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Bachelor of Commerce Banking & Insurance Semester V

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123, D.W. Road, Churchgate, Mumbai 400 020.

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_________________________of B.Com.-Banking & Insurance Semester V (20 20 ) has successfully completed under the the project guidance on of

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I SHRUTI PODDAR the student of B.Com.- Banking & Insurance Semester V (20 - 20) hereby declare that I have completed the Project on


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In preparing this project, I feel great pleasure because it gives me Extensive Practical knowledge . I got an idea about CRM in Banks. I express my deep sense of gratitude to My Guide PROF. Kanchan Binyani as well as our principal Ms. Indu Shahani who gave me the golden opportunity to do this wonderful project on the topic HDFC and SBI CRM Banking initiatives, which also helped me in doing a lot of Research and I came to know about so many new things. I am thankful to PROF. Kanchan Binyani (Faculty Guide) for valuable inspiration and guidance provided me throughout the course of this project. She has been patient and has critically gone through the subject matter. I would also like to take an opportunity to express my gratitude towards all of them who have contributed directly or indirectly in my project work.



list of charts

list of abbreviations

Short form. CRM- Customer Relationship management SBI- state bank of india HDFC- housing development finance corporation NYSE- New York Stock Exchange GDR- Global Depository Receipts GSI- Growth Strategies International ADS- American Depository Shares WWW- World Wide Web TQM- total quality management DQ- Data Quality R.M- Relationship Manager

EXECUTIVE SUMMARY World financial markets today are driven by Globalization and it offers immense opportunities of growth for the corporate world. Most of these corporate, however, find it difficult to sustain with growing customer base and simultaneous growth in choice, demand and competition. Therefore leading banks are looking beyond the transaction to the opportunities presented by their commercial clients. Accordingly, theyre moving beyond managing clients as simple contacts to a whole new level of client relationship management, crafting a superior commercial client experience that gives the bank a competitive advantage and a more loyal, profitable client. Bankers can no longer view the customer from the perspective of specific products or a snapshot in time. To maximize lifetime profitability from valued customers, banks must abandon the traditional silo mindset, which tends to: Reward product-level success even as it cannibalizes other products or undermines enterprise-wide profitability. Alienate customers by revealing the banks lack of knowledge about their complete relationship. Banks are recognizing that its time for a more holistic approach. It is time for customer relationship management. And for that banks are making the investments necessary to implement this customer-centric vision. The title of the project is HDFC AND SBI customer relationship management BANKING INITIATIVES. The approach of this project was to understand the measures adopted by HDFC and SBI Bank to

promote fair relationship between the bank and customers, helping the customer in understanding product and services, what were the challenges faced by the bank and how did they overcome it, how to increase the value of existing customer and know their level of satisfaction and ultimately increases the bank profitability.

Objective of the project.

Research methods used.

Introduction To Banking
Bank is a term that we all are aware of . It is commonly used in day to day life. In a laymans language a bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. It is the connection between customers that have capital deficits and customers with capital surpluses.

But on the other hand in technical terms the definition of a bank varies from country to country. Under English Common Law, a Banker is defined as a person who carries on the business of banking, which is specified as conducting current accounts for his customers, paying cheque's drawn on him/her, and collecting cheque's for his/her customers.

1- As per Section 5(c) of Banking Regulation Act, 1949 a "Banking Company" means any company which transacts the business of banking in India. 2- As per Section 5(b) of Banking Regulation Act, 1949 Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. Banks play an major role in influencing the entire economy.

Importance of Banking
Bankers play very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but their borrowing, lending and related activities facilitate the process of production, distribution, exchange and consumption of wealth. In this way they become very effective partners in the process of economic development. Today modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the people for the investment purposes. If there would be no banks then a great portion of a capital of the country would remain idle.

A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless, so if the finance is not provided to Agricultural sector or industrial sector, it will be destroyed. Many difficulties in the international payments have been over come and volume of transactions has been increased. Cheques, drafts bills of exchange and letters of credit are very important instruments of the banks. The banks collect these instruments drawn on banks in other cities and proceeds according to the accounts of the customer's concerns. Now lets have a look at two major banks namely 1- SBI And 2- HDFC

State Bank Of India (SBI)

The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal i.e. on 2 January 1809. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. Government of India nationalized the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. At present SBI is a multinational banking and financial services company based in India. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, it had

assets of US$501 billion and 15,003 branches, including 157 foreign offices, making it the largest banking and financial services company in India by assets SBI was ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.

SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country. The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings and was the only bank featured in the "Top 10 Brands Of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.

As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in the Vancouver area.


HDFC Bank Ltd is a major Indian financial services company based in Mumbai. The Bank is a publicly held banking company engaged in providing a wide range of banking and financial services including commercial banking and treasury operations. The Bank at present has an enviable network of 2201 branches and 7110 ATMs spread in 996 cities across India. The Bank has two subsidiary companies, namely HDFC Securities Ltd and HDB Financial Services Ltd. The Bank has three primary business segments, namely banking, wholesale banking and treasury. The retail banking segment serves retail customers through a branch network and other delivery channels. This segment raises deposits from customers and makes loans and provides other services with the help of specialist product groups to such customers.

The wholesale banking segment provides loans, non-fund facilities and transaction services to corporate, public sector units, government bodies, financial institutions and medium-scale enterprises. The treasury segment

includes net interest earnings on investments portfolio of the Bank. The Bank's shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Ltd. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange. HDFC Bank Ltd Was incorporated on August 30, 1994 by Housing Development Finance Corporation Ltd. In the year 1994, Housing Development Finance Corporation Ltd was amongst the first to receive an 'in principle' approval from the Reserve Bank of India to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995 . During the year 2001-02 the bank was listed on the New York Stock Exchange. During the year 2002-03, the Bank increased the number of branches from 171 Nos to 231 Nos and the size of the Bank's ATM network expanded from 479 Nos to 732 Nos.

They also expanded their presence in the 'merchant acquiring' business. At present The Bank has 4,232 atms and it expanded their distribution network from 1,725 branches in 779 cities to 1,986 branches in 996 Indian cities. This makes HDFC one of the fastest growing banks.

Introduction To CRM

Meaning Of CRM

Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved in the business process. It is about creating a sustainable competitive advantage by being the best at understanding, communicating, and delivering, and developing existing customer relationships in addition to creating and keeping new customers.

DEFINITION OF CRM Customer Relationship Management (CRM) is a co-ordinate approach to the selling process allowing the various operational, customer contact and sales promotional functions of an organization to function as a whole.

Implementing CRM:

CRM requires an integration of a firm's resources; people, operations and marketing capabilities to deliver added value to the customers. CRM should provide businesses and organizations with a Single View of their customers and across irrespective of the interactive channel or medium through which the customer accesses the service or product. For example, a business (e.g. hotel) customers profile and personal references should be accessible to the business irrespective of channel i.e. whether the customer books online, calls in or walks into any location should not make a difference to the service provided based on the personal profile of the business client.

A firm that wants to implement CRM must align it's business processes cross-functionally in the best possible way to allow increased customer focus with an aim to deliver added value to the customer.

To implement CRM, the following steps must be followed:

1- Develop a CRM framework 2- Align current business processes 3- Design new cross-functional business processes (where required) 4- Develop Functional Specifications (client-side services) 5- Develop Technical Specifications 6- Match Technical Specifications to available technology (Systems, software) 7- Product Configuration 8- Data Migration and Integration 9- Staff Training

In CRM the alphabet R means relationship. But there is always an ambiguity to understand the actual meaning of this relationship. This relationship between supplier and customer is not a personal relationship or a one-time transaction relationship; for example buying a refrigerator from a consumers outlet would not be called as a relationship.

Relationship between any two parties is actually the interaction or transaction done between the two over-times or consists of a continuous series of synergistic episode of interaction many a times. This relationship only exists when the two parties diverge from a state of autonomy to mutual or interdependent. Occasionally having a cup of tea from a caf does not mean that there is a relationship. If the customer returns to the caf and orders the same tea again because he likes the environment and taste or the method of making tea, more looks like a relationship. Relationship with customers can change from time to time because it is evolved under distinguished situations. Following are the stages from where the relationship with customers can evolve:-

1- Exploration 2- Awareness 3- Expansion 4-Commitment

Customer Relationship Management Model

The Steps In The Implementation Of CRM Strategy

Successful implementation requires specific actions on the part of the organization. The implementation of a CRM strategy comprises five steps, namely creation of data base, identification of customers, differentiation of service, interaction with customers and the differentiation among customers.

