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BANK OF INDIA
CHAPTER-1
INTRODUCTION
1.1 INTRODUCTION
Today, many businesses such as banks, insurance companies, and other service providers
realize the importance of Customer Relationship Management (CRM) and its potential to
help them acquire new customers retain existing ones and maximize their lifetime value. At
this point, close relationship with customers will require a strong coordination between IT
and marketing departments to provide a long-term retention of selected customers. This paper
deals with the role of Customer Relationship Management in banking sector and the need for
Customer Relationship Management to increase customer value by using some analytical
methods in CRM applications.
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.
CRM is a sound business strategy to identify the banks most profitable customers and
prospects, and devotes time and attention to expanding account relationships with Banking
Industry in India has undergone a rapid changes followed by a series of fundamental
developments. Those customers through individualized marketing, repricing, discretionary
decision making, and customized service-all delivered through the various sales channels that
the bank uses. Under this case study, a campaign management in a bank is conducted using
data mining tasks such as dependency analysis, cluster profile analysis, concept description,
deviation detection, and data visualization. Crucial business decisions with this campaign are
made by extracting valid, previously unknown and ultimately comprehensible and actionable
knowledge from large databases. The model developed here answers what the different
customer segments are, who more likely to respond to a given offer is, which customers are
the bank likely to lose, who most likely to default on credit cards is, what the risk associated
with this loan applicant is. Finally, a cluster profile analysis is used for revealing the distinct
characteristics of each cluster, and for modeling product propensity, which should be
implemented in order to increase the sales.
The architecture of CRM can be broken down into three categories, and these are
collaborative, operational, and analytical. The collaborative aspect of CRM deals with
communication between companies and their clients. The operational aspect of the
architecture deals with the concept of making certain processes automated. The analytical
aspect of CRM architecture deals with analyzing customer information and using if for
business intelligence purposes. Each one of these elements are critical for the success of a
CRM system. A company must learn how to use all three properly, and when they do this
proficiently, they will be able to build strong customer relationships and ensure their profits
for a long period of time. As more businesses continue to compete on a global level, it will
become more important for them to use successful Customer relationship management
techniques.
customers as their focal point took place. However cut throat competition made it difficult
and challenging to retain customers. CRM emerged as a new approach enabling marketers
with brand new tool and techniques to reach, acquire, retain and expand customer base.
Through CRM companies tried to re-personalize their customer relationships by installing
sales technology - sales contact management, Web personalization of e-sales messages, and
sophisticated segmenting and predictive modeling tools for more tailored sales messages.
In the beginning
The 1980s saw the emergence of database marketing, which was simply a catch phrase to
define the practice of setting up customer service groups to speak individually to all of a
companys customers.
In the case of larger, key clients it was a valuable tool for keeping the lines of communication
open and tailoring service to the clients needs. In the case of smaller clients, however, it
tended to provide repetitive, survey-like information that cluttered databases and didnt
provide much insight. As companies began tracking database information, they realized that
the bare bones were all that was needed in most cases: what they buy regularly, what they
spend, what they do.
However database marketing was too costly, too difficult and didnt pay out on the bottom
line, except in the case of business-to-business key account marketing. A little database
marketing went a long way, which was very good news for everyone except technology
vendors.
1.3
DEFINITION
AND
MEANING
OF
CUSTOMER
RELATIONSHIP MANAGEMENT(CRM)
DEFINITION OF CRM
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.
MEANING OF 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.
CRM stands for Customer Relationship Management. It is a strategy used to learn more about
customers' needs and behaviours in order to develop stronger relationships with them. Good
customer relationships are at the heart of business success. There are many technological
components to CRM, but thinking about CRM in primarily technological terms is a mistake.
The more useful way to think about CRM is as a strategic process that will help you better
understand your customers needs and how you can meet those needs and enhance your
bottom line at the same time. This strategy depends on bringing together lots of pieces of
information about customers and market trends so you can sell and market your products and
services more effectively
whether or not it has successfully implemented CRM. Despite the fact that industries have
different business aspects they share some common CRM goals.
2) Increasing Efficiency:
One of the most important goals of CRM is the increase in organization efficiency and
effectiveness. This is almost always adopted by every organization. It is necessitated by the
fact that increase in efficiency is required to boost success. CRM achieves this through cost
reduction and customer retention. Adequate CRM training achieves this goal.
Customers in long-term relationships are more comfortable with the service, the
organization, methods and procedures. This helps reduce operating cost and costs arising out
of customer error.
With increased number of banks, products and services and practically nil switching costs,
customers are easily switching banks whenever they find better services and products. Banks
are finding it tough to get new customers, and more importantly, retain existing customers.
