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CHAPTER – 1
CUSTOMER RELATIONSHIP MANAGEMENT
INTRODUCTION TO CRM
1.1 1.2 1.3 1.4
Introduction Meaning and Definition Objective of CRM CRM Architecture
Customer Relationship Management in Banks
CRM, or Customer relationship management, is a number of strategies and technologies that are used to build stronger relationships between companies and their customers. A company will store information that is related to their customers, and they will spend time analyzing it so that it can be used for this purpose. Some of the methods connected with CRM are automated, and the purpose of this is to create marketing strategies which are targeted towards specific customers. The strategies used will be dependent on the information that is contained within the system. Customer relationship management is commonly used by corporations, and they will focus on maintaining a strong relationship with their clients.
There are a number of reasons why CRM has become so important in the last 10 years. The competition in the global market has become highly competitive, and it has become easier for customers to switch companies if they are not happy with the service they receive. One of the primary goals of CRM is to maintain clients. When it is used effectively, a company will be able to build a relationship with their customers that can last a lifetime. Customer relationship management tools will generally come in the form
Customer Relationship Management in Banks of software. Each software program may vary in the way it approaches CRM. It is important to realize that CRM is more than just a technology. Customer relationship management could be better defined as being a methodology, an approach that a company will use to achieve their goals. It should be directly connected to the philosophy of the company. It must guide all of its policies, and it must be an important part of customer service and marketing. If this is not done, the CRM system will become a failure. There are a number of things the ideal CRM system should have. It should allow the company to find the factors that interest their customers the most. A company must realize that it is impossible for them to succeed if they do not cater to the desires and needs of their customers. Customer relationship management is a powerful system that will allow them to do this. It is also important for the CRM system to foster a philosophy that is oriented towards the customers. While this may sound like common sense, there are a sizeable number of companies that have failed to do it, and their businesses suffered as a result. With CRM, the customer is always right, and they are the most important factor in the success of the company. It is also important for the company to use measures that are dependent on their customers. This will greatly tip the odds of success in their favor. While CRM should not be viewed as a technology, it is important to realize that there are end to end processes that must be created so that customers can be properly served. In many cases, these processes will use computers and software. Customer support is directly connected to CRM. If a company fails to provide quality customer support, they have also failed with their CRM system. When a customer makes complaints, they must be handled quickly and efficiently. The company should also seek to make sure those mistakes are not repeated. When sales are made, they should
The operational aspect of the architecture deals with the concept of making certain processes automated. 4 . The collaborative aspect of CRM deals with communication between companies and their clients. Each one of these elements are critical for the success of a CRM system. and these are collaborative. and when they do this proficiently. The architecture of CRM can be broken down into three categories.Customer Relationship Management in Banks be tracked so that the company can analyze them from various aspects. A company must learn how to use all three properly. It is also important to understand the architecture of Customer relationship management. it will become more important for them to use successful Customer relationship management techniques. operational. As more businesses continue to compete on a global level. and analytical. they will be able to build strong customer relationships and ensure their profits for a long period of time. The analytical aspect of CRM architecture deals with analyzing customer information and using if for business intelligence purposes.
Customer Relationship Management in Banks CRM OVERVIEW 5 .
It is about creating a sustainable competitive advantage by being the best at understanding. 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. and delivering. technology and business processes. development. people. At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved in the business process. customer contact and sales promotional functions of an organization to function as a whole. communicating.2 MEANING OF CRM Customer Relationship Management is the establishment.” 6 . maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. DEFINITION OF CRM “Customer Relationship Management (CRM) is a co-ordinate approach to the selling process allowing the various operational.Customer Relationship Management in Banks 1. and developing existing customer relationships in addition to creating and keeping new customers.
Undoubtedly it is far harder to gain a new customer than to actually keep one. Some of the Commonly Established CRM Objectives are as follows: 1) Increase in Customer Service : Establishing customer loyalty as one of your top CRM goals is absolutely fundamental to CRM successful implementation . This objective cannot be achieved with the help of a few employees only. hiring.3 GOALS OF CRM can be a costly undertaking. 7 . Customer retention and brand loyalty is absolutely essential to ensure success. This ensures their continued patronage. Customers need to feel that they have received excellent service. Customer service is the pivotal point around which CRM revolves. This is by far one of the most essential goals of customer relationship management. etc. The only way in which a company can actually measure its success is if it establishes CRM goals prior to the implementation as in this way it is able to determine whether or not it has successfully implemented CRM. Implementing customer relationship management Organizations spend a lot of money scrutinizing vendors. consultant. Despite the fact that industries have different business aspects they share some common CRM goals. training employees. buying the right CRM software.Customer Relationship Management in Banks 1.For this task it is essential that the whole organization realize that they play a part in this goal.
sales promotions etc. This is almost always adopted by every organization. 3) Lowering Operating Costs: CRM goals also include the reduction of costs of operation. Throughout the process maximum reduction in costs should be adhered to in order to meet this particular CRM goal. CRM achieves this through cost reduction and customer retention. These reduced costs enable an organization to achieve greater efficiency. If cost reduction is management's objective then the CRM implementation should be carried out in such a way that this is achieved. If this is fixated as one of the goals of CRM. This goal should be clearly established and conveyed to all those involved in the CRM implementation process. This includes marketing campaigns. It is necessitated by the fact that increase in efficiency is required to boost success. This goal is fundamental as it boosts sales indirectly thereby increasing the profitability. Adequate CRM training achieves this goal. then it should be communicated to those involved. 4) Aiding the Marketing Department: Another goal of CRM is generally aiding the marketing department in all its efforts. This helps to maximize skills and thus reduce cost. 8 . CRM manages to reduce operating costs through a workforce management system.Customer Relationship Management in Banks 2) Increasing Efficiency: One of the most important goals of CRM is the increase in organization efficiency and effectiveness.
Customer Relationship Management in Banks 1. etc The Customer relationship management architecture can be broken down into three categories. the information related to this interaction will be automatically stored in a database.4 CRM ARCHITECTURE Customer Relationship Management (CRM) is an information industry term for methodologies. and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner. collaborative. The Enterprise marketing automation will give the company 9 . Examples of business processes that are connected to operational CRM are marketing and sales. When a connection is made to a customer. Customer service automation. Operational CRM can further be broken down into three components. know what other products a customer had purchased. remind customers of service requirements. and customer service reps can access information. and Sale force automation. This database describes relationships in sufficient detail so that management. and the company can pull up specific information on that customer when it is needed. software. and these are operational. Each plays an important role in Customer relationship management and a company that wants to success must understand the importance of using these three components successfully. and analytical. In many cases. an enterprise builds a database about its customers. salespeople. match customer needs with product plans and offerings. OPERATIONAL CRM Operational CRM deals with the automation of certain business processes. These components are Enterprise marketing automation.
a company will build a stronger relationship with its customers. As the name suggests. As the name implies. This data will be analyzed so that the company can enhance its customer service capabilities.Customer Relationship Management in Banks information about the business climate. 10 . Enterprise marketing automation deals with strategies a company can use to strengthen their marketing tactics. Analytical CRM can be an important tool for fraud prevention and detection. In addition to building stronger relationships with customers. By enhancing its customer service capability. and accounting management. Many companies will also automate processes such as allowing customers to access their accounts. A number of companies will use the data they've collected and analyzed to cross-sell products to their customers. Customer service and support will automate specific processes that are connected to service. ANALYTICAL CRM The next important part of CRM architecture is Analytical CRM. as will as trends within the industry and other important variables. and it will also provide them with crucial data on their competitors. An example of this could be item returns or customer complaints. Sales force automation will be responsible for automating some of the company's sales task An example of tasks that SFA would automate is demographics. Once the customer makes a call. A number of corporations will use call centers to store data on their customers. the customer service representative can provide them with relevant information. as well as retaining customers that may normally switch to another company. Analytical CRM can also be used to provide important information to customers within a short period of time. There are a number of common ways that Analytical CRM is used to achieve this. customer needs. Analytical CRM deals with analyzing data that is collected by the company.
Analytical CRM is also important when it comes to both product development and risk management. Collaborative CRM will give companies a powerful form of communication that will utilize multiple technologies. and profits in order to find any patterns that are not consistent. This information can be used to strengthen interactions. Collaborative CRM will allow the company to provide them with useful information. 11 . The goal of CRM is to find out what customers need. they can collect and analyze information. Collaborative CRM is important because it places an emphasis on the interactions that a company will make with its customers. These interactions could be personal. The company may need to alter its strategies or methods based on the information that is analyzed through this process.Customer Relationship Management in Banks It can analyze the patterns of sales. a company can become highly successful. and to make sure those needs are filled. inventory. At the highest level. Once a company is making interactions with their customers. When interactions are made with customers. It is important to realize that Analytical CRM is an ongoing process. When this done. CRM should be an important part of all interactions that a company makes with its customers. or they could come through mediums such as the telephone or the Internet. It will also be responsible for providing services over the Internet so that the costs of the service can be reduced. COLLABORATIVE CRM The third important aspect of CRM architecture is Collaborative CRM.
Customer Relationship Management in Banks CRM ARCHITECTURE 12 .
