OVERVIEW OF BANKING

CRM Practices in new generation Private Banks: A Case of ICICI Bank

Submitted to
Prof. Suresh Chandra Bihari IBS Hyderabad

2009
Submitted by
Ajeet Kumar Sharma- 08bshyd0042 Anirban Chakrabarti -08bshyd0098 Ankesh Kasat-08bshyd0103 Arpita Tiwari-08bshyd0148 Khushboo Jain 08bshyd0346 Raghvendra Singh 08bshyd0616 Suvobrata Mukhopadhyay-08bshyd0864 Ajeet Sharma Vikas Kukreja- 08bshyd0935 9/22/2009

ICFAI BUSINESS SCHOOL, HYDERABAD

CONTENTS
Acknowledgement ................................................................................................................................... 3 CRM in new generation private banks: a case of ICICI Bank ................................................................... 4 CRM at ICICI Bank ................................................................................................................................ 5 Implementing CRM at ICICI Bank .......................................................................................................... 6 Interview with an employee ..................................................................................................................... 8 Benchmarks/Results ................................................................................................................................ 9 Conclusions ........................................................................................................................................... 10 References............................................................................................................................................. 11 Websites/papers ................................................................................................................................. 11 Database............................................................................................................................................ 11

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

ACKNOWLEDGEMENT

This report is submitted in partial fulfillment of MBA Program of ICFAI Business School. We would like to express our sincerest gratitude to Prof Suresh Chandra Bihari for his continued guidance, encouragement and valued insights that have made this exercise exciting and an extremely useful learning experience.

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

CRM IN NEW GENERATION PRIVATE BANKS: A CASE OF ICICI BANK

Introduction CRM is an acronym for Customer Relationship Management. Its a set of strategies, processes, metrics, organizational culture and technology solutions that enhance an organization's ability to see the differences in its present & prospective customers, track new opportunities to better serve customers and act, instantly and profitably, on those differences and opportunities. Recently CRM has taken a center stage in the business world with businesses concentrating on saving money and increasing profits by redefining internal processes and procedures. It costs a company dramatically less to retain and grow an existing client, than it does to court new ones. The aim of CRM is to optimize the use of technology and human resources. CRM services consist of the following major segments: Consulting services Implementation services CRM Outsourcing services Training services

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

CRM AT ICICI BANK

Emphasizing on the importance of CRM one of the ICICI employees said, With the overall improvement in the ETL1 process made possible by PowerCenter, we benefited from greater data immediacy for business users and more reliable information, which resulted in quicker analysis and timely reporting. Gurnam Saini, Assistant General Manager, ICICI Bank CRM at ICICI Bank involves increased communication between the bank and its present and prospective customers. Its philosophy focuses on each and every customers satisfaction. CRM facilitated coordination of multiple business functions & multiple channel of communication with the customers to carry out customer management more efficiently. It also automated the process flow tracking in the product sales process and helped generate customized reports and promote cross-selling. The typical components of a CRM strategy at ICICI are as follows:

Understand and differentiate: Understanding customers is important in order to develop a sound relationship with them. Customer profiling is done in order to understand demographics, purchase pattern and channel preference. CRM also helped

Extraction, Transformation & Loading

5 | CRM Practices in new generation Private Banks: A Case of ICICI Bank

ICICI in valuation of its customers to understand customer profitability and Customer Life Time Value (CLV). Develop and customize: - In a customer centric business environment, the products and processes have to be according to customers needs and preferences. ICICI has always focused on developing channels of service delivery according to customers need and service expectation. Interact and Deliver: To foster a strong customer relationship ICICI ensured that all areas of the bank have easy access to relevant, actionable customer information and employees should be trained on how to use customer information to tailor interactions based on both customer needs and potential customer value. Acquire and Retain: CRM helped ICICI to figure out valuable customers and made it easy to formulate retention strategies for them. It also helped it cope up with the change in customers life cycle and offer services accordingly.