According to a research by Reichheld and Sasser in the Harvard Business Review, 5%
increase in customer retention can increase profitability by 35% in banking business, 50% in
insurance and brokerage, and 125% in the consumer credit card market. Therefore, banks are
now stressing on retaining customers and increasing market share.
STEP TO FOLLOW
6
The following steps minimize the work regarding adoption of CRM strategy. These are:
Identification of proper CRM initiatives
Implementing adequate technologies in order to assist CRM initiative
Setting standards (targets) for each initiative and each person involved in that circle
Evaluating actual performance with the standard or benchmark
Taking corrective actions to improve deviations, if any
The important factors that establish the need for CRM in the Banking Industry are detailed
below:-
Intense Competition
There is intense competition among the Private Sector Banks, Public Sector Banks and
Foreign Banks and they are all taking steps to attract and retain the customers. New
technologies, research facilities, globalization of services, the flood of new products and the
concept of all the facilities under one roof to provide better customer service leading to
customer delight.
In the intensely competitive banking industry, retention of existing customers is vital, which
can be achieved through the process of CRM.
Customer Relationship Management is concerned with attracting, maintaining and enhancing
customer relationship in multi service organizations. CRM goes beyond the transactional
exchange and enables the marketer to estimate the customers sentiments and buying
intentions so that the customer can be provided with products and services before the starts
demanding. Customers are the backbone of any kind of business activities, maintaining
relationship with them yield better result.
Overall Profitability
CRM enables banks to give employee's better training that helps them face
customers easily. It achieves better infrastructure and ultimately contributes to better overall
performance. The byproducts of CRM banking solutions are customer acquisition, retention
and profitability. Banks that don't implement CRM will undoubtedly find themselves with
lesser profitability coupled with a sharp decline in the number of customers.
Satisfied Customers
It is important to make a customer feel as if he / she is the only one - this will go a
long way in satisfying and retaining them. Bankers need a return on investment and it has
been proved that increase in customer satisfaction more than contributes a fair share to ROI.
The main value of CRM banking lies in satisfaction and increased retention of customers.
Centralized Information
CRM banking solutions manage to clearly integrate people, processes and technology.
CRM banking provides banks with a holistic view of all bank transactions and customer
information as well and stores it in a single data warehouse where it can be studied later.
Customer Segregation
CRM enables a bank to see which customers are costing them and which are bringing
benefits. CRM provides them with the required analytical tools that will help them focus on
the importance of segregating these two and doing what is required to avail of the maximum
returns.
After this segregation is done CRM easily enables banks to increase their
communication and cross-selling to their customers effectively and efficiently.
CRM solution supports the creation of demand generation through multi-channel and
multi-wave campaigns. The solution ensures the banks marketing message is appropriately
personalized and targeted towards the most suitable segment of prospects. This optimizes
marketing efforts and results in greater conversion of prospects
Campaign Management
10
Banks need to identify customers, tailor products and services to meet their needs and sell
these products to them. CRM achieves this through Campaign Management by analyzing
data from banks internal applications or by importing data from external applications to
evaluate customer profitability and designing comprehensive customer profiles in terms of
individual lifestyle preferences, income levels and other related criteria.
Based on these profiles, banks can identify the most lucrative customers and customer
segments, and execute targeted, personalized multi-channel marketing campaigns to reach
these customers and maximize the lifetime value of those relationships.
Marketing Encyclopedia
Central repository for products, pricing and competitive information, as well as internal
training material, sales presentations, proposal templates and marketing collateral.
11
These enable organizations to effectively manage leads and opportunities and track
the leads through deal closure, the required follow-up and interaction with the prospects.
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
Customer relationships are becoming even more important for banks as market
conditions get harder. Competition is increasing, margins are eroding, customers are
becoming more demanding and the life-cycles of products and services are shortening
dramatically. All these forces make it necessary for banks to intensify the relationship with
their customers and offer them the services they need via the channels they prefer.
CRM helps banks to provide lot of benefits to their customers; some key
benefits are as follow.
Service provisioning throughout the entire life cycle of the corporate customer, from the
initial stages to the establishment of a close, long-term relationship with profitable clients,
Optimization of the use of bank resources, such as alternative channels of distribution
(internet and home banking),
Significant reduction in and limitation of operational costs through system automation and
standardization,
Low maintenance and expansion costs owing to the use of modern administration tools
which allow bank employees to make a wide range of modifications to the system
CRM permits businesses to leverage information from their databases to achieve customer
retention and to cross-sell new products and services to existing customers.
Companies that implement CRM make better relationships with their customers, achieve
loyal customers and a substantial payback, increased revenue and reduced cost.
CRM when successfully deployed can have a dramatic effect on bottom-line performance.