2 CUSTOMER RELATIONSHIP MANAGEMENT IN BANKS 2.Customer Relationship Management in Banks CHAPTER .1 Introduction 2.3 Need of CRM in banks 2.4 CRM Strategies 13 .2 Objective of CRM in banks 2.
but it will add customer loyalty to the business. CRM--A POWERFUL TOOL CRM is a powerful management tool that can be used to exploit sales potential and maximize the value of the customer to the bank. 14 . Competition in the financial services industry has intensified in recent years. customers can easily switch banks. Consequently.Customer Relationship Management in Banks 2. Banks need to leverage effectively on their customer relationships and make better use of customer information across the institution. while technology has also reduced barriers to entry for new customers. customers have more power in deciding their bank of choice. This strategy may not increase a business's profit today or tomorrow. keeping existing customers. IT and accounting.1 INTRODUCTION Today. 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. CRM integrates various components of a business such as sales. Many bank customers prefer using ATMs or a website rather than visiting a branch. is a critical concern for banks. Poor customer satisfaction will lead to a decline in customer loyalty. as well as attracting new ones. marketing. Generally. Customer satisfaction is an important variable in evaluation and control in a bank marketing management. and given the extended offerings from the competitors.
The collected data may flow between operational systems (such as sales and stock systems) and analytical systems that can help sort through these records to identify patterns. make call centres more efficient. The core objective of modern CRM methodology is to help businesses to use technology and human resources to gain a better view of customer behavior. banks may keep track of a customer's life stages in order to market appropriate banking products. Banks can develop customer 15 . For instance. simplify marketing and sales processes. As an example. thereby increasing the value of the Customer’s business. With this. CRM AND BANKS One of the banks' greatest assets is their knowledge of their customers. call centres. CRM produces continuous scrutiny of the bank's business relationship with the customer. marketing and advertising. where and how this data is stored and how it is currently being used. identify new customers and increase customer revenues. Although CRM is known to be a relatively new method in managing customer loyalty. banks may interact with customers in a countless ways via mails. such as mortgages or credit cards to their customers at the appropriate time. a business can hope to achieve better customer service. Business analysts can then browse through the data to obtain an indepth view of each customer and identify areas where better services are required. Banks can use this asset and turn it into key competitive advantage by retaining those customers who represent the highest lifetime value and profitability. emails. it has been used previously by retail businesses for many years. cross-sell products more effectively. The next stage is to look into the different methods customers' information are gathered.Customer Relationship Management in Banks In the long term.
electronic banking and call centres. call centres will evolve to encompass more than just cost reduction and improved efficiency. CRM is not a new phenomenon in the industry. which. to be used for the delivery of existing products and services. Over the years. especially in developing call centres. banks have invested heavily in CRM. kiosks. in the past. were designed to improve the process of inbound calls. ATMs.Customer Relationship Management in Banks relationships across a broad spectrum of touch points such as at bank branches. more than 80 per cent of all US banks will develop their call centres as alternative delivery channels and revenue centres. a bank needs more than the ability to handle customer service calls. internet. It needs a comprehensive CRM strategy in which all departments within the bank are integrated. In future. 16 .But to be successful. According to Gartner Group.
the technology. along with human resources of the banks. To build this momentum banks are focusing on Customer relationship management initiatives to improve • Customer satisfaction and loyalty 17 . The basic steps are: • • • • Attracting present and new customers Acquiring new customers Serving the customers Finally.2 OBJECTIVES OF CRM IN BANKS CRM. retaining the customers In today's increasingly competitive environment. The main areas of focus are as the name suggests: customer. maximizing organic growth through sales momentum has become a priority for Banks and Financial institutions. enables the banks to analyze the behavior of customers and their value.Customer Relationship Management in Banks 2. 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 centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively • • The CRM processes should fully support the basic steps of customer life cycle. relationship.
For example. many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. simplify marketing and sales processes. for instance. Solid CRM systems link up each of these points. call centers. For CRM to be truly effective. an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. mobile sales force staff and marketing and advertising efforts. cross sell products more effectively.Customer Relationship Management in Banks • • • • • Customer insight/ 360º view of customer Speed to market for products and service Increase products-to-customer ratio Improve up sales and cross sales Capitalizing on New market opportunities The idea of CRM is that it helps businesses use technology and human resources gain insight into the behavior of customers and the value of those customers. where and how this data is stored and how it is currently used. If it works as hoped. discover new customers. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for 18 . Web sites. help sales staff close deals faster. make call centers more efficient .It doesn't happen by simply buying software and installing it. may interact with customers in a myriad of different ways including mail campaigns. Next. One company. the organization must look into all of the different ways information about customers comes into a business. and increase customer revenues . brick-and-mortar stores. a business can: provide better customer service.
6) Service and support records. 4) Account information. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. 3) Sales and purchase data. 8) Web sales data. following data should be collected to run process engine: 1) Responses to campaigns. 5) Web registration data. In CRM projects. 7) Demographic data. 19 . 2) Shipping and fulfillment dates.Customer Relationship Management in Banks patterns.
Customer Relationship Management in Banks 2. It is a sound business strategy to identify the bank’s most profitable customers and prospects. keep in tough with the customer. discretionary decision making.3 NEED OF CRM IN BANKS Bank merely an organization it accepts deposits and lends money to the needy persons. relationship management could be defined as having and acting upon deeper knowledge about the customer. In banking sector. helping the customers to avail online and mobile banking etc. timely announcement of new services. It includes issuance of cheque and cards. Huge growth of customer relationship management is predicted in the banking sector over the next few years. This paper deals with the role of CRM in banking sector and the need for it is to increase customer value by using some analytical methods in CRM applications. ensure that the customer such as how to fund the customer. Banks are aiming to increase customer profitability with any customer retention. ensure that the customer gets what he wishes from service provider and understand when they are not satisfied and might leave the service provider and act accordingly. pricing. 20 . monthly statements. and devotes time and attention to expanding account relationships with those customers through individualized marketing. get to know the customer. but banking is the process associated with the activities of banks.
it is the time for taking ideas from customers to enrich its service. adopting mobile request etc are required to keep regular relationship with customers. issuing credit and debit cum ATM card. Hence the bank has to implement lot of innovative CRM to capture and retain the customers.Customer Relationship Management in Banks CRM in banking industry entirely different from other sectors. The private sector banks in India deployed much innovative strategies to attract new customers and to retain existing customers. CRM in banking sector is still in evolutionary stage. it is possible if the performance is at satisfactory level. This has resulted in the adoption of various CRM initiatives by these banks. The present day CRM includes developing customer base. If the base increased. Hence asking reference from the existing customers can develop theirclient base. making timely information about interest payments. which needs to create the trust among the people. The bank has to pay adequate attention to increase customer base by all means. There is a shift from bank centric activities to customer centric activities are opted. The use of CRM in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by the bank in today’s competitive milieu. creating awareness regarding online and e-banking. STEP TO FOLLOW 21 . because banking industry purely related to financial services. the existing clients can recommend others to have banking connection with the bank he is operating. the profitability is also increase. maturity of time deposit. Establishing customer care support during on and off official hours.
4 CRM STRATEGIES 22 . CRM goes beyond the transactional exchange and enables the marketer to estimate the customer’s sentiments and buying intentions so that the customer can be provided with products and services before the starts demanding.Customer Relationship Management in Banks The following steps minimize the work regarding adoption of CRM strategy. Customers are the backbone of any kind of business activities. maintaining relationship with them yield better result. 2. maintaining and enhancing customer relationship in multi service organizations. 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 Customer Relationship Management is concerned with attracting.
The patterns of customer behavior and attitude derived from this information enable the banks to effectively segment customers on predetermined criteria. These organizations use data warehousing and data mining technologies to learn from the millions of transactions and interactions with their customers. in the financial sector.Customer Relationship Management in Banks This is a new way of thinking for many banks with thousands. and to anticipate their needs. early beneficiaries of successful CRM strategies have been the banks. Managing customer relationships successfully means learning about the habits and needs of your customers. Customer Behavior Patterns For example. Detailed customer data can provide answers to the following questions: • Which communication channel do they prefer? 23 . anticipating future buying patterns and finding new opportunities to add value to the relationship. even millions of customers.
CRM applications provide functionality to enhance customer interactions. support crossselling and customer retention programs and enables the staff to understand how to maximize the value of each customer’s interaction. Each bank should seek a niche on which to develop its CRM strategy. Another company may be very good at targeting profitable customers. knowing that other family members are also customers provides an opportunity to up-sell or cross-sell products or services. When information is disparate and fragmented. The creation and execution of a successful CRM strategy depends on close examination and rationalization of the relationship between an organization’s vision and 24 . Banks known for its high level of customer service might use this characteristic as a starting point for implementing a CRM application. Customer Data A common problem many organizations share is integrating customer information. This also makes it difficult to capitalize on opportunities to increase customer service.Customer Relationship Management in Banks • • What would be the risk of leaving the bank to go to the competition? What is the probability the customer will buy a service or product? This knowledge assists financial institutions with CRM solutions in place to develop marketing programs that respond to each customer segment. it is difficult to know who the customers are. and the nature of their associations or relationships. or knowing that a customer uses several sources of interaction with a supplier can also provide opportunities to enhance the relationship. loyalty and profitability. For example.
there is a general movement towards “refocusing on he customer” for the “post-financial” crisis phase. The current economic context and financial crisis has most probably led many financial services institutions to refocus their CRM strategies with the customer relationship being more than ever the key to profitability of a retail activity. Here are some global banking institutions that have deployed CRM Customer Relationship Management systems. business processes and technology. their CRM strategy and their goals. to create differentiation and excellence in service to customers. and to perform all of these functions better than its competitors.Customer Relationship Management in Banks business strategy. These institutions have to design a new approach to regain and reassure customers. 25 .Building toward a CRM solution and evaluating the use of customer data requires analysis and alignment of the following core capabilities: • • • • • • • Customer value management Prospecting Selling Collection and use of customer intelligence Customer development (up-selling and cross-selling) Customer service and retention Protection of customer privacy Successful CRM implementations result from the capability of the organization and its employees to integrate human resources. Even if they have only started building a “how to win back trust" strategy.