IMPLEMENTING CRM AT ICICI BANK

The key to implementing CRM was in understanding organization and customers in a better way. There are five interrelated areas that were taken care of before implementing CRM: Business Focus Organizational Structure Business Metrics Marketing Focus and Technology

Business Focus: There are various components of CRM like customer information, sales, marketing trends and marketing efficacy that acted in tandem to improve relationship between ICICI and its consumers. ICICI captured customer data and analyzed them while dealing with customers at these very touch points. A CRM solution from Siebel was implemented for the automation of customer handling in all key retail products of the Group. The solution allows customer service agents to track all customer complaints and requests. It also allows target setting and centralized tracking of turnaround times for request fulfillment. The solution went live in phases during fiscal 2002. The Bank has also undertaken a retail data warehouse initiative to achieve customer integration at the back-office. This central view of the total customer relationship is being used extensively for identifying opportunities to cross-sell new products and services to the existing customer base. Technology Focus: ICICI Bank continues to leverage ICT2 as a strategic tool for its business operations to gain competitive advantage. Its technology strategy emphasizes enhanced level of
2

Information and Communication Technology

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

customer services through 24x7 availability, multi-channel banking and straight through processing, and cost efficiency through optimal use of electronic channels, wider and focused market reach and opportunities for cross-selling. The Technology Management Group (TMG) is the focal point for the ICICI Groups technology strategy and Group-wide technology initiatives. This group reports directly to the Managing Director & CEO. A key to ICICIs success has been its ability to harness business information to CRM initiatives that have fueled growth and helped attract more than 30 million customers. The foundation for ICICI Banks wide-ranging CRM programs is a Sybase IQ-based data warehouse. Developers had used a combination of PL/SQL and BTEQ scripting, a proprietary technology specific to the data warehouse, for data extraction, transformation, and loading (ETL). With its growing customer base, IT administrators recognized that the bank needed a more powerful, sophisticated data integration system to help ensure the warehouse lived up to its potential as an analytic CRM engine that delivered tangible bottom-line results. To step up to the next level of data integration, ICICI Bank officials agreed with a recommendation from Teradatas professional services division, which provided systems integration support for the data warehouse, to implement the Informatica PowerCenter enterprise data integration platform. (The Bank initially used Teradata as its data warehouse platform and migrated to Sybase IQ a year ago.) ICICI Bank deployed PowerCenter in 2003 as it embarked on the next phase of its warehouse, which would add data from five new sources, in addition to the initial three sources of retail banking, credit cards, and securities information. The next step in the CRM implementation process was gap analysis which essentially is assessing different loopholes in: Marketing, sales and service practices Collection, capture, processing and deployment of customer information Distribution and operations effectiveness at customer touch points

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

INTERVIEW WITH AN EMPLOYEE

Suvobrata: Good evening Ms Priyanka Devedas. Ms Priyanka: Good evening Suvobrata. Suvobrata: Is it the right time to talk? We need your help regarding CRM Processes at ICICI. Ms Priyanka: Sure Suvobrata, Tell me how can I help you? Suvobrata: Can you just brief us regarding CRM process of ICICI bank? Ms Priyanka: CRM at ICICI is an extensive process which involves communication with existing customers and prospective customers. There are multiple channels through which we communicate with customers to carry out customer management process. We use different softwares to carry out these process. Suvobrata: We have also heard that ICICI Bank is the number one bank in India in customer relationship management. What is ICICI doing different than other banks? Ms Priyanka: We use latest software to understand our customers, their demographics and needs. We try to provide them customized products as per their requirements. You must be aware of different credit card schemes provided by us to customers. Suvobrata: CRM is the activity done at various levels of the organization, how does ICICI implement it? Ms Priyanka: Implementation part is done by Top management and I am not aware of the whole process. I can just tell you that GAP analysis is done before we embark on CRM implementation. Suvobrata: Thank you very much Ms Devadas. Ms Priyanka: Youre welcome Suvobrata. Feel free to contact if you need further assistance. Have a nice day. Reference: Ms Priyanka Devedas (Wealth Manager-Delhi) Priyanka.devadas@icicibank.com ICICI Bank Limited Booth No. 104-105 Faridabad 121007 Mobile-09953001002 The ease with which we could approach to this employee itself speaks volumes about the ICICI culture and its customer centric approach.