For example, Lowes Home Improvement Warehouse, in a span of 18 months, achieved a 265
percent return on investment (ROI) on its $ 11m CRM investment.
13
Banks have made several innovations for sustenance by using the CRM System such as: The
introduction of ATMs.
Biometric ATMs.
Single Window Service.
Teller System.
Internet Banking
Introduction of Plastic Money: Credit Card, Debit Card, Smart Card
. Mobile and E-Mail Alerts
Electronic Cash
Introduction of two in one Accounts.
Introduction of new loan schemes as per the customers needs viz. Education Loans,
Marriage Loans, Housing Loans, , Furniture Loans, Renovation Loans and Tourism Loans.
15
1. Customer Acquisition.
2. Customer Retention.
3. Customer Extension.
4. Marketing Orientation.
5. Value Creation.
6. Innovative IT.
1. Customer Acquisition - This is the process of attracting our customer for the first their
first purchase. We have acquired our customer.
Growth - Through market orientation, innovative IT and value creation we aim to increase
the number of customers that purchase from us for the first time.
2. Customer Retention - Our customer returns to us and buys for a second time. We keep
them as a customer. This is most likely to be the purchase of a similar product or service, or
the next level of product or service.
16
Growth - Through market orientation, innovative IT and value creation we aim to increase
the number of customers that purchase from us regularly.
3. Customer Extension - Our customers are regularly returning to purchase from us. We
introduce products and services to our loyal customers that may not wholly relate to their
original purchase. These are additional, supplementary purchases. Of course once our loyal
customers have purchased them, our goal is to retain them as customers for the extended
products or services.
Growth - Through market orientation, innovative IT and value creation we aim to increase
the number of customers that purchase additional or supplementary products and services.
4. Marketing Orientation - means that the wholes organisation is focused upon the needs of
customers. Customer needs are addressed by the Three Levels of a Product whereby the
organisations not only supplies the actual, tangible product, but also the core product and its
benefit, and also the augmented product such as a warranty and customer service. Marketing
orientation will focus upon the needs of consumers for all three levels of a product. (N.B.
'market' orientation and 'marketing' orientation are not the same).
5. Value Creation - centres on the generation of shareholder value based upon the
satisfaction of customer needs (as with marketing orientation) and the delivery of a
sustainable competitive advantage.
6. Innovative IT - is exactly that - Information Technology must be up-to-date. It should be
efficient, speedy and focus upon the needs of customers. Whilst IT and/or software are not
the entire story for CRM, it is vital to its success. CRM software collects data on consumers
and their transactions. Huge databases store data on individuals and groups of individuals. In
some ways, CRM means that an organisation is dealing with a segment of one person, since
every consumer displays different purchasing habits and preferences. Organisations will track
individuals, and try to market products and services to them based upon similar buyer
behaviour seen in other individuals (e.g. When Amazon tells you that customers that
viewed/bought the same product as you, also bought another product).
17
Gartner created the Eight Building Blocks of CRM a framework to help enterprises
see the big picture, make their business cases and plan their CRM implementation.
The framework can be used to develop the CRM vision and strategies. It can also be
the basis of an assessment of the enterprises existing and required CRM capabilities,
to help understand its current position and future strategy.
The framework emphasizes the need to create a balance between the requirements of
the enterprise and the customer. The two central building blocks in Figure 1 (valued
customer experience and organizational collaboration) are joined by a yin and yang
motif to emphasize that this is where people meet, build relationships and provide
value to each other. Too many CRM initiatives suffer from an inward focus on the
enterprise, whereas the point of CRM is to achieve a balance between value to
shareholders or stakeholders and value to customers for mutually beneficial
relationships.
Successful CRM demands a clear vision so that a strategy and implementation can be
developed to achieve it. The CRM vision is how the customer-centric enterprise wants
to look and feel to its customers and prospects the customer value proposition
(CVP) and the corporate brand values are key to the CRM vision. Without a CRM
vision, the enterprise will not stand out from the competition, target customers will
not know what to expect from it and employees will not know what to deliver in terms
of external customer experience. A successful CRM vision is the cornerstone to
motivating staff, generating customer loyalty and gaining a greater market share.
A CRM strategy is not an implementation plan or road map. A real CRM strategy
takes the direction and financial goals of the business strategy and sets out how the
enterprise is going to build customer loyalty that feel-good factor of customer
connection with an enterprise that means customers stay longer, buy more,
recommend the enterprise to others and are more willing to pay a premium price. The
objectives of a CRM strategy are to target, acquire, develop and retain valuable
customers to achieve corporate goals.