which is time-consuming. Retrieving customer data to support targeted marketing activities in this environment has traditionally involved sorting hard copy by hand. support consistent message Irrespective of whether it is a public sector bank or a private sector bank. branch. and central office. a regional rural bank or a foreign bank all banks commonly store details of tens of thousands of customers and prospects .Customer Relationship Management in Banks Global Banks Bank of America CRM Strategy Provide service representatives with 360-degree view of customer relationship for corporate and retail banking Segment customer base into six different groups based on demographics and banking behavior Deploy CRM system across branch network.both in a corporate database and in discrete documents on the desktops of individual bank staff. integrating with central office. cross-sell BNP Paribas Societe Generale Improve customer experience. and increasingly cost-prohibitive. inaccurate. 26 . link 80 banking applications to support unified view of customers Goal Improve customer experience. link multiple customer databases Integrate call center. maximum lifetime value Improve customer experience. retention FleetBoston Attain cross-sell revenues.
to take full advantage of their valuable customer data.4 CRM.3 Implementation of CRM in Indian Banks 27 3.Customer Relationship Management in Banks Hence the banks devise software. considerable increase in the speed of the marketing campaign planning process.1 Introduction 3.2 Importance of CRM in Indian Banks 3. It also provides a way to quantify a campaign's success and aids in planning future marketing strategies.A new mantra in Indian banking 3. CHAPTER – 3 CRM IN INDIAN BANKS 3. which would mitigate this task of customer relationship management solution. better work flow tracking and management.5 CRM Principles . greater cost efficiency with improved ROI. easy monitoring of multiple marketing campaigns and improved workflow management.
the wave of deregulation of early 1990s has created heightened competition and greater risk for banks and other financial intermediaries. In India also. multiple delivery channels for customers and faster resolution of miscoordinations. 28 . The deepening of technology has facilitated better tracking and fulfillment of commitments. the banking industry around the world has been undergoing a rapid transformation. The cross-border flows and entry of new players and products have forced banks to adjust the product-mix and undertake rapid changes in their processes and operations to remain competitive.1 CRM IN INDIAN BANKS In recent years.Customer Relationship Management in Banks 3.
To address the challenge of retention of customers. the bank products were bought in India and not sold. With the entry of new players and multiple channels. error free and convenient for the customers. especially those in the public sector lack are the marketing attitude. The success of such a model depends upon the approach adopted by banks with respect to customer data management and customer relationship management. and improving customer service-related processes so that the services are quick. What is needed is the effort on their part to improve their service image and exploit their large customer information base effectively to communicate product availability. This makes it imperative that banks provide best possible products and services to ensure customer satisfaction. they face a fundamental problem. customers (both corporate and retail) have become more discerning and less "loyal" to banks. They have been managing a world of information about customers . banks need to have very strong in-house research and market intelligence units in order to face the future challenges of competition. Achieving customer focus requires leveraging existing customer information to gain a deeper insight into the relationship a customer has with the institution. Marketing is a customer-oriented operation. Marketing is a question of demand (customers) and supply (financial 29 . Indian banks have expanded to cover a large geographic & functional area to meet the developmental needs. What our banks. etc. especially customer retention. Over the years. Though this offers them a unique advantage. location. The top concern in the mind of every bank's CEO is increasing or at least maintaining the market share in every line of business against the backdrop of heightened competition. They have a close relationship with their customers and a good knowledge of their needs.Customer Relationship Management in Banks Unlike in the past. requirements and cash positions. the banks today are market driven and market responsive. there have been active efforts in the banking circles to switch over to customer-centric business model. During the period of planned economic development.their profiles. Furthermore.
banks world-over have re-engineered their organizations to improve efficiency and move customers to lower cost. As is proved by the experience. to advise on and sell new financial instruments like consumer loans. customer services through various delivery channels). more efficient channels. Both demand and supply have to be understood in the context of geographic locations and competitor analysis to undertake focused marketing (advertising) efforts. etc. Customer-centricity also implies increasing investment in technology. our banks need to transform their branches from transaction processing centers into customer-centric service centers. banks are now realizing that one of their best assets for building profitable customer relationships especially in a developing country like India is the branch-branches are in fact a key channel for customer retention and profit growth in rural and semi-urban set up. The banks need to ensure through 30 . However. Throughout much of the last decade.Customer Relationship Management in Banks products & services. to maximize the value of this resource. There is a growing realization among Indian banks that it no longer pays to have a "transaction-based" operating model. The biggest challenge our banks face today is to establish customer intimacy without which all other efforts towards operational excellence are meaningless. automated channels. such as ATMs and online banking. Focusing on region-specific campaigns rather than national media campaigns would be a better strategy for a diverse country like India. There are active efforts to develop a relationshiporiented model of operations focusing on customer-centric services. insurance products. mutual fund products. But this need not be the case. Branches could also be used to inform and educate customers about other. This transformation would help them achieve bottom line business benefits by retaining the most profitable customers.
The banking industry world over is being thrust into a wild new world of privacy controversy. however. rather than from new customers. It must be noted. Data warehousing can help in providing better transaction experiences for customers over different transaction channels. This is because a major chunk of income for most of the banks comes from existing customers. can help significantly in improving customer satisfaction levels. Customer relationship management (CRM) solutions. But to capture them. that customer-centric banking also involves many risks.two areas which are crucial for banks' future. These innovations promise huge benefits.Customer Relationship Management in Banks their services that the customers come back to them. It must be remembered that customer privacy issues threaten to compromise the use of information technology which is at the very center of e-commerce and customer relationship management . This can help a lot in improving service levels and finding new business opportunities. if implemented and integrated correctly. The banks need to set up serious governance systems for privacy risk management. The critical issue for banks is that they will not be able to safeguard customer privacy completely without undermining the most exciting innovations in banking. 31 . Data mining helps banks analyses and measure customer transaction patterns and behavior. financial services companies and their customers will have to make some critical tradeoffs. This is because data warehousing helps bring all the transactions coming from different channels under the same roof. both for customers and providers.
improved the balance-sheets of all banks irrespective of their core performance. For them an unexpected bonanza came from government bonds in which most were hugely invested.Customer Relationship Management in Banks 3. when the banking sector was opened up. like manna from heaven. the era of lazy banking is soon to end.2 IMPORTANCE OF CRM IN INDIAN BANK For long. So banks had a windfall doing almost nothing. And to their credit. The bond profits. the Reserve Bank of India's moves to cut aggressively the interest rates after 1999. they survived by adapting quickly to the new rules of the game. 32 . However. The mesh of rules that propped up the Indian banking industry is now being dismantled rapidly. protected by regulations that did not allow free entry into the sector. These banks ruled the roost. Many managed to post profits. pushed up the prices of bonds. Indian banks had presumed that their operations were customer-centric. simply because they had customers. Ironically.
India will see foreign banks come in. It is probably easier to say what CRM is not. it is imperative that Indian banks wake up to this reality and re-focus on their core asset — the customer. Increasing competition. The goal of CRM is to manage all aspects of customer interactions in a manner that enables banks to maximize profitability from every customer. CRM is variously misunderstood as a fancy sales strategy." What is CRM. As one of the most attractive emerging market destinations. It is none of these. deregulation. an expensive software product. Customer Relationship Management (CRM) in the Indian banking system is fundamental to building a customer-centric organization. create. Therefore. Customers. one of the least clearly defined business acronyms. what with more freedom to come in. and the internet have all contributed to the increase in customer power. CRM has also become a misnomer for a range of solutions from IT vendors. CRM systems link customer data into a single and logical customer repository. each providing its own spin on the idea. or even a new method of data collection. A greater focus on Customer Relationship Management (CRM) is the only way the banking industry can protect its market share and boost growth. and what will it deliver to the banks? CRM is. CRM in banking is a key element that allows a bank to develop its customer base and sales capacity.Customer Relationship Management in Banks According to a RBI road-map. faced with an increasing array 33 . grow and acquire. India will have a competitive banking market after 2009. and satisfy customer needs. CRM would also make Indian bankers realize that the purpose of their business is to "create and keep a customer" and to "view the entire business process as consisting of a tightly integrated effort to discover. probably. Unfortunately. as there is no single definition for it.
While this may sound quite straightforward. For CRM to be truly effective. Then and only then. technology. people. 34 . activities and culture to improve his satisfaction of service and. and processes. people. It does not happen simply by buying the software and installing it. for large organizations it can be a mammoth task unless a gradual step-by-step process is adopted. in turn. and transparency in dealings. maximize the profits for the organization.Customer Relationship Management in Banks of banking products and services. and technology and business process. one of the best ways of launching a CRM initiative is to start with what the organization is doing now and working out what should be done to improve its interface with its customers. CRM is a simple philosophy that places the customer at the heart of a business organization’s processes. Banks can turn customer relationship into a key competitive advantage through strategic development across a broad spectrum. Above all. attractive returns. are expecting more from banks in terms of customized offerings. A successful CRM strategy aims at understanding the needs of the customer and integrating them with the organization’s strategy. ease of access. Therefore. Retaining customers is a major concern for banking institutions which underscores the importance of CRM. This book examines issues related to changing banking industry in India and the challenges in CRM. should it link to an IT solution. it requires the realization that the CRM philosophy of doing business should be adopted incrementally with an iterative approach to learn at every stage of development. it requires a well-thought-out initiative involving strategy.
recruit and equip employees to deliver and increase customer value. It is necessary to understand who customers are and what they value. banking customers are becoming more and more dynamic 35 .3 IMPLEMENTATION OF CRM IN INDIAN BANKS Although CRM as a concept is of recent origin its tenets have been around for sometime.Customer Relationship Management in Banks 3. With the advancement of banking technology and computerization and networking of bank branches. select customer carefully. But the fact remains that implementing customer relationship management is not easy. There are really very few organizations that are actually optimizing customer experiences at all points of contacts. and constantly refine your value proposition to ensure customer loyalty and retention (Forsytyh 1997 and Goldenberg 1998). design effective sales channels and customer touch points. Field officers in the banks have always promoted close relation-ship with customers. but the focus on customer orientation rather than product orientation as a commitment has been on the Indian banking scene for nearly a decade. design products and services that deliver the desired value.