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

BENCHMARKS/RESULTS Time-Norms for Various Banking Transactions S. No. 1 2 3 4 5 6 7 8 Particulars Cash payment Receipt of cash For issuance of demand draft Payment of demand drafts Payment of fixed deposit receipts Opening of an account% Statement of accounts (request for duplicate) Collection of cheques - Local - Outstation Time Taken Up to 15 minutes Up to 15 minutes Up to 10 minutes Up to15 minutes 20 to 25 minutes 25 to 30 minutes Within 3 working days Normally within 4 days Normally within 21 days

Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Deployment of CRM Best Practices- Private Banks Name of Bank Type Mean ICICI Bank NPB 4.45 HDFC Bank NPB 4.41 Kotak Mahindra Bank NPB 4.1 UTI Bank NPB 4.07 IndusInd Bank NPB 3.79 ING Vyasa Bank OPB 3.76 Centurian Bank of Punjab NPB 3.48 Karur Vyasa Bank OPB 3.28 Federal Bank OPB 3.24 Tamil Nadu Mercentile Bank OPB 3.1 Jammu &Kashmir Bank OPB 3.07 Karnataka Bank OPB 2.97 Development Credit Bank NPB 2.97 South Indian Bank OPB 2.93 Bank of Rajsthan\ OPB 2.93 Lakshmi Vilas Bank OPB 2.86 City Union Bank OPB 2.79 Dhana Laxmi Bank OPB 2.79 Catholic Syrian Bank OPB 2.55 Overall Mean 3.34

Std. Dev
0.78 0.63 0.86 0.88 1.11 0.64 1.02 1.14 1.06 1.01 1 0.96 0.98 0.92 0.89 0.98 0.98 0.86 0.78

0.92

European Journal of Social Sciences Volume 11, Number 1 (2009)

| CRM Practices in new generation Private Banks: A Case of ICICI Bank

In the first table, we can see that the benchmarks set by ICICI are definitely of world class and clearly values customers precious time. Similarly, in the second table its evident that ICICI Bank and HDFC Bank have done very well compared to other banks in terms of CRM best practices. Moreover, the standard deviation is also very less compared to most of the other banks. Clearly this has helped ICICI bank acquire a large customer base (about 30 million) in a short span of time.

CONCLUSIONS

Thus, we see that a focused and customer centric approach helped ICICI Bank become # 2 bank in India (till recently, as PNB has taken over it as the No 2 bank in India now). ICICI has used CRM not only as a tool but also as a strategy to gain competitive advantage over other new generation private banks. It has invested a lot in ICT and spared no pains in giving best to the customers. Its multi-pronged approach towards managing customer relationship is paying dividends constantly and as a result we see millions of happy satisfied customers determined to make it one of the most successful banks in India.

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| CRM Practices in new generation Private Banks: A Case of ICICI Bank

REFERENCES

Websites/papers
1. ICICI Bank Improves IT Productivity and Systems Performance for Award- Winning 2. 3.

4. 5.

Data Warehouse with Informatica Data Integration PlatformCRM Practices at ICICI Bank- http://www.scribd.com/doc/14649491/ICICI-Bank ICICI Bank an Overviewhttp: //www.icicibank.com/pfsuser/aboutus/investorelations/annualreport/pdf/20012002/a_r2k2%2845-68%29.pdf Customer Relationship Management (CRM) Best Practices and Customer Loyalty A Study of Indian Retail Banking Sector- http://www.eurojournals.com/ejss_11_1_06.pdf Boosting Datacenter Availability for Largest Private Bank in India with the Help of Symantec - http://eval.symantec.com/downloads/sus/ICICI_Bank.pdf

Database
1. Industry Analysis Service - Client Version 2.0 2. Prowess. 3. EBSCO

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| CRM Practices in new generation Private Banks: A Case of ICICI Bank