Customers experiences when interacting with the enterprise play a key role in
shaping their perception of the enterprise the value it provides and the importance
it places on the customer relationship. Good customer experiences drive satisfaction,
trust and long-term loyalty. Poor customer experiences have the opposite effect and,
because bad news travels faster and further than good news, they harm the enterprises
ability to create new relationships with prospects. No amount of internal second
guessing can simulate what its really like to be a customer.
19
Successful CRM requires a flow of customer information around the organization and
tight integration between operational and analytical systems. Having the right
information at the right time is fundamental to successful CRM strategies, providing
customer insight and allowing effective interaction across any channel. Unfortunately,
most enterprises CRM information capabilities are poor the result of numerous
and fragmented departments, initiatives, databases and systems. Enterprises that
establish a business plan for sourcing, managing and leveraging their customer
information assets are more likely to achieve their CRM goals and objectives and gain
a competitive advantage
20
For most technologists, CRM is all about technology. CRM technologies are an
essential enabler for any modern CRM business strategy, but they are just one piece of
the puzzle. Key Technology decisions that enterprises have to take are in three areas
namely CRM applications, architectural issues and integration. In many CRM
projects, integration issues start as a relatively low priority, and then rise in
prominence (cost and time) as enterprises realize that true CRM requires seamless
customer-centric processes, supported by integrated technology across the enterprise
and its supply chain
The other seven building blocks depend on performance targets and metrics to gauge
their success, and enterprises must set measurable CRM objectives and monitor CRM
indicators to successfully turn customers into assets. Without performance
management, a CRM strategy a program is destined to fail. Getting the Best out of
CRM Performance Metrics introduces a framework for measuring an enterprises
success with CRM by creating a hierarchy of performance metrics with four levels,
namely: corporate, customer strategic, operational and process, and infrastructure
input metrics. These metrics have an internal and an external focus and link
operations to strategy and corporate financial benefits. Each enterprise will have a
unique set of metrics applicable to their situation.
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CHAPTER-2
IMPLEMENTATION OF CRM IN BANK
METHOD OF EFFECTIVE CRM IMPLEMENTATION
Banks can take several steps to strengthen their customer relationship management in
an effective manner.
1.
acknowledges receipt of a customer's email and lets the sender know when to expect a more
complete response.
It is then vital to get back to the customer within the promised time frame. Banks can
earn more customer goodwill if they respond faster than the imposed deadline. To handle
significant volumes of email, banks need adequate routing technology. Many banks regard a
voice call centre as a cost of doing business, but they don't look at it the same way with
email.
2.
By knowing which offers and incentives to offer to which customers and when, banks
will not annoy customers with unwanted marketing offers, building customer loyalty along
the way. Such goals can be at least as important as realizing cross-sell opportunities.
22
3.
or any other form of immediate response. This service also offers some of the immediacy of
the phone but primarily allows customers to remain online. With online chatting, service
agents can usually handle between one and three customer inquiries at once.
Given that the average call lasts about four minutes, a customer-service representative
can handle 10 to 12 customers per hour using "chat", compared with six to eight per hour
over the telephone. One of chat's important advantages is that it keeps customers in an online
store environment where they remain exposed to merchandise and promotions.
4.
reduce these expenses a site should anticipate customer needs. Sites that is difficult to
navigate and don't provide needed information chase away some customers and force those
who stay to resort to more expensive channels to satisfy their service needs.
5.
business issues, the customer relationship model and the exact nature of customer interactions
and how they tie together. Banks should not embrace top-line growth as an objective until
they can understand precisely how CRM technology will provide those new revenues.
6.
complete and meaningful view of the customer. CRM is primarily a business program, and it
23
requires a genuine partnership between various departments to ensure that both business and
technology issues are managed effectively.
Furthermore, CRM not only takes existing business processes and makes them more
efficient, but it also requires these processes to be modified. For a CRM implementation to be
successful, decision makers within the bank need to make sure that all the stakeholders
understand and support the required process changes.
24
CHAPTER-3
A STUDY OF CRM WITH REFERENCE TO STATE BANK OF
INDIA
3.1 HISTORY OF SBI
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.
The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was
the first ever joint-stock bank of the British India, established under the sponsorship of the
Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840)
and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These
three banks dominated the modern banking scenario in India, until when they were
amalgamated
to
form
the
Imperial
Bank
of
India,
on
27
January
1921.
An important turning point in the history of State Bank of India is the launch of the first Five
Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in
general and the rural sector of the country, in particular. Until the Plan, the commercial banks
of the country, including the Imperial Bank of India, confined their services to the urban
sector. Moreover, they were not equipped to respond to the growing needs of the economic
revival taking shape in the rural areas of the country. Therefore, in order to serve the
economy as a whole and rural sector in particular, the All India Rural Credit Survey
Committee recommended the formation of a state-partnered and state-sponsored bank.