The development of the Internet is further adding to this trend and the whole market becomes trans-parent and customers are in a position to move easily from one bank to another. Another problem generally faced by a bank in implementing CRM is resistance to change. which aims at retention of the old customers and their bringing in new customers. the Internet. CRM system can open up new channels of delivery. To offer better and extended services to custom-ers new technology platforms are being created through huge investment in Information Technology in banking sector. In such a situation. Personal management of relationship is extended to business customers and high value personal customers and automated relationship management to lower margin massmarket segments. The recent development in this field is the introduction of CBS (Core Banking Solutions). A CBS helps in centralizing the transactions of branches and different banking channels and the customers start banking with the bank instead of at different branches. which are most cost effective. the telephone and Automated Teller Machines or ATMs). These different approaches are adopted depending on the value of relationship with the customer. As such nowadays a customer is called a customer of the bank rather than of a branch. According to an estimate. customer satisfaction is the key to bank marketing. CRM deserves differential treatment to different class of customers at times. We can cite example of the Internet and call centers. The banking industry is passing through a radical transformation. cost per transac-tion through these modes can be reduced by 90 per cent when compared to cost of transaction at branch. from a 36 . Service can be given to customers either personally through individuals such as customer service manager or the process can be automated by using computers. This is the only way to offer seamless transactions across different channels (branches.Customer Relationship Management in Banks and less loyal in their behaviour.
37 . perceptions and behaviour. the mindset of the employees has got to be changed in the development of right attitude. advancement in technology and a lot of other developments. Implementation of CRM in Indian banking is still in its initial stage and has to go a long way to develop and raise it to the global standards. A change denotes making things in a different manner. It should be planned properly. expectations. skills. It requires two things: Firstly. a regulated economy to a more liberalized and open economy. the ability of the organization to adapt changes in the business environment is to be increased.Customer Relationship Management in Banks sellers market to a customers market. These complex changes are forcing the banks to change the way they do business. But the Indian banks including the public sector banks are coming in a big way to address this issue to remain competitive with their counterparts—the foreign and private sector banks. proactive and goal oriented. Secondly.
a sound understanding of the key principles. Over the years. 38 . Both the retention of old business as well as to search for new business. its theories and practices should be revisited and redefined to provide a road map to new ideas and techniques in the field. CRM is the only choice.4 Customers Relationship Management– A new mantra in Indian banking Nowadays banks have to work keeping in mind the position of the financial market and anticipate change in the market place and prepare themselves accordingly.Customer Relationship Management in Banks 3. This is the only strategic weapon to be pursued for excellence in the pursuit of performance and achievement. They have to make new resolutions to build further on their own strengths to explore new avenues of Customers Relationship Management. being the essence of modern banking. banking institutions have been feeling the pressing need of putting up greater thrust on this initiative for improving their operations and appearances. CRM.
during 200001.02. The demand for credit from the corporate sector is diminishing due to more efficient management of working capital. In the year 2001. availability of cheaper funds from other routes etc. But with the increasing competition of lowering interest rates by different banks. The demand for working capital will be in the declining stage in the years to come. working capital ratio had dropped to three per cent from a level of 13 per cent over the last five years in case of 4. they identify the retail sector and commit for considerable retail lending as a means to serve their ends. Further. According to the Centre for Monitoring Indian Economy (CMIE). the cycle further reduced to 14 days and became negative during 2002-03. After a lot of exercise and considerable thought. there is lack of investment demand in the market.000 selected manufacturing industries.Customer Relationship Management in Banks The FOCUS ON CRM The profitability of a bank depends to a large extent on its ability to deploy its fund in high yielding loan portfolios of their customers. These developments have led the banks to go in search of new business opportunities where they can put their resources and earn a reasonable margin to add to their bottom lines. Taking as a percentage on sales. interest spread is touching the low ebb every day. the working capital cycle of manufacturing companies fell to 21 days compared to 60 days a year ago. 39 .
more or less tried to capture this huge market. the opportunities for exploring the possibility of lending in this segment continues to be immense and all banks. With retail lending at levels far below those prevailing in other Asian countries. there has been a tremendous improvement in Non-Performing Assets (NPAs) due to introduction of certain new methodologies such as new foreclosure law. of late. the customers today has a wide array of choices which is increasing day by day with the rapid and exponential development of communication technology. India. Customer leadership is a concept to project the product or service of the firm the benchmark for the market (customers). This endeavor on the part of the banks is leading the customers in their process of information abundance and thereby acting as customer leader. particularly foreign banks and private sector banks. the Indian retail market was largely untapped. The establishment of ARC 40 .Customer Relationship Management in Banks Driving forces for retail lending There are several driving forces to support this move. Secondly. But there is another side to the coin. for years together. being a poor country. Then. personal counseling to make them aware of the facilities and opportunities available in the market. the Debt Recovery Tribunals and the provision of one time settlement. Banking is no exception to this reality. in an attempt to market tailor-made innovative products. the CDR mechanism. With this increased knowledge base and better information they are demanding more and more satisfaction and choosing to optimize the value of their money for goods and services. which visualize all competitive stimuli in term of benchmark product or service. TV advertisement.Thirdly. it is a matter of realization that the bottom 75 per cent of the consumer pyramid basically relates to the retail sector customers. Firstly. cell phone calls. With the entry of several players in the field. consumers are being supplied with abundant information through paper advertisement. it must focus its attention with tailor made products and services to meet their needs. and if one is looking at a growth opportunity. This had added momentum to the competition.
000 crore in 1997 to 60. Technology has developed to such an extent that the customers are in a position to take advantage of “AAA” banking. It will not be out of place to mention here that at the same time China’s mortgage grew by a CAGR of 113 per cent. Under the changed scenario of NPA management. Bank managers are not hesitating in disbursing new loans. but are to be repaid and the bank management is there to recover it. in the case of small and medium enterprises (SME) and farmers in many cases such loans have been roped in big companies to back them in default 41 . the Internet. CBS (Centralised Banking Solution) etc. another major force behind this retail revolution is technology involved in today’s banking.000 crore at the end of 2002 or at a compound annual growth rate (CAGR) of 32 per cent.Further more. Also. Indian mortgage market grew from around 15. Any where and Any how) banking through ATM. retail loans are considered to be safe and according to the managers of some eminent banks there is less risk involved in managing a fat retail portfolio. (Any time. Now a clear message has been ventilated in the community that bank loans are not for charity.Customer Relationship Management in Banks (Assets Reconstruction Committee) and enactment of Securitization Act have helped in a big way to liquidate a huge amount of unmoved loan being carried forward for years together. there is enough scope in the case of mortgage loan. Besides. According to a study. In addition.
improvement of customer 42 . A customer is a person or group of persons who receives the product or service—the final output of a process or group of processes. their requirements are determined. economy and effectiveness through reduction of sales cycle times and selling costs.Customer Relationship Management in Banks 3. Customer focus The first and foremost important guiding principle in CRM is customer focus. Who is a customer? This question is very fundamental.5 CRM PRINCIPLES The main principles of CRM can be grouped into seven guiding factors: 1. on the contrary. identification of new markets and channels for expansion. energy and cost after a thorough planning. The main thrust of CRM is to improve an organization’s efficiency. to a dissatisfied customer a product or service has no value. banks should ensure that clients are identified. A satisfied customer only assigns value to a service. So customer’s delight or customer’s satisfaction is the essence of any CRM program. But a dissatisfied customer always counsels his friends. A satisfied customer motivates his fellow members to go in for the service or product that he has already acquired. A customer is the final arbiter of quality. even if the concerned service or product has been designed with lot of effort. understood and met enhancing customers’ satisfaction. value and price of a product or service. and fellow members not to go to banks where his experience proved to be wrong or other-wise. As a part of this focus on customers.
it should be followed up by the relationship manager by patient hearing. When there is a slight chance of getting a business but the client is hesitating or in a fix. judgment and decision-making abilities are the main attributes of quality leadership. retention and thereby increasing profitability and market share of the enterprise. technology and business processes. (c) Proper respect should be extended to the customers. developing and providing desired products at afford-able cost. Proper value should be given to their feedback. Successful CRM 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. Leadership Persuasion. satisfaction. 43 . The following points may be found helpful in this regard: (a) It is to be communicated to all employees that all customers should be given a proper hearing and it should be supported from all levels. people. or not in a position to decide properly. 2. 1999). mild counseling and to stand by the side of the prospective client to help clear his doubts and to make him feel happy by realizing that he is going in the right direction and he is very right in choosing his requirements. (d) There should be proper re-action to the information and feedback provided by the customers in designing.Customer Relationship Management in Banks value. All relevant information should be collected from them with humble and polite approach. (Heygate. There must be total commitment for the enterprise towards this end. (b) Ways and means should be identified and practiced of getting and staying closer to customers.