Step 1- Creation of database

A customer relationship management database is a technology used for the collection and analysis of customer data as part of a CRM marketing program. Many customer- or client-centered companies rely on them as a major component of business operations. Prior to database technology, companies had to collect and retrieve customer and business data using conventional filing systems. With a capable CRM database, a company can collect infinite fields of data on limitless amounts of customers. More importantly, retrieval of data through a process known as data mining is extremely efficient.

Step 2 : The identification of customers

The identification of customers enables the organizations to select those customers that they regard as being strategically significant and who they believe can contribute to the success of the organization. These customers have unique needs and due to their value to the organization, will have products developed to meet these needs. It must be possible to identify these customers and so obtain as much detail as possible. This involves collecting as much data as

possible in order to obtain as clear a picture as possible of the customer and their profile. This may require the development of a database or the continued maintenance of a database in order to ensure that the data stays as recent as possible. Having this information enables the organization to determine those customers that have been with the organization for a long period and those that have recently started using the products and services of the organization.

Step 3 : The differentiation of service

The differentiation of service implies that different customers receive a different level of service and a different product from the organization, depending on the value to the organization and their specific needs. This requires the organization to identify the top customers and adapt service accordingly. Identification of these top customers takes place using sales figures or by calculating the CLV associated with each customer. As the organization is aware of the value of their customers, service levels can be adjusted accordingly.

Step 4: Interaction with customers

This step refers to the importance of interacting with the customer in relationship building efforts. This is necessary as the relationship can only develop and be sustained if there is communication with the customers regarding their needs, perceptions and desires. This involves developing methods of communication proactively with customers regarding the organizations products and attempting to initiate dialogue with customers. Use can be made of technology, but this is not essential. The customers with whom communication takes place are not

necessarily all the customers, but only those that the organization regards as being strategically significant. This interaction with the organization increases the expectations of the customers regarding the service received as well as the quality of the relationship.

Step 5: Customization of products, services and communication

Customization is carried out by the organization in order to ensure that customer needs are met. It requires that the organization adapts its product, service or communication in such as way have something unique for each customer. Communication can be customized to address the specific needs and profile the customer, and organization also makes use of personalization as part of this process. Products can be customized as to the specific desires that the customer has of the organization. In the case of the financial services, it refers to the product package that is offered to the customer. The purpose of customization is to increase customer satisfaction, and the loyalty that is exhibited by customers.

CRM In Banking Industry

Today, customers have more power in deciding their bank of choice. Consequently, keeping existing customers, as well as attracting new ones, is a critical concern for banks. Customer satisfaction is an important variable in evaluation and control in a bank marketing management. Poor customer satisfaction will lead to a decline in customer loyalty, and given the extended offerings from the competitors, customers can easily switch banks. Banks need to leverage effectively on their customer relationships and make better use of customer information across the institution. Competition in the financial services industry has intensified in recent years, owing to events such as technology changes and financial industry deregulation.

Conventional banking distribution has been gradually supplemented by the emerging use of electronic banking. Many bank customers prefer using ATMs or a website rather than visiting a branch, while technology has also reduced barriers to entry for new customers. One of the banks' greatest assets is their knowledge of their customers. Banks can use this asset and turn it into key competitive advantage by retaining those customers who represent the highest lifetime value and profitability. Banks can develop customer relationships across a broad spectrum of touch points such as at bank branches, kiosks, ATMs, internet, electronic banking and call centers.

CRM is not a new phenomenon in the industry. Over the years, banks have invested heavily in CRM, especially in developing call centers, which, in the past, were designed to improve the process of inbound calls. In future, call centers will evolve to encompass more than just cost

reduction and improved efficiency. According to Gartner Group, more than 80 per cent of all US banks will develop their call centers as alternative delivery channels and revenue centers, to be used for the delivery of existing products and services. But to be successful, a bank needs more than the ability to handle customer service calls. It needs comprehensive CRM strategy in which all departments within the bank are integrated.

