tracking the conversion of the business leads from prospective and existing customers for conversion into business through lead Management module, improved customer relationship by tracking the Customer Interactions through Activity management , standardized display of product features across the identified outlets to the Customer Care officers through Product Management administering the various product and services publicity to the customers through the Campaign Management modules.

QUESTIONNARE

1. Name of your bank _________________

2. From how many years are you a customer at this bank? Less than 2 years Less than 5 years Less than 10 years More than 10 years

3. Does the bank have convenient banking hours? Yes No

4. How satisfied you are with the following aspects of the banks facilities? Very satisfied Clean & well cared facilities Efficient, no wait service No long line ups at counter Availability of information brochures Satisfied Neutral Dissatisfied Very dissatisfied

5. In terms of the services you receive from the employees of the bank, how satisfied you are with the following? Very Very Satisfied Neutral Dissatisfied satisfied dissatisfied Friendly and courteous manner Knowledge of bank's products & Services Willingness to listen and respond to your need Fast and efficient service

6. Do you receive statements and monthly documents? Yes No

7. In terms of your expectations regarding mailed statements, please indicate your satisfaction with the following: Very satisfied Sent out reliably and on time Complete record of transactions Accurate Easy to read and understand Satisfied Neutral Dissatisfied Very dissatisfied

8. Customer complaint management of the bank is: Excellent Good Average Below average

9. In terms of the service you expect from the telephone contact please rate the following criteria: Very Very Satisfied Neutral Dissatisfied satisfied dissatisfied Call handled promptly, not kept on hold Courteous and professional manner Quickly connected to the right person Question or problem handled to your satisfaction

10. What do you think about the overall customer service in the bank? Very good Good Fair Poor Very poor 11. Would you recommend this bank to your friends, associates and relatives? Yes No

Q) From how many years are you a customer at this bank? Less than 2 years Less than 5 years Less than 10 years More than 10 years

The comparative analysis of both the banks reveals that SBI having an older history with the customers is more preferred even when PNB is also a good name in the sector. However, since both the banks are competitors therefore the gap is quite less.

Q) Does the bank have convenient banking hours? Yes No

SBI
yes no

12%

88%

The timings of the banks were convenient in both the cases of the banks by majority of the customers. Only a few had problems with the baking hours.

Q) How satisfied you are with the following aspects of the banks facilities? Very satisfied Clean & well cared facilities Efficient, no wait service No long line ups at counter Availability of information brochures Satisfied Neutral Dissatisfied Very dissatisfied

CLEAN AND WELL CARED FACILITIES

NO WAIT SERVICE

INFORMATION BROCHURES

The above data reveals that as far as cleanliness and other such areas are concerned, both the banks still need to do a lot of work to enhance this area as well. However, the brochures are readily available in both the banks and therefore less dissatisfied customers.
Q) In terms of the services you receive from the employees of the bank, how satisfied you are with the following? Very satisfied Friendly and courteous manner Knowledge of bank's products & Services Willingness to listen and respond to your need Fast and efficient service Satisfied Neutral Dissatisfied Very dissatisfied

FRIENDLY AND COURTEOUS, WILLINGNESS TO ANSWER

As is evident from the data and the charts, friendliness is somewhere more in case of PNB as compared to SBI. More customers were satisfied with the staff of PNB than SBI as compared to willingness to solve queries was concerned.

Q) Do you receive statements and monthly documents? Yes No

As far as monthly updates are concerned, the customers had no problems with either of the banks. Q) In terms of your expectations regarding mailed statements, please indicate your
satisfaction with the following: Very satisfied Sent out reliably and on time Complete record of transactions Accurate Easy to read and understand Satisfied Neutral Dissatisfied Very dissatisfied

Most customers were satisfied in case of SBI as far as their mailed statements were concerned. However, in PNB understanding of these statements was a common issue faced by most of its customers. Q) Customer complaint management of the bank is:
Excellent Good Average Below average

Customer complaints are catered more efficiently in PNB than in SBI. This is the reason why PNB has won so many awards for its customer services.
Q) In terms of the service you expect from the telephone contact please rate the following criteria: Very Very Satisfied Neutral Dissatisfied satisfied dissatisfied Call handled promptly, not kept on hold Courteous and professional manner Quickly connected to the right person Question or problem handled to your satisfaction

Handling of calls was satisfactory in both the banks. However, SBI had an edge over PNB by having more satisfied customers in this area.

Q) What do you think about the overall customer service in the bank? Very good Good Fair Poor Very poor