25
The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of
India, and integrating with it, the former state-owned or state-associate banks. Subsequently,
an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India
(SBI) was established on 1 July 1955. This resulted in making the State Bank of India more
powerful, because as much as a quarter of the resources of the Indian banking system were
controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was
passed in 1959. The Act enabled the State Bank of India to make the eight former Stateassociated
banks
as
its
subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried out by the 480
offices comprising branches, sub offices and three Local Head Offices, inherited from the
Imperial Bank. Instead of serving as mere repositories of the community's savings and
lending to creditworthy parties, the State Bank of India catered to the needs of the customers,
by banking purposefully. The bank served the heterogeneous financial needs of the planned
economic development.
Branches
The corporate center of SBI is located in Mumbai. In order to cater to different functions,
there are several other establishments in and outside Mumbai, apart from the corporate center.
The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at
major cities throughout India. It is recorded that SBI has about 10000 branches, well
networked
to
cater
to
its
customers
throughout
India.
ATM Services
SBI provides easy access to money to its customers through more than 8500 ATMs in India.
The Bank also facilitates the free transaction of money at the ATMs of State Bank Group,
which includes the ATMs of State Bank of India as well as the Associate Banks State Bank
of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also
transact money through SBI Commercial and International Bank Ltd by using the State Bank
ATM-cum-Debit
(Cash
Plus)
card.
The State Bank Group includes a network of eight banking subsidiaries and several nonbanking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership in
government securities, credit cards and insurance.
Growth
State Bank of India has often acted as guarantor to the Indian Government, most notably
during Chandra Shekhar's tenure as Prime Minister of India. With 10000 branches and a
further 4000+ associate bank branches, the SBI has extensive coverage. Following its archrival ICICI Bank, State Bank of India has electronically networked most of its metropolitan,
urban and semi-urban branches under its Core Banking System(CBS), with over 4500
branches being incorporated so far. The bank has the largest ATM network in the country
having more than 5600 ATMs The State Bank of India has had steady growth over its history,
though the Harshad Mehta scam in 1992 marred its image.
In recent years, the bank has sought to expand its overseas operations by buying foreign
banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global
500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian
companies
every field because it is beyond its scope. If every organization will be specialize in every
field then there will not be any competition between various organizations and it will not
have fear of lose the business to other organizations. So this analysis is given as follow:
STRENGTHS: Main strength of this bank is, it is the largest bank of the INDIA, it has wide network
of branches and ATM overall pan INDIA.
Less charges are taken from the customers for providing the services. Most of
customers are happy due to this complaint of this.
This bank also keeps that type of customers which are of low profitability. It believes
not only in profit which is main aim of every organization. It is also perform social
responsibility.
This bank has monopoly in most of fields as it provide clearance house, come most
important after RBI, provide loans to the poorest farmers and needing persons.
It has seven subsidiary banks ,all of these capture more market growth rate by more
synergy.
WEAKNESS: First weakness of this branch is ,it doesnt issue the memo immediately if any one
work is not perform in time or any one come late. No one take responsibility on his
shoulder .
High networking technology is used in some branches. All branches are not
computerized and high security softwares are not used.
Daily performance chart of the organization doesnt come on the computer of every
employee as in private sector bank. Even performance of the employee also doesnt
come.
28
No incentives are given to the employees for motivating them. Even the incentive is
also not fixed for the employee who has operation work. Only they have to perform
customers work.
High discipline is not used in the branch as it is requirement of every organization. No
organization can exist in this competitive environment without it.
In this bank, account is open with minimum of Rs.1,000. Some low class person
cannot manage this amount in initial stage
Every employee in this branch is overloaded with work. The work distributed is more
than working capacity of the employee.
This bank spends less on basic facilities what I have found that are very old ATM
which mostly remain out of work, no sitting and standing arrangement etc.
OPPORTUNITIES:
It can increase its network more as good response is coming as customer base is
increasing, it means people are ready to take services of this bank.
It can relax some of its internal rules to catch more customers. Many other banks have
not rules which this bank has put in ahead of customers.
From the customer feedback it is found that its customers have mainly saving, current
accounts and fixed deposits. Its customers have no insurance policy of its bank, less
awareness of mutual fund. These customers should be provided full knowledge about
its all products. As this banks customer base is increasing, knowledge of all products
should be given.
It can open branches in foreign also as many of its customers are NRIs. It has tied up
with other banks in foreign to handle the foreign transactions.
29
THREATS: New banks are coming in INDIA. This will increase the competition and this has to
consecrate on its marketing activities.
New banks are giving relaxations to its customers. So it will have to change its rules.