Importance of CRM in Banking Sector

Over the last eight years, banks are highly focusing on the CRM and are expected to continue . Before implementing any CRM application the bank would need a complete view of its customers across the various systems that contain their data. If the bank could track customer behaviors, executives can have a better understanding, a predicting future behaviors, and customer preferences. In this way, the data and the applications will help the bank to manage its customer relationship and continue to grow and evolve. On the other hand most of the banks around the world are trying to use CRM techniques to achieve various outcomes.

Below are some analysis on why CRM systems are very important for a bank:

1. A CRM system will store all the past transactions and record the history or assessments of requirements or needs provided from the customers. This will help to fast-track or compare the current and future customers needs effectively, thus improving the performance.

2. CRM systems can contain adequate information of a customer from basic to detailed as possible. Therefore, it is easy to look up a suitable customer and see if he/she can brings you benefit or not. 3. In the CRM system, clients can be created into groups according to classifications or characteristics and then can be classified by geographical location or industry and managed by account managers. This will help focusing or concentrating on one or a few groups of

customers to serve them better, relevant to the current situation of your bank. 4. A CRM system is not only used to track the number of current customers but also for acquiring new or potential customers. It is very important to maintain and keep information of all these potential customers in your CRM system and this is called Sales Opportunities

5. A very crucial element of CRM system is that it is Cost & Effective. Implementing a CRM system requires less standard or framework, less human resources, manual and paper works. Investment on a CRM system is also cheap, suitable and flexible as compared to traditional ways of doing business.

6. With the popularity and advanced technology of mobile phones and tablets, all customers information can be stored safely and you can access or interact with them from any where and any time. This helps increase revenue in double or triple with less effort and time. 7. CRM systems help increase customers satisfaction, handling all incidents that may occur, giving clients the right products and suitable advices according to their needs in the fast and efficient ways. 8. If customers satisfy with your company, they will be always loyal to your products, services and brand-name. These customers will indirectly help recommend your products or services to others, and this is the most effective way to increase the number of customers and thus your sales in the future.

Objective Of CRM In Banks

CRM, the technology, along with human resources of the banks, enables the banks to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer, relationship, and the management of relationship and the main objectives to implement CRM in the business strategy are:

1- To simplify marketing and sales process 2- To make call centers more efficient 3- To provide better customer service 4- To discover new customers and increase customer 5- To cross sell products more effectively 6- The CRM processes should fully support the basic steps of customer life cycle.

The basic steps are:

1- Attracting present and new customers 2- Acquiring new customers 3- Serving the customers 4- Finally, retaining the customers

In today's increasingly competitive environment, maximizing organic growth through sales momentum has become a priority for Banks and

Financial institutions. To build this momentum banks are focusing on Customer relationship management initiatives to improve

1- Customer satisfaction and loyalty 2- Customer insight/ 360 view of customer 3- Speed to market for products and service 4- Increase products-to-customer ratio 5- Improve up sales and cross sales 6- 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. If it works as hoped, a business can provide better customer service, make call centers more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues .It doesn't happen by simply buying software and installing it. 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.

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. Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used.

In CRM projects following data should be collected to run process engine: 1- Responses to campaigns, 2- Shipping and fulfillment dates, 3- Sales and purchase data, 4- Account information, 5- Web registration data, 6- Service and support records, 7- Demographic data, 8- Web sales data.


Bank merely an organization it accepts deposits and lends money to the needy persons, but banking is the process associated with the activities of banks. It includes issuance of cheque and cards, monthly statements, timely announcement of new services, helping the customers to avail online and mobile banking etc. Huge growth of customer relationship management is predicted in the banking sector over the next few years. Banks are aiming to increase customer profitability with any customer retention. 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. It is a sound business strategy to identify the banks most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, pricing, discretionary decision making.

In banking sector, relationship management could be defined as having and acting upon deeper knowledge about the customer, ensure that the customer such as how to fund the customer, get to know the customer, keep in tough with the customer, 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.