4. revised and fine-tuned to meet the requirements. System approach Customer’s requirement is one level of commitment. reviewing and taking corrective action. (e) There should be in built control mechanism for ease of measuring. within the policy. often the output from one process directly forms the input to the next. If required delegation of authority and assignment of account-ability at various executive levels should be addressed. resource availability. For effective functioning of an organization. Proper attention should be given to the following points: (a) All processes should be de-signed keeping in view the requirements and desires of the customers. That level implies a system that is reactive and provides to customers what they want but the target should 44 . energies and time. In producing an output there may one single process or a group of inter-related processes. Process approach A process transforms an input into desired output by the use of resources. it has to identify and manage numerous linked activities with the help of different processes for accomplishing its goal. (d) All the processes should be properly integrated to meet the goal congruence and should not function at cross-purpose. (b) All processes should meet the legal and statutory requirements to perform the activity or deliver the product or service. (c) Time involved in processing should be minimum with least waiting time to the customers. strategy of the company.Customer Relationship Management in Banks 3. In case of inter-related processes.
Involvement of people The fundamentals of CRM bear the genes of customer relationship through involvement of people.. The total system as a whole should decide what product to make or what service to offer. Meeting Each sub-system may have its own goal but the goal and objectives of all sub-systems are to be integrated to achieve the overall goal. CRM is based on a system approach to management.e. Customer relation may be defined as that dimension of relationship marketing that seeks and ensures customer loyalty by fulfilling promises and continuing to satisfy customer’s wants and needs so that defection is zero. There may be one sub-system to acknowledge the customer’s order. another sub-system to comply with the complaints of the customers etc. The bank managers and staff must be in a position to exploit the concept of customer relationship completely. of the people and by the people. 45 . what markets and customers to target upon and similar other issues. i. Its primary objective is to increase value to customers on a continuous basis by designing and improving organizational processes and systems on a ongoing basis. CRM denotes the management of the entire system and is not confined to only one or the other sub-systems or functional departments. what should be the quality involved. the work-force at the disposal of the organization. financial relationship. social relationship and structural relationship. The whole gamut of CRM is for the people. but all directed to accomplish the goal— value to the customers. a separate one to deliver the product within the delivery schedule. what should be the price. 5. People involvement at all levels is essential for the success of a CRM program. It comprises of three levels of relationships.Customer Relationship Management in Banks be to achieve more and to exceed the customer’s expectation to accommodate future requirement and to build a cushion against the competitors’ attributes.
It ensures that any balance in your savings account above a certain amount. Drawing of money through ATMs instead of physical presence in the branch for withdrawal of cash through cheques or withdrawal forms may be sited as example. Rs 3. offer different services outside their for-mal activities. but focus should be directed to the customers’ wealth creation or value enhancement with the motto of earning through service. which will be swept back into your savings account. organization of loan mela on special occasions etc. which would help in data warehousing. the human resource management should focus on employee empowerment. A social relationship program revolves round a social bonding between company and its customers and establish brand loyalty. productivity linked reward. Bankers. say. As an example we can talk of a savings account that’s ‘fixed up’ to give you more interest. data mining and data analysis.000 automatically gets transferred to a fixed deposit to give you higher returns.Customer Relationship Management in Banks The main focus of financial relationship is frequency marketing programs based on financial incentives such as reduction of processing fees. when you need it. lower rate of commitment charges. nowadays. A bank should not concentrate its attention towards earning of profits only. A marketing relation with the middleman and interested groups is developed in an in-side-out manner mainly based on software. share the feelings and emotions of clients and even send clients flowers on birthdays and anniversaries. 6. The optimization of structural relationship lies in the replacement of physical resources by total service replacement. 46 . To obtain the full benefits of people involvement. zero defeat service oriented train-ing and total quality management. make house calls. Mutually beneficial customer relationship The relationship with the customer should be based on a mutually beneficial relation-ship.
which pays in the long run.000 to Rs 100. In a mature relation-ship. Wealthy individuals are in the habit of placing all sorts of demands on their private bankers and a bank has to respond to such requests not merely for income generation but as a gesture of goodwill and at times such activities add a consider-able percentage to a bank’s fee based income. Many of such activities are not profitable in terms of time and efforts spend by the bank. But in many instances. free personal accident insurance coverage along with fixed deposit scheme above a certain amount and above a certain term. Continual improvement Another objective of CRM is the efforts towards continuous improvement in the customer relationship through the provision of value added ser-vices at favorable 47 .three years of dealing with the customer. But generally it is found that earnings start after the first two.000 per an-num for a good customer. According to an estimate.Customer Relationship Management in Banks Sometimes. recognizing individual needs and offering a customized investment solution are high. Retention of customers and building a long lasting relationship is the main criteria under this concept. Banks are no more restricting their activities to deposit and advances. school fees etc. for the ease of their clients who are very busy and do not find time for such work. Banks have gone to the extent of booking cinema tickets. such as. other benefits are also extended. rather they work with the mot-to of offering ‘Integrated Total Package Solutions to all needs of a customer. paying utility bills. the expenses in terms of time. effort. a bank can earn Rs 35. such fee-based income is a regular feature and is very much crucial in today’s banking where interest spread is getting reduced due to competition and fee based income can increase the bottom line. But banks are carrying out such services for mutual benefits. 7.
system integration. The most effective way of improvement lies in innovation and change management. The major areas to be targeted are: (i) (ii) Improving the effectiveness of marketing. are to be automated and optimized with an aim to increase the efficiency and effectiveness of operations. (iii) Implementing a strategic analysis capability to support strategic decision making. (iv) The ability to deliver the increasing levels service demanded by customers.Customer Relationship Management in Banks cost. continually improve their quality and. human resource management etc.2 CRM Optimization 4. Business processes in the areas of finance. (v) Building a transparent communication system and employee participation to better define the needs of the customers and deliver the right services and products CHAPTER – 4 WORKING OF CRM 4. beat their competitors to the market place with a constant stream of innovative products and services.3 Rules and Regulations 48 . spontaneity and unpredictability.1 CRM Implementation 4. Organizations that maintain their flexibility. Implementing multichannel trigger driven marketing. will be the winners. Today’s successful organizations must stimulate and foster innovation and master the art of change.
The Right Way! 49 .1 CRM IMPLEMENTATION .Customer Relationship Management in Banks 4.
Customer Relationship Management in Banks CRM implementation differs from organization to organization but there are a few common steps one needs to follow to ensure a successful implementation. There are many factors that could influence the success of CRM implementation. Some of them are;
● Organization Objectives
Clear cut objectives are essential and they need to be communicated effectively to the entire organization. Business goals are absolutely essential and need to be clearly defined. Similarly goals of the CRM implementation and how it supports organization goals should also be intimated to employees. Let employees know how important CRM success is to the organization.
● Solution to Suit Business Objectives
A business needs to look for a CRM solution that fits its needs, not the other way around. This step is vitally important and spells success. When choosing a CRM solution every business organization has to ensure that it chooses a CRM solution that fits into the organizations requirements. It is wrong to try and adjust organization requirements to the chosen CRM solution. If this is done organization goals will not be achieved and the CRM process will have disastrous results.
● Focus on All Business Aspects
In most cases the technology will have less to do with the CRM success. Therefore it is important to focus as much importance on communication training and other aspects as much as the technology involved. It is important to involve management at several levels, focus on communication need and indulge in adequate training of the concerned employees throughout the
Customer Relationship Management in Banks organization. If these items receive a level of focus comparable to the technical system, CRM implementation stands a better chance of succeeding.
● Define the Business Problem
A business needs to clearly define the business problem see what benefits it wants to achieve and adopt the required measures. It is imminently important to clearly identify the business problem that the company needs to resolve. An organization needs to absolutely identify the desired benefits and make sure that the expected returns are generated at every stage. It is important to break down the entire process into smaller pieces that can be individually handled effectively.
● Establishing Proper Metrics
Since companies normally wait for a five year period to see a return on investment. Every organization has to compulsorily define performance metrics to ensure that it measures the return on investment adequately.
● Business Processes not Technology
In order to succeed at CRM all companies need to understand that it is not about technology alone but about business processes as well. While CRM changes a company's business processes technology supports the processes. Most businesses make the mistake of actually assuming that the CRM is only about technology alone. This hampers business process development.
● Implement Change
Most employees tend to stick with their old ways and are reluctant to adapt to changes, It needs to be understood that the implementation of CRM involves immense changes and employees need to adapt themselves to it.
Customer Relationship Management in Banks From the very beginning of the implementation employees will have to adopt new attitudes to help deliver the customer experience properly to customers. Organizations need to make sure that their employees are provided with sufficient training to ensure that they handle this aspect of the customer experience adequately and efficiently.
● Choose the Right Methodology
Decide whether to use the classical or modern methodology bearing in mind that ease of usage, cost effectiveness and efficiency need to be gained. This is an important step in the CRM implementation as it has a bearing on the entire process.
● Using Skilled Managers
Organizations need to make sure that they use the most highly skilled and experienced group of professionals possible. CRM aspects are complex and what is needed most is a team that has CRM expertise and business knowledge. The team should be adequately trained and sufficiently equipped both intellectually and technologically to carry out the CRM implementation successfully.
● Choose the Right Vendors
Companies need to know the vendors through looking at them from this perspective alone. This involves the process of scrutinizing the vendor and seeing whether or not the vendor can fulfill the requirements of the business. Only if this is possible can the vendor be selected. You may not find a vendor that basically fulfills every single objective but at least an organization will be aware of it.