New banks are poaching the employees of this branch. So this bank has to retain its
employees with it.
New banks are spending more to capture the more customers so this bank will have to
change its policy of less spending or it will have to find new mean to retain its
customers with it.
Benefits
Reduction in TAT (Turn Around Time)
SBI can now integrate and manage content, campaigns and merchandising to patrons via the Web
30
Streamlined product delivery and support processes with a single contact point on the Web Site
offers a one-stop-shop for customers' needs
There were hiccups as various centres had problems connecting to the CRM portal, which have been
solved. They are using multiple types of connectivity, leased lines that terminate at the central data
centre in Mumbai, broadband connections, dial-up connections, telephone lines, etc. The type of
connectivity depends on the number of users in that particular branch and the kind of work being done
there. They have there mail server and other functionalities on the portal too. The development tool,
WebLogic Workshop, is Java-based, allowing people at SBI to develop and customize applications at
a faster pace. Applications running on the system permit the management of content, merchandise and
campaign-related details. The company has even moved its internal applications to the portal. Thus,
even when a staff member is working internally, he is working with an interface of a browser/portal.
What used to be on a client/server environment is now on the portal..
Functions like cash management, proposal details and issuing policies all happen on the portal.
Having deployed WebLogic, SBI is able to run its cycle-all its processes right from claims processing
to CRM-on the portal. Some features of the system are load balancing, effective code deployment and
clustering support (24x7). Plans are afoot to use the portal for providing selfservice to customers,
partners and employees. One can just come in, log on to the portal, and access any kind of
information.
SBI implemented the system in a different manner. With this initiative, SBI has derived quite
a few benefits. For instance, it has been able to reduce the Turn Around Time (TAT).
Because of this initiative they could spot a few processes that would otherwise never be
realized. they have outsourced some routine work which was done centrally and was manual.
Now, irrespective of the location of the work, its done through the portal and they are able to
manage it better.
De-duplication pilot on a significant portion of the migrated Phase I data, numbering 3.3
million records
SBI is equipped to develop a blue-print for their Customer Quality Initiatives to create long-term
competitive advantage.State Bank of India (SBI), Indias largest financial services conglomerate has
contracted to implement Anti Money Laundering (AML) software AMLOCK from 3i Infotech Ltd .it
helps the bank in managing its government clients better. Cash@WillTM helps SBI improve revenue,
maximize profits, optimize costs, and establish efficient management systems to accelerate
growth.SBI is now using Nucleus Softwares Cash@WillTM for Drafts, Income Tax Refund Orders
(ITRO), Multi City Cheque (MCC) and Collections services. The implementation was done in a
phased manner where Payments and Collections modules implemented initially were subsequently
replaced by the newer version of Cash@WillTM. Nucleus' Cash@WillTM will power the cash
management product of State Bank of India. It supports the bank in handling of government business
like ITRO, SBI rights issue.. Nucleus Cash Management Solution Cash@WillTM built on new
generation technologies of Oracle empowers banks to offer their corporate customers optimized cash
management services, dramatically improving funds collection and inflow forecasting, payment
dispatch and funds utilization. It provides anytime, anywhere access to quality real-time consolidated
information and seamlessly supports multibank, multi-currency, multi-lingual transactions, ensuring
smooth flow of information and cash.
32
4) Cross Selling:
It refers to offering another product from the service offering of the bank to the customer
which he has not gone for. For example If customer has savings account with the bank then
they offer him a insurance, fixed deposits etc. This depends on the value of the customer to
the bank. Cross selling is not offered to every customer. It depends on how loyal the customer
is to the bank. The more business he gives us, the more are his chances of being special
services offered.
5) Feedback Forms:
The bank distributes feedback forms at all its branches. The customers feedbacks on the
service, technology used, employee behavior and promptness in solving customers problems,
are taken and they are analyzed. CRM helps to know the needs and wants of the customer.
So, on the basis of this company can decide which product to offer to which customer. It has
been observed that cross selling is the best weapon. It enhances the relationship value with
the customer. This satisfies the customer and that is the reason why the customer keeps on
coming again and again to the company. This helps in retaining the market share. Now ,the
satisfied customers help in the word- of mouth promotion of the bank, which eventually
increases our market share
33
Additional Features of CRM in SBI Bank: Most banks have their own databases but because
of the huge technological investments done by SBI the databases in all the branches are
integrated, which means they can be accessed from anywhere and at anytime.
.Different Channels and Services Offered by SBI Bank. Bank Branch, ATM, Phone Banking,
Internet Banking, , Mobile Banking, Call Centre. SBI Bank offers a host of products and
services to its clients, which include Deposits .Loans, Cards, Investments, Insurance, Demat,
NRI Services and Online Services etc.