CRM in banking industry entirely different from other sectors, because banking industry purely related to financial services, which needs to create the trust among the people. Establishing customer care support during on and off official hours, making timely information about interest payments, maturity of time deposit, issuing credit and debit cum ATM card, creating awareness regarding online and e-banking, adopting mobile request etc are required to keep regular relationship with customers.

The present day CRM includes developing customer base. The bank has to pay adequate attention to increase customer base by all means, it is possible if the performance is at satisfactory level, the existing clients can recommend others to have banking connection with the bank he is operating. Hence asking reference from the existing customers can develop their client base. If the base increased, the profitability is also increase. Hence the bank has to implement lot of innovative CRM to capture and retain the customers.

There is a shift from bank centric activities to customer centric activities are opted. 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 the time for taking ideas from customers to enrich its service. The use of CRM in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by the bank in todays competitive milieu. This has resulted in the adoption of various CRM initiatives by these banks.

Here are some global banking institutions that have deployed Customer Relationship Management systems, their CRM strategy and their goals.

Global Banks

CRM Strategy


Provide service representatives with 360-degree view of customer Bank of America Improve customer

relationship for corporate and retail experience, retention banking Segment customer base into six


different groups based on demographics and banking behavior Deploy CRM system across branch

Attain cross-sell revenues, maximum lifetime value

BNP Paribas

network, integrating with central office, link multiple customer databases

Improve customer experience, cross-sell

Integrate call center, branch, and Society General central office; link 80 banking applications to support unified view of customers

Improve customer experience, support consistent message

CRM In Banking Scenario

Global Scenario

Worldwide banks have explored and realized the benefits of CRM in a variety of ways. Different banks have implemented the philosophy in their own different way. A few illustrations will give a glimpse of the global scenario with respect to CRM in Banking. Royal Bank of Canada utilised CRM to develop models of assessment of customer profitability and life time value. These were then included in determining customer decisions like Customized Marketing campaign, establishing service levels, segmentation, targeting, product design and pricing. Customers vulnerability to attrition also is analyzed and the most valuable are flagged before they defect, in order to take preventive action in a focused and effective way. Wells Fargo Bank renowned for leadership in service and convenience to varied customer segments focused on customer service through CRM. Application of CRM enabled better integration of customer information and service applications to assist representatives of customer sales and services to easily provide a one-stop-shop for any banking service or transaction. Using CRM, Wells Fargo takes full advantage of available customer information to offer customer the choice, convenience and price benefits so that they give the Bank, all their business. Wachovia Bank uses customer transaction data to support modeling processes that evaluate each branchs current and long term profitability. In Atlanta Banks largest market, significant performance improvements were attained when it used the output of modeling process as a basis to decide which of its 96 branches to close and which location to open new ones.

Indian Scenario
Although significance of Relationship Marketing practices and optimizing and maintaining customer relationships across diverse customer segments has been realized and practiced by all banks in India, the technology enabled CRM is still at a developing stage. Different Banks are at different levels of CRM adoption and implementation and majority of them can be considered to be at preliminary stages. Operational CRM is the most wide spread, but collaborative CRM is most evident in internet banking, mobile banking, ATM functions, POS devices and initiatives like availability of pass book printing machines to enable customers to update their passbooks themselves. Also SMS alerts at various significant customer service events are proliferating. Analytical CRM is being utilized but not by all banks.

Based on market capitalization HDFC Bank is currently the largest private bank in the country with more than 25 million customers. It has an extensive distribution network of more than 2500 branches spread across 1399 cities and more than 55,000 employees. In order to meet all the demands of their customer and to earn more and more profits from the customer it accesses screens used by R.M which include the complete information about account holder and details of customer which is helpful for him to contact on phone and profitability code is mentioned, so employees can know that they are dealing with which 5, 4, 3, 2, or 1 band of customers.

And cross selling the products to customer profitability band is very important. These products are selected by certain formulas that determine which bank product customer currently uses, and what is his current balance which would indicate that he might be eligible for and want to use next. The software also suggests the appropriate rates for loans on the current market, eligibility for credit card and its limit and the customers profitability level.


HDFC Bank classify their customers under five different types of band of customer which is helpful for Relationship Manager in identifying to which type of customer he is dealing this process is called is Banding Continuous Process.