● Ease of Usage
The entire objectives of the CRM process are hampered if the CRM choice is difficult to use. It is highly essential to ensure that the system speaks of ease of usage and the ability to be easily customizable. Employees implementing CRM and forming a part
CRM IMPLEMENTATION 53 . This is a step that needs to be taken at the time of choosing the CRM technology. It is imperative that the business ensure that the CRM software chosen is easy to use and implement not only by a few employees but by everyone using the system.Customer Relationship Management in Banks of the CRM process range from the mediocre level right to management and to the employee at the very forefront.
Customer Relationship Management in Banks
4.2 CRM OPTIMIZATION
Customer Relationship Management in Banks Simply implementing a solution intended to achieve organizational goals is not enough to achieve CRM success. The process should ensure that these goals are achieved. More importantly CRM optimization should be encouraged through the right practices, optimization of resources and the ability to adapt to change.
OPTIMIZATION Identifying CRM goals
Objectives need to be identified and CRM goals need to be fixed before embarking on a CRM project. Business processes need to be integrated with the CRM solution before actual implementation. The chosen solution should fit organizational objectives to the hilt.
Start a pilot project and set goals for the organization. Then go ahead with CRM implementation in phases to ensure CRM success. Phased implementation is always easier to implement and the rewards are higher.
The net result or the ultimate objective of the business process needs to be taken into consideration while implementing .The ability of the CRM solution to contribute to
Customer Relationship Management in Banks this has to be considered. If the objective is increasing overall profit or simply contributing to customer retention than this should be achieved by the CRM choice.
The CRM process sometimes gains department coordination and success but fails
to focus on the customer. Hence although companies may succeed internally they fail to achieve customer retention on account of unsatisfied customers.
What happens here is that information needs to be corrected before putting it into the CRM system so that bulk data is assessed, corrected and placed together so as to be easily assessable.
Since change is unavoidable and CRM is a continuous process, information becomes outdated very quickly. Changes required need to be implemented periodically.
CRM processes need to be suited to the customer needs. Adopting stringent rules that affect the customer due to its inflexibility will hamper the ability of the organization to find appropriate solutions for its customers.
Assessing data quality issues is essential. Companies need to measure data quality before embarking on a CRM implementation.
and consolidation. The need for outside resources has to be carefully studied and adopted if essential. Cost Restraints It is imperative to understand the existing problems customers are facing and not endeavor to find solutions that suit the companies budget alone. Hence the IT department needs to be incorporated in all respects Data Cleansing Since all information needs to be cleansed before it enters the system a data quality solution must be used from initial analysis to identification. This information should be available to every one in the organization. 57 .Customer Relationship Management in Banks Holistic Approach It is important to create a single holistic view about a customer with the collation of all the information available about him. CRM Consultants Outside resources need to be brought in if required. IT's Involvement Dynamic changes are possible only when sufficient technology is in place. cleansing. IT enables this as it facilitates change within the organization and enables it to adapt. An integrated view of the customer with entire company access is absolutely essential.
Customer Relationship Management in Banks Identifying CRM goals Objectives need to be identified and CRM goals need to be fixed before embarking on a CRM project. 4. Integration It is essential to actually collaborate the IT departments and the other departments. It is they who should initiate this and be involved in all aspects of its implementation.The chosen solution should fit organizational objectives to the hilt. Business processes need to be integrated with the CRM solution before actual implementation . Their combined efforts are essential for CRM success. CRM success is a sure result if this is implemented. Employee involvement It is important to get the customer facing employees personally involved in the activities of the business you can get many online jobs from CRM consultants.3 GUIDELINES FOR CRM 58 .
They need to be involved in order to assess business objectives. Potential users and if possible. they are the people who help engrain CRM usage into company culture. Communicate CRM initiatives to people in your company via directives. policies and training. set CRM strategy. If your teams know what is expected at the executive level then they can better understand and respond to customers. Basically. Here are some guidelines that you can follow before you embark on CRM implementation in your company. In fact CRM strategy is more about identifying critical relationships between business goals and CRM implementation strategy: business processes. involve key stakeholders Many CRM projects fail because key people are not involved in the project.Customer Relationship Management in Banks Customer Relationship Management (CRM) doesn't have to be difficult. Outline a CRM strategy Many people mistake implementing CRM to simply mean installing/using ‘software’. questionnaires and feedback meetings are useful ways of gathering information on customer expectations. make corporate policies and issue directives. customers should be involved to some extent to assess their expectations. Key sponsors need to be able to make financial and time commitments to ensure success. Develop a corporate ‘CRM culture’. surveys. people and IT 59 .
increasing numbers of customer referrals. Also. and so on. Marketing may want to increase leads per campaign. while Customer Support may want to implement a self-service knowledgebase for customers to reduce the number of support calls. Marketing and Customer Support. Sales Managers may want to get better pipeline and forecasting capabilities. as CRM is based around people. Set goals in key metrics areas like Sales. Customer Support may want to reduce issue resolution time. First. reducing sales admin time. It is about using appropriate methods and business processes to help improve your business relationships with your customers. You should prioritize those areas which are key process areas (kpas) or which are causing the most problems. Combine this with regular business problems and you can quickly lose focus of the main objective if you do not prioritize your CRM requirements. make comparisons with previous metrics and with competitors if possible. cost and missed opportunities for your business. cultural differences within your organization.Customer Relationship Management in Banks tools. understanding all of these more subtle points will also play a part in a more successful CRM implementation. you should consider social and organizational factors such as company structure. For example. politics. Define your CRM objectives and prioritize CRM requirements Every department within any organization has its own needs and sense of priority. resistance to change. sales metrics might be lowering lead to sales time. For example. you should measure key performance metrics in your company. increasing repeat business. 60 . reduce incoming phone support requests. roles / hierarchy and authority. increase efficiency of lead capture and segmentation.
61 . and if other systems require integration. where and when implementing a CRM tool will integrate/replace other tools/applications/processes. Integrate your current systems Look at the ‘big picture’. It is useful to identify key people responsible for each project task.Customer Relationship Management in Banks Start in areas which will be easiest and which will result in the highest reward for your business and highest level of buy-in from your users. assign people within your company who can liaise with a CRM Consultant and to identify key metrics and timelines for low risk/high reward areas.for example. complexity of each area. consisting of several mini projects that will move you toward the corporate CRM goals.g. or maybe your website e-commerce section or ERP/accounting system. a master plan. you should then develop a CRM ‘roadmap’. Develop a CRM roadmap Once you have a high-level vision from the previous steps and after you have identified and prioritized the areas which will give the most rewards most quickly. Outlook). and you will likely want to integrate/consolidate your calendaring/contacts system (e. A CRM will eliminate the need for traditional means of reporting Sales status and activities with Word/Excel . A CRM Consultant will be able to assist in analyzing your business processes and making recommendations on where the CRM can integrate or even replace your current systems. determine how. Other factors to consider are weaknesses compared with competitors. which help build momentum and enthusiasm from users.
Customer Relationship Management in Banks Research CRM vendors Learn about potential CRM vendors from their websites. You simply pay a monthly fee and start using it. With a roadmap in place and your requirements defined. Get an independent perspective from a CRM Consultant . Communication is critical 62 . Focus on your needs CRM software is complex. It needs to be. especially with independent advice from a CRM Consultant. you will be more able to decide upon worthy CRM software. A CRM Consultant can also assist in this area as they will be able to advise you which software on the market matches your business needs. Many CRM vendors offer 30-day free trials or limited function/limited user licenses for free. ‘Software as a Service’ or on-demand CRM is increasingly popular as it gives a short time to value and is less expensive to set up. Don't get sidetracked by the mind boggling number of features in CRM software. use that list and determine which vendor can best meet those needs. Don’t get a CRM which is a strong call centre oriented CRM if your main issue is in Sales.they have the experience of implementing CRM’s across multiple businesses and will know the sorts of problems you will face and how to overcome them. customer references and publications. customizing it as you go to suit your business. After determining your main business needs and priorities.
ongoing training and can make appropriate recommendations to make sure changing needs are addressed over time. be flexible. IT skills and learning preferences. If you use a CRM Consultant. the users of the software and the ones who will benefit. get feedback and implement solutions to make sure the CRM evolves with your business and customer needs. use the tool and evolve your business Use the CRM to log tasks. This will also speed adoption and produce benefits more quickly. process improvements and feature requests (there will be plenty) as well as project-related issues. customization requests. communicate plans and developments to your staff. Provide flexible training programs to accommodate different schedules. no matter what size your organization. get him/her to create regular newsletters or chair weekly/monthly status meetings depending on the scale of your implementation. Analyse CRM usage. Learn. after all. Invite key people to keep them all involved – they are. Report on the status on a regular basis. A CRM Consultant can help you by overseeing feedback.Customer Relationship Management in Banks Once CRM implementation begins. 63 .
Customer Relationship Management in Banks CHAPTER – 5 BENEFITS OF CRM 5.1 Benefits of CRM to Banks 5.1 BENEFITS OF CRM TO BANKS 64 .2 Benefits of CRM to customers 5.