34
services available and how to use them. Bank has to ensure the security of ATM cards and
credit cards etc.
Customer Data
A common problem many organizations share is integrating customer information.
When information is disparate and fragmented, it is difficult to know who the customers are,
and the nature of their associations or relationships. This also makes it difficult to capitalize
on opportunities to increase customer service, loyalty and profitability. For example, knowing
that other family members are also customers provides an opportunity to up-sell or cross-sell
products or services, or knowing that a customer uses several sources of interaction with a
supplier can also provide opportunities to enhance the relationship.
The creation and execution of a successful CRM strategy depends on close
examination and rationalization of the relationship between an organizations vision and
business strategy.Building toward a CRM solution and evaluating the use of customer data
requires analysis and alignment of the following core capabilities:
Prospecting
Selling
35
In case, excessive delay in resolving their problems is experienced, customers can contact the
helpline of the Local Head Office, under whose control the branch functions
I. State Bank of India strongly believes that a satisfied customer is the most important factor
for growth of its business. The Bank was the first in India to introduce a code of Fair Banking
Practices in India called Towards Excellence. The code reflected the commitment of the
Bank to provide Banking services of a high order to individual banking customers. The code
came into effect from October 1997 as part of the Golden Jubilee Celebrations of Indian
Independence. The Code was substantially revised in the year 2005 taking into consideration
the transformation in banking practices and customer service standards that have since taken
place.
II. In February 2006, Reserve Bank of India set up the Banking Codes and Standards Board
of India (BCSBI) as an independent autonomous watchdog to ensure that customers get fair
treatment in their dealings with Banks. The BCSBI has published the Code of Banks
Commitments to Customers (the Code) which sets minimum standards of banking practice
and benchmarks in customer service for banks to follow. SBI is a member of the BCSBI and
has therefore voluntarily adopted the Code as its Fair Practice Code in dealings with its
customers.
The
complete
copy
of
the
Code
is
available
at
http://www.bcsbi.org.in/Code_of_Banks.html
III. This document called the Citizens Charter of State Bank of India provides key
information on various facilities/services provided to customers in ordinary branches of State
Bank of India. The Code together with the Citizens Charter will thus ensure high standards
of accountability, responsibility and transparency in the Banks dealings with customers. The
Charter also provides comprehensive information on Banks Grievance redressal mechanism.
It also specifies the obligations on the part of the customers for healthy banker-customer
relationship.
IV. This is not a legal document creating rights and liabilities. The information on general
terms and conditions provided herein may not apply to special branches of the Bank like
Personal Banking Branches etc. (The information on services provided by these branches can
be obtained from the branches or the helplines of the respective Local Head office Centres).
Loans and advances may also have specific terms and conditions not mentioned in the
36
Charter. However, all terms and conditions will comply with the principles and commitments
undertaken by the Bank in the Code.
V. Copies of the Code and Citizens Charter will be available on request to all our customers
at our branches, administrative offices and at our web site. We will ensure that all our staff
members are aware of the commitments contained in these documents and faithfully
implement them.
VI. The Charter provides essential information on transactions relating to savings, current and
fixed deposit accounts, collections and remittances, grievance redressal etc. For further
details and complete information on terms and conditions of service visit our branches or
write to our Local Head Offices (addresses and contact nos. available on our website
www.sbi.co.in).
VII. Information given in the Charter is current as of March 31 2007. Information given is
subject to change/revision. The Bank will endeavour to update the information on the website
when changes are made but please contact the nearest branch/Zonal Office/Local Head Office
for the latest changes, If any.
VIII. We request all our customers to keep us informed of their experiences about the
customer services rendered at our branches and feel free to comment on the Code and
Citizens Charter. Your feedback will help us evaluate, improve and widen our range of
services. Your comments and feedback may be sent to the address given in paragraph VI
above.
channels to
The burden of disconnected legacy systems and disparate databases that store client
financial data.
The cost and complexity of meeting stringent government regulatory and client security
and privacy requirements.
The pressure on margins and growth prospects from increased competition.
The costs associated with retaining customers and developing customer loyalty.
Although CRM can help banking institutions efficiently manage their customers,
many banks fail to meld the concept into the prevailing work culture. But the high incidence
of CRM failure has very little to do with the CRM concept itself. Usually it's a case of the
banks failing to pay attention to customer data they already have.
A lot of banks underestimate the magnitude of CRM. They tend to treat it just like any
other application technology, without realizing that CRM, if done properly, is a strategic
initiative that touches all areas of an organization. According to CRM software firm People
soft, banks need to be aware of three key problems:
1.