This is helpful for Relationship Manager or Personal Banker in differentiating customer as which one is most profitable and least profitable customers. This also shows customer loyalty with bank in terms of his transactions and available balance. If a customer is loyal toward bank then only bank can generate revenue thus Banding is done on the basis of revenues generated from the customers. The first two bands deal with non profitable customers. And the next three bands deal with the Profitable ones.

The profits from the customers are considered on a yearly basis.

Bands 1. 2. 3. 4. 5.

Profit Profit<0 Profit=0 Profit>1k 2.5k>Profit<5k Profit>5k

Thus from the above diagram it is clear that Band 1 customers are those who generate negative profits for the bank. Band 2 customers are those who generate zero profit for the bank. Customers generating profit more than one thousand rupees and less than two thousand five hundred rupees annually are kept under Band 3. The customers who fall under the profit class of more than two thousand five hundred rupees and less than five thousand rupees annually are under Band 4. And the highest band is of those customers who generate profits more than five thousand rupees annually.

Why HDFC Started Using CRM

The changing banking environment has affected the way Indian banks used to operate and function. Intense competition, environmental factors such as legal and social, and the ever updating norms of the financial institutions has an impact on the banks to adapt and adjust accordingly and to amend their policies and procedures. Marketing and technology plays a crucial role for banks as they are the institutions that provide direct services to its clients. HDFC understood the significance of the role of technology and marketing for improving customer relations and services especially in the intensely competitive and changing Indian banking sector. It was because of this realization HDFC decided to adopt CRM methods in order to increase customer loyalty.

Pre- Implementation Channel Usage By HDFC Bank Customer

Steps Taken By HDFC

HDFC Bank had been facing traditional problems of lack of modern delivery and marketing techniques in current fast emerging digital economy. The Bank constantly searched for means to improve their service and to increase customer base. CRM provided the opportunity for the bank as it brought together relationship of IT and marketing strategies to create profitable and long term relationships with clients. To meet the needs of the customers, HDFC Bank timely started to focus on developing a customer relationship management system. Realizing the significance of customer information availability, the project was undertaken by the bank with the spirit that has characterized the whole CRM development. Strategic plan was developed and targets were set. The management developed the CRM infrastructure and adapted latest CRM procedures. Following were the steps. 1- HDFC Bank developed central policy of using CRM within all its branches which controls all the CRM procedures. The bank devoted considerable amount of resources to manage CRM. The bank realizes that it is vital that its CRM applications and systems are supported and controlled by qualified and experienced managers. For this reason all the managers are trained and experienced to bring together professional staff, encouraging communication and coordination among them, promoting team work and instructing ways in quality service and ensure that CRM systems work efficiently.

2- The bank also developed a mechanism to check whether CRM is effectively in good use. The managers ensure that regular feedback system to consider perspective of the management, employee

participation perspective and customer experience perspective. The bank generated better than expected outcomes. CRM has positively influenced every banking function and operation.

3- HDFC Bank is making all possibilities come true for its customers. The bank is offering targeted messaging and other customized services using NCRs 'Aptra eMarketing' software. The bank runs one-to-one and oneto-all targeted messaging via all self-service channels like the ATM, mobile banking and Internet banking. Most banks do not have clean data of the customer with regards to residential address and other details. This implementation helps HDFC Bank with a more thorough analysis of the change in customer demographics and thus, plan their campaigns better after being equipped with a thorough data repository in the data warehouse. APTRA eMarketing Schematic

4- Along with targeted messaging, the bank is also offering fast ATM services. HDFC Bank has launched Favorite Transaction that allows the customer to set a particular amount for withdrawal so that every time he visits the ATM he will not be accessing the same screens. This has reduced the number of screens the customer must access while using the ATM machine for withdrawing cash. Till now, the customer had to access 9 screens, which has now been reduced to five screens, which has in turn resulted in a reduction of 40 percent in the time taken to complete a transaction. The customer also has the option to undo the 'favorite transaction' and go on with the delivery tool. The objective of there new website is to educate customers right from the process of identifying their needs, to the final process of select the plan that fits their needs, The website features an elaborate and exclusive knowledge section designed to help a customer.