Customer Relationship Management in Banks Despite the fact that in most banks profits sometimes fail. CRM induces bankers to know that they are required to maintain good relationships with their customers and should strive to retain them. They have come to understand the importance of hanging onto the customer and keeping him happy. What happens is that customers are often approached for the wrong products. It has long been the misconception that banks need not pay much attention to customer focus just because they had customers. Banking CRM software serves to increase the market share and boost growth in the banking industry. What happens in CRM banking solutions is that they change the way the employees think and mould them into customer conscious people. They are made to realize that the business process should consist of efforts to discover and satisfy customer requirements. The vast majority of banks now realize they need a customer strategy and are opting for CRM . Some banks even if they possess good customer relationships are unable to cross sell as they have not figured out who to target with what product/service. However the new millennium has resulted in banks and financial agencies rethinking their strategies and goals. Since the banking field now boasts of so 65 .Customer Relationship Management. They have realized that adopting a customer centric strategy is essential and needs to be compulsorily undertaken. The rules that once governed the banking industry have changed. they seldom pay attention to or adopt any customer strategy.
Banking CRM uses information and analytical tools to secure customer focus. 66 . It focuses on the existing data available in the organization and uses it to improve its relationship with customers. retention and profitability. With such phenomenal statistics it is but a surety that CRM banking solutions sales will soar in the coming years. Banking CRM understands the needs of the customer and integrates it with people. Banks that don't implement CRM will undoubtedly find themselves with lesser profitability coupled with a sharp decline in the number of customers. FOLLOWING ARE THE BENEFITS OF CRM TO BANKS: 1. The sector will also evidence an increase in expenditure of 14 percent each year. satisfy him and thus maximize the profits of the organization. resources and business rocesses. Statistics show that bankers will spend $7 billion on CRM. 2. Thus it is completely essential that banks implement CRM in order to secure this. CRM Banking Focuses on the Customer CRM manages to places the customer at the focal point of the organization in order to cater to his needs. The byproducts of CRM banking solutions are customer acquisition. technology.Customer Relationship Management in Banks much of technological innovations there has been a wide variety of innovations in CRM banking as well. 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.
They are just as much in need of CRM aid as the others. Merely assuming that banks that are considerably smaller in size have a better customer approach and are able to deal with their customers in a better manner is wrong. CRM Banking Boosts Small Banks Banking CRM software meets the needs of banks of all sizes in terms of attaining the required accuracy and understanding of customers. processes and technology.this will go a long way in satisfying and retaining them. 4. Bankers need a return on investment and it has been proved that increase in customer satisfaction more than contributes a fair share to ROI. 5. 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 67 . Centralized Information CRM banking solutions manage to clearly integrate people. Small banks on account of a limited amount of money have had to realize that a large contribution to profits is directly the result of good customer service. CRM makes sure that the bank delivers exactly what the customer expects. The main value of CRM banking lies in satisfaction and increased retention of customers. Satisfied Customers It is important to make a customer feel as if he / she is the only one .Customer Relationship Management in Banks 3.
allowing single point access to all the relationships the customer has forged with the bank. The solution ensures the bank’s marketing message is appropriately personalized and targeted towards the most suitable segment of prospects. 6. Aggressive Customer Acquisition CRM solution supports the creation of demand generation through multi-channel and multi-wave campaigns. Straight through processing abilities enhance reduction in turnaround and processing time. The multilingual Web-based single repository of information enables remotely located bankers to collaborate and transact seamlessly. with a keen focus on right-talk driven right-sell. 8. 9. After this segregation is done CRM easily enables banks to increase their communication and cross-selling to their customers effectively and efficiently. This along with robust customer analytics effectively supports true relationship banking. eliminating manual tasks and reducing process time. Improved Cross-sell Framework The solution presents a unified 360° view of the customer.Customer Relationship Management in Banks them focus on the importance of segregating these two and doing what is required to avail of the maximum returns. CRM solution also integrates with other white labeled solutions to facilitate contextual and personalized customer engagement. This optimizes marketing efforts and results in greater conversion of prospects 7. providing a robust framework for cross-sell opportunities. Increased Operational Efficiencies and Collaboration CRM solution supports business automation for processes and business activities. Lower Total Cost of Ownership (TCO) 68 . increasing output and enabling speedy completion of tasks.
Marketing Encyclopedia 69 . With a robust architecture and proven scalability. separate databases of savings account & credit card customers). with CRM the information is stored in a customer centric manner covering all the products of the bank. income levels and other related criteria. CRM integrates various channels to deliver a host of services to customers. 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. and execute targeted. banks can identify the most lucrative customers and customer segments. 10. (for e.g. Finacle CRM solution is future-proof and can be seamlessly integrated with other enterprise applications. Campaign Management Banks need to identify customers. tailor products and services to meet their needs and sell these products to them. Customer Information Consolidation Instead of customer information being stored in product centric silos. it ensures protection for the bank’s technology investments. while aiding the functioning of the bank. personalized multi-channel marketing campaigns to reach these customers and maximize the lifetime value of those relationships. 12.Customer Relationship Management in Banks A Web-based solution leveraging new-generation technologies. Based on these profiles. 11.
the bank is aware of the interaction. proposal templates and marketing collateral. Lead and Opportunity Management These enable organizations to effectively manage leads and opportunities and track the leads through deal closure. pricing and competitive information. This would make sales decision fast and consistent. Operational Inefficiency Removal CRM can help in Strategy Formulation to eliminate current operational inefficiencies. 360-degree view of company This means whoever the bank speaks to.Personalized sales home page CRM can provide a single view where Sales Mangers and agents can get all the most up-to-date information in one place. as well as internal training material. account. finance or support. 14. 13. and expense report information. 16.Customer Relationship Management in Banks Central repository for products. thus leading to enhanced customer satisfaction. sales presentations. news. irrespective of whether the communication is from sales. Removal of inconsistencies of data makes the client interaction processes smooth and efficient. 15. including opportunity. An effective CRM solution supports all channels of customer interaction 70 . the required follow-up and interaction with the prospects.
ICICI. Combining the behavior key figure and frequency to monetary acquisition analysis with a marketing revenue quota can optimize acquisition costs and cut the number of inefficient activities. CRM with business intelligence allows banks to assess customer segments. margins are eroding. Customers can be evaluated within a scoring framework. State Bank of India. which help them calculate the net present value (NPV) of a customer segment over a given period to derive customer lifetime value. and understand the true business value of their customers. CRM with Business Intelligence Banks need to analyze the performance of customer relationships. Reserve Bank of India. customers are becoming more demanding and the life-cycles of products and services are shortening dramatically. ATMs. ACC.Customer Relationship Management in Banks including telephone. National Stock Exchange and PepsiCo.2 BENEFITS OF CRM TO CUSTOMERS Customer relationships are becoming even more important for banks as market conditions get harder. e-mail. and face-toface contacts with bank personnel. Competition is increasing. And Business Intelligence players hope many more will follow su 5. IDBI. the online portals. Max Touch. With such knowledge. 17. uncover trends in customer behavior. It also links these customer touch points to an operations center and connects the operations center with the relevant internal and external business partners. fax. Data warehousing solutions have been implemented in Citibank. banks can efficiently allocate resources to the most profitable customers and reengineer the unprofitable ones. wireless devices. All these forces make it 71 .
from the initial stages to the establishment of a close. ► Service provisioning throughout the entire life cycle of the corporate customer. ► 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. CRM helps banks to provide lot of benefits to their customers. ► Companies that implement CRM make better relationships with their customers. such as alternative channels of distribution (internet and home banking). From customers’ point of view.Customer Relationship Management in Banks necessary for banks to intensify the relationship with their customers and offer them the services they need via the channels they prefer. ► Optimization of the use of bank resources. efficiency in correcting mistakes and friendliness and 72 . achieve loyal customers and a substantial payback. increased revenue and reduced cost. ► According to a study conducted in the sector of banking. long-term relationship with profitable clients. ► CRM when successfully deployed can have a dramatic effect on bottom-line performance. For example. ► Significant reduction in and limitation of operational costs through system automation and standardization. recommendations from others and advertising are not important selection criteria for banks. Lowe’s Home Improvement Warehouse. in a span of 18 months. important criteria are: account and transaction accuracy and carefulness. achieved a 265 percent return on investment (ROI) on its $ 11m CRM investment. some key benefits are as follow. price. convenience of location.
Eventually. making companies more effective and efficient: effective in targeting the right customer base with the right services via the right channels. Information about ‘who buys what and how much’ enabled the bank to have a commercial approach based on the client and not solely on the product.2 Methods of effective CRM implementation . For example. CRM results both in higher revenues and lower costs. ► Another study conducted in a European bank shows that with CRM. the bank was able to better satisfy and retain its customers. CRM. high-quality attributes of the product / service and differentiation proved to be the most important factors for customers. CHAPTER -6 CHALLENGES FOR CRM IMPLMENTATION 6. the bank was able to focus on profitable clients through efficient segmentation according to individual behavior.Customer Relationship Management in Banks helpfulness of personnel. Thus. Thus.1 Challenges faced by banks in successful Implementation of CRM73 6. those banks that are moving transactions from the more expensive channels to a less costly channel – like the call centre or Internet– are therefore able to save money. and efficient in doing this at the lowest costs.
Customer Relationship Management in Banks 6.1 CHALLENGES FACED BY BANKS IN SUCCESSFUL IMPLEMENTATION OF CRM 74 .
Customer Relationship Management in Banks The most pervasive challenges to effective customer knowledge include: ► The difficulty of obtaining a complete view of customers. ► The need to move away from disjointed. multichannel offering. ► The pressure on margins and growth prospects from increased competition. and inconsistent provide a cohesive. standalone. ► The costs associated with retaining customers and developing customer loyalty. ► 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. channels to 75 .