38
Traditionally, banks have determined the success of any project or product mainly in
terms of internal business gauges such as return on investment, units sold asset growth, or
service level agreement measures. One exception to the typical practice of focusing solely on
internal data for gauging success is market share, or market performance. Interestingly, most
CRM practitioners quickly default to marketing and sales measures when asked about the
success of CRM implementations. The tendency to frame the discussion of CRM
measurements in terms of sales and marketing measures is completely understandable given
the phased nature of most CRM projects
2.
Customer profitability
Many banks use profitability as a key component in determining how to treat their
customers. But measuring profit in a bank is not an easy task. Many banks allow the use of an
accountant's approach to the measurement process. This means the accounting and finance
people are in charge of the process, resulting in textbook-accurate allocations that often do
not accurately reflect the activities they are intended to measure.
For example, most bank costs are step-fixed. This means they are neither purely fixed
nor purely variable, with the resource able to process only a finite number of transactions
before more investment is required. The way the step-fixed resources are allocated can
dramatically affect the resulting measurement of account level profitability.
3.
notion that 80 per cent of profits derive from 20 per cent of customers. This may be true, but
the use of incomplete or inaccurate cost information and unproven hypotheses on customer
buying behavior make this rule difficult to apply. One significant problem is that banks let
their customers use the bank's products and services in an unprofitable way.
By providing a lower level of service to these customers, the bank faces the danger of
driving them away to institutions that provide better service. Given the step-fixed nature of
39
bank costs as discussed, banks should not view losing unprofitable customers as the way to
improved profits.
CHAPTER-4
SUGGESTIONS &RECOMMENDATIONS
The research shows that the teller is the most crowded counter and always having
long queues, so teller should be increased.
Bank should also have to improve its infrastructure as customers feel inconvenience
in sitting and standing.
As e- commerce is going on increasing, many customers want this bank improve net
banking more.
Customers say that may be this public bank does not services more than private
banks but it can try to provide services as equal. . Pay attention for a long time to
only one customer with whom staff is dealing, as other customers are also waiting
and staff should understand we should not waste other customers valuable time
40
Banking hours should be increased .as the bank close the customers visit by
3:30p.m. Which is very incontinent to the customers?
As the cheque is not cleared in time due to lack of attention. So staff should pay
proper care that cheque should be credited in customers a/c in time.
CHAPTER -5
CONCLUSION
Banking can be mysterious for consumers and how they interact with their finances can be a
complex matter. The challenges faced by banks and their customers are many but the trick
lies in de-mystifying complex financial relationships.
Technical solutions deployed by banks today are flexible, user-friendly and meant to
facilitate specific workflow and requirements in implementation processes. In order to
simplify lives, banks have begun to implement end-to-end technologies through all
departments with the intention of removing human error from processes. Previously existing
41
manual environments could not have been adequate for future visions, growth plans and
strategies.
In this day and age, customers enjoy complete luxury in terms of customized technical
solutions and banks use the same to cement long-term, mutually-beneficial relationships. For
a bank to succeed in adopting a CRM philosophy of doing business, bank management must
first understand CRM as a holistic concept that involves multiple, interlocking disciplines,
including market knowledge, strategic planning, business process improvement, product
design and pricing analysis, technology implementation, human resources management,
customer retention, and sales management and training.
Turning the business strategy into actionable items is a difficult undertaking. For which
Customer Relationship Management works a magic wand.
CHAPTER-6
BIBLIOGRAPHY
WEBLOGRAPHY
www.crm.com
www.businessline.com
www.investopedia.com
www.scribd.com
42
JOURNALS
Sugnadhi.R.K. (2003), CRM, (New Age International Publishers), New Delhi
Gureja, Gopal, K, Creating Customer Value, Tata Mc Graw Hill, New Delhi,
1997.
CHAPTER-7
APPENDIX
QUESTIONNAIRE
Dear Respondent,
The purpose of this project is to assess the effectiveness of Customer Relationship
Management (CRM) Practices adopted by State Bank of India. Please answer the
following questions. Needless to say, your response would be treated confidential and
would be used only for the purpose of study.
Name : -
Age : -
Account No :-
City : - ..
43
1- 3 yr
> 3 yr
Saving a/c
Fixed deposit
Mutual Fund
No
Q: 4 If yes, what are the various factors on which you are satisfied?
Co-operative Behaviour
Others
Q: 5 If no, what are the various factors on which you are not satisfied?
Less Co-operative Behaviour
OBC
PNB
HDFC
None
Strict Requirements
Others
Q: 9 Are you aware of the various services offered by the SBI Bank?
Yes
No
44
Phone Banking
Facilities through ATM (mini statement, bill
Q: 12 What are the various problems that you come to face while dealing with Bank?
ATM is not working
Rigid requirements
2)
Improvement in infrastructure
45