Customer Registration For My Favourite Service

5- The bank started providing Highly IT enabled services in the form of Internet banking. It has been discovered that 60% of the registered banks

customers transact through online banking. So for that matter it made its website more user friendly.

6- HDFC made its Mobile banking and ATM more diversified and also provided multi-channel service delivery system to the customers which are discovered to be 80% initiated by the customers which are serviced through non-branch channels. IT Persons Days In Each Integration

7- The bank undertook Service Quality Projects using lean Sigma Toolkit, 5S and other business initiatives just to deliver customer delight. The service quality objectives and the business objectives were merged so that the customer get delighted and there is improved profitability.

8- A Customer service committee was thus set up in order to monitor the quality of service, formulate comprehensive deposit policy ( in terms of issues arising due to death of a depositor for his account operations),to

get approval for the products, to survey customer satisfaction annually and triennially. For HDFC , the CRM activities span three segments: The Back-office, which enables all transactions, for instance- a transfer of funds will involve recording the transfer request, debiting and crediting the account appropriately and the transformation by telex or demand draft. The back office enables the core activities of banking transactions. Distribution of the bank's products and services in the market. Thus enabling customer interaction through the Internet, ATMs, the mobile phone. HDFC's corporate customers need not visit the bank for many of their transactions either.

Value Of Leads Converted

PC-based corporate banking let authorized personnel in corporate open letters of credit or pay suppliers and integrate the transaction with the ERP system. The third sort of automation enables the business intelligence and CRM aspects of a bank's business. HDFC Bank can analyze channel profitability. Say, determine which type of customer

access which channel the most, and evaluate the cost-benefits of offering a service to customers.

Number Of Unique Customer Targeted Via Campaigns

For cash management they use a package from a Pune company called CashTech. There Depository system runs on software provided by Mumbai-based Kalpataru. For loans, that use Nucleus Software. To provide round-the-clock service and support to its customers, HDFC Bank has Unix-based systems from Sun Microsystems as hosts for its banking software. It is in the process of moving the application to a mainframe-class Unix machine .Many other systems run on Intel- based Compaq or IBM hardware with Microsoft NT or Windows 2000 as the Operating platform. The systems are run on a centralized basis with the branches accessing them via telecommunication lines. All departments within the organization were automated simultaneously. They work on a centralized database, the addition of new branches and new cities made very little impact on the day-to-day operations of the other existing branches.

Every server at HDFC Bank had its own direct attached storage that led to distributed storage upgrades and inefficient use of storage. The storage sub-systems were not highly available and resilient. Thus to provide scalable, reliable storage systems, and a good environment for all their applications, HDFC Bank opted for a solution from Hitachi Data Systems. Playing in a dynamic market, where there is a constant need to innovate and stay ahead of competition, HDFC Bank's objective is to build sound customer franchises across distinct businesses, so as to become the preferred provider of banking services for target retail and wholesale customer segments.

HDFC Bank thus operates in an automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables it to offer funds and transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and ATMs. The bank has prioritized its engagement in technology and the Internet as one of its key goals and has already made significant progress in web-enabling its core businesses. HDFC Bank's customer philosophy is based on four core valuesoperational excellence, customer focus, product leadership, and people.

CRM Softwares Used By HDFC Bank

1- HDFC Bank uses CRM Next as CRM software.

2- The cash management is done through using software from a Pune based company i.e. Cash Tech. Moreover the depository system of the bank runs on software provided by the Mumbai - based Kalptaru.

3- The corporate banking business is supported by Flexcube, while the retail banking business by Finware, both from I-flex Solutions.

4- The core banking software is running on both IBM AIX and SUN solaris.

5- It has various other banking applications on Microsoft and solaris servers. Some of the other IT enabled initiatives are: 1) Nucleus Software for loans. 2) Mainframe - class UNIX machine (the E10000 system) from Sun Microsystems for its banking needs. 3) iFlex Micro banker and Finware as a software for core banking operations. 4) Internet banking software for internet based channel.