One exception to the typical practice of focusing solely on internal data for gauging success is market share. Traditionally. They tend to treat it just like any other application technology. banks have determined the success of any project or product mainly in terms of internal business gauges such as return on investment. Banks may find it hard to build the initial business case justification and then to prove the worth or success of their investment What makes the latter task even more difficult is the fact that the metrics that are best used to justify a significant IT investment are not always the most appropriate for evaluating ongoing success. But the high incidence of CRM failure has very little to do with the CRM concept itself. banks need to be aware of three key problems: 1. Measuring CRM benefits A key basic CRM challenge is establishing the measurement method.Customer Relationship Management in Banks Although CRM can help banking institutions efficiently manage their customers. When banks seek to justify the cost of their investment in CRM-related technology they usually focus on hard numbers. typically those related to decreased costs and increased sales. or market performance. In other words. A lot of banks underestimate the magnitude of CRM. the proponents look to justify the top-line expenses with bottom-line benefits. 76 . without realizing that CRM. if done properly. Usually it's a case of the banks failing to pay attention to customer data they already have. or service level agreement measures. According to CRM software firm People soft. units sold asset growth. is a strategic initiative that touches all areas of an organization. many banks fail to meld the concept into the prevailing work culture.
At completion of each phase of a project. with the resource able to process only a finite number of 77 . resulting in textbook-accurate allocations that often do not accurately reflect the activities they are intended to measure.Customer Relationship Management in Banks Interestingly. project leaders typically build into each phase of a CRM project demonstrable business benefits. the funding for CRM projects is also often phased. For example. business benefits are expected to accrue rapidly to the bank. Revenue generation--whether through sales or marketing improvements--is the preferred business benefit for CRM project sponsors. intricate IT projects when incremental revenue generation can be squarely identified. But measuring profit in a bank is not an easy task. This means they are neither purely fixed nor purely variable. 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. This means the accounting and finance people are in charge of the process. Since the majority of CRM projects are expensive multiphase and multiyear projects that often involve multiple technologies. most bank costs are step-fixed. CRM sponsors grant funding to project leaders at the completion of one phase and start of the next. it is far easier to continue funding large. 2 Customer profitability Many banks use profitability as a key component in determining how to treat their customers. Many banks allow the use of an accountant's approach to the measurement process. To ensure that the subsequent phases will get funding. most CRM practitioners quickly default to marketing and sales measures when asked about the success of CRM implementations. Not surprisingly.
By providing a lower level of service to these customers. 78 . the notion that 80 per cent of profits derive from 20 per cent of customers. 3 The 80-20 Rule Most banks make critical pricing decisions based on the so-called 80-20 rule.Customer Relationship Management in Banks transactions before more investment is required. This may be true. the bank faces the danger of driving them away to institutions that provide better service. banks should not view losing unprofitable customers as the way to improved profits. The way the step-fixed resources are allocated can dramatically affect the resulting measurement of account level profitability. 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. Given the stepfixed nature of bank costs as discussed.
Banks can earn more customer goodwill if they respond faster than the imposed deadline.Customer Relationship Management in Banks 6. banks will not annoy customers with unwanted marketing offers. Develop the right contact strategy By knowing which offers and incentives to offer to which customers and when. Acknowledge email enquiries At the very minimum. It is then vital to get back to the customer within the promised time frame. building customer loyalty along the way. banks should send out an automated email response that acknowledges receipt of a customer's email and lets the sender know when to expect a more complete response. 2. To handle significant volumes of email. but they don't look at it the same way with email. 79 . Many banks regard a voice call centre as a cost of doing business. 1.2 METHOD OF EFFECTIVE CRM IMPLEMENTATION Banks can take several steps to strengthen their customer relationship management in an effective manner. banks need adequate routing technology. Such goals can be at least as important as realizing cross-sell opportunities.
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. service agents can usually handle between one and three customer inquiries at once. Analyses the project's scope Before recommending or embracing CRM. Reduce costs by improving website design and self-service Email. a customer-service representative can handle 10 to 12 customers per hour using "chat". This service also offers some of the immediacy of the phone but primarily allows customers to remain online. compared with six to eight per hour over the telephone. 5. the customer relationship model and the exact nature of customer interactions and how they tie together.Customer Relationship Management in Banks 3. Banks should not embrace top-line growth as an 80 . 4. But to reduce these expenses a site should anticipate customer needs. online chatting is providing a service via emails or any other form of immediate response. One of chat's important advantages is that it keeps customers in an online store environment where they remain exposed to merchandise and promotions. Given that the average call lasts about four minutes. and chat all involve considerable staffing costs. With online chatting. telephone support. bank executives must analyses the business issues. Providing online `chatting' An alternative to telephone support.
or their relationship with competitors or other divisions within the bank. decision makers within the bank need to make sure that all the stakeholders understand and support the required process changes.Customer Relationship Management in Banks objective until they can understand precisely how CRM technology will provide those new revenues. For a CRM implementation to be successful. but it also requires these processes to be modified. to the point of calling the account the customer and vice versa. Customers will tend to feel alienated when they are treated like a number instead of a person. CRM not only takes existing business processes and makes them more efficient. Know thy limitations Many CRM implementations are severely limited because they fail to provide a complete and meaningful view of the customer. Furthermore. 7. Change accounts into customer Traditionally banks have closely associated customers with accounts. A conventional account structure usually contains very little information about customers and their needs. CRM is primarily a business program. The way ahead Banks have excellent reasons to adopt comprehensive CRM strategies to cultivate a lifetime customer relationship. As banks move from transactioncentric to a relationship-centric business approach. effective leveraging of customer relationship becomes all the more critical. and it requires a genuine partnership between various departments to ensure that both business and technology issues are managed effectively. 81 . 6.
customers are expecting even more individual attention. RECOMMENDATION 82 . Successful CRM implementation in electronic banking needs to integrate data from all customer touch points. This is where electronic banking can offer a competitive advantage. however. this approach will enable banks to develop a strategy to deliver to the customer the most appropriate products and services. yet are unwilling to pay a premium for these services.Customer Relationship Management in Banks Today. to build a long-term relationship with banks that offers differentiated and more personalized services. If used effectively and in an innovative way. They are willing. responsiveness and product customization. employee feedback and even shareholders' perceptions.
Successful mass customization is crucial to reducing customer acquisition cost and improving the cross selling capacity. 83 . Take pragmatic steps with a clear view on delivery of all the components in the medium term. Customer Relationship Management is do-able. including greater ability to sell and cross sell. 1. However the following must take into consideration before embarking upon its implementation. 3. All aspects of customer relationship management. must be fully explored effectively deliver the competencies required to realize the business benefits. is today fast emerging s one of the most important cooperates strategies.Customer Relationship Management in Banks Customer Relationship Management (CRM). One competence does not customer relationship management make. 2. A well-executed Customer Relationship Strategies can result in number of quantitative benefits. rather than piecemeal in the short term. Tackling any one competence alone will lead to a dysfunctional business. including technology solution. improved retention besides cost of services. the most exciting strategies that emerged from networking technology revolution of the nineties.
You cannot foresee the future.” CONCLUSION 84 . The effectiveness of the mechanism is achieved when it is faultless! 5. 75% of all Customer Relationship Management projects have failed due to lapses in implementation. Technology is not enough. implementation is the key and this is where the people aspect comes into the forefront. And that is a whole lot better than waiting to see what "fate" has in store.Customer Relationship Management in Banks 4. you can develop the possibilities and capabilities today. Customer Relationship Management implementation is effective when companies are able to identify the internal and external customer and integrate them with its core business process. However. Channels are a delivery mechanism. “No-one can guarantee success. which will put you in a position tomorrow to deal with future risks and opportunities to your advantage. 6.
The challenges faced by banks and their customers are many but the trick lies in de-mystifying complex financial relationships. For a bank to succeed in adopting a CRM philosophy of doing business. banks have begun to implement end-to-end technologies through all departments with the intention of removing human error from processes. growth plans and strategies. interlocking disciplines. 85 . Technical solutions deployed by banks today are flexible.Customer Relationship Management in Banks Banking can be mysterious for consumers and how they interact with their finances can be a complex matter. customers enjoy complete luxury in terms of customized technical solutions and banks use the same to cement long-term. bank management must first understand CRM as a holistic concept that involves multiple. strategic planning. including market knowledge. In this day and age. In order to simplify lives. Previously existing manual environments could not have been adequate for future visions. mutually-beneficial relationships. user-friendly and meant to facilitate specific workflow and requirements in implementation processes.
and sales management and training. 86 . Turning the business strategy into actionable items is a difficult undertaking. technology implementation.Customer Relationship Management in Banks business process improvement. product design and pricing analysis. customer retention. human resources management. For which Customer Relationship Management works a magic wand.
com www.Customer Relationship Management in Banks BIBLIOGRAHPHY • Customer Relationship Management-Mohamed HP • Marketing Management-Philip Kotler NEWSPAPERS • Times of India • Hindustan Times WEBLOGRAPHY • • • • www.marketing.crm.customerrelation.businessline.com 87 .com www.com www.
Customer Relationship Management in Banks ANNEXURE QUESTIONNAIRE 88 .
Customer Relationship Management in Banks 1. How successful are these program in retaining your customers and acquiring new customers? 5. How do you decide the technology that is to be implemented for CRM? 89 . How do you measure the effectiveness of these program? 4. How do you develop these program? 3. Is there any development after implementing CRM program? 6. What are the various CRM initiatives undertaken by your bank? 2.
Do you have a separate department to take care of customer’s complaints? 8.Customer Relationship Management in Banks 7. What technique is followed to solve customer’s complaints? 9. What strategy do you follow to acquire more knowledge about the customers? 90 . What numbers of employees are involved in solving customer’s complaints? 10.
Customer Relationship Management in Banks 91 .