HDFC Also Streamlined With SAS

SAS provided a broad range of analytics to help HDFC Bank make credit decisions, enhance its cross-sell and up-sell marketing and comply with strict regulations. Drawing on their massive volumes of data managed in large data warehouses HDFC Bank is using sophisticated solutions from SAS to generate an entirely new class of analysis and insights relating to customer relationship management, regulatory compliance, credit assessments and more. SAS, combined with the bank's CRM solution, helps HDFC Bank model its customer data and assign propensity to buy, spend and activate. SAS helped the bank target sales communications to its customers thereby reducing the number of calls each customer receives. Additionally, the highest-performing, highestmargin strata of customers - the "Imperia" customers receive an almost concierge-like experience with aggressive, attractive pricing and multiple cross-selling offers. As the customer is high in the value chain there's a stronger level of profitability in that relationship. So a greater number of higher-margin customers, lower the cost.

Ways Of Maintaining Good Relation

HDFC Bank tries to maintain good relationship with customer in following ways.

1. HDFC Bank provides you information about them in any one or more of the following languages: Hindi, English or the appropriate local language.

2. Ensuring that there advertising and promotional literature is clear and not misleading.

3. Ensuring that you are given clear information about their products and services, the terms and conditions and the interest rates/service charges, which apply to them.

4. If you avail of any service and product provided by it then what are the benefits, and whom to contact for addressing any queries. 5. Advisees the customer regarding information/documentation that might be needed for the service or product which the customer wises to reap benefit from. HDFC BANK HELPs USE YOUR ACCOUNT OR SERVICE BY:

1. Providing the customer a Relationship manager or personal banker which helps in assisting the transactions.

2. Providing regular appropriate updates.

3. Keeping the customer informed about changes in the interest rates, charges or terms and conditions.


1. Gives you clear information explaining the key features of the services and products you tell us you are interested in.

2. Gives you information on any type of products and services which they offer and that may suit your needs.

3. Tells you what information they need you to prove your identity and address


1. Offering channels for you to route your queries. 2. Listening to you patiently. 3. Accepting our mistakes, if any. 4. Correcting mistakes/ implementing changes to address your queries. 5. Communicating our response to you promptly. 6. Telling you how to take your complaint forward if you are not satisfied with the response.


1. Promote good and fair banking practices by setting minimum standards in dealing with the customer.

2. Increases transparency so that the customer can have a better understanding of what they can reasonably expect of the services.

3. Encourage market forces, through competition, to achieve higher operating standards.

4. Assisting a personal banker to customers who can look after his accounts and give timely updates.

5. Promote a fair and friendly relationship between the customer and the bank.

6. Promote confidence in the banking system.

Customers Aspect

Banks understand that customer satisfaction is an important variable in order to retain the existing clients or gain the new ones. Poor customer satisfaction leads to a decline in customer loyalty, and given the extended offerings from the competitors, customers easily switch banks. HDFC understands the importance of customer satisfaction and value the customer relationships. CRM was introduced to improve customer services and relationships with customers. The information gathered by the bank management reveals that customers are generally satisfied with the services provided by the bank. The main aim was to gain the customers impression and assess the efficiency of the CRM system, technology, processes and applications applied by the bank. customers disclosed their satisfaction on the bank services. customers wants face to face interaction and require the bank to provide services for longer hours. communication has improved mainly due to telephone service for minor complaints and information. Although it is good but cannot be considered sufficient. As per customers view the employee now tend to listen their issues with sympathy and try to resolve the queries professionally and effectively. Customers admit that the bank is working hard to train its employees in skills for improved customer service. They also appreciate the introduction of CRM processes that led to improvement in all areas.

Employee Aspect
Adaption and use of CRM by HDFC could have been effective only with the support and cooperation of bank staff. Management recognized this and took the appropriate steps . Even the bank employees realized that their support was crucial if the new system and application had to work because they are the persons that interact with customers directly and this interaction greatly influences the relationship of the bank with customers. Successful adaption was only possible in HDFC Bank if employees were motivated and enthusiastic to cooperate with the CRM processes. The employees were properly trained to use the system and CRM tools to improve the bank services. It was very important for the researcher to take employees views in this dissertation, because their perceptions, perspectives morale, skills, experience and satisfaction all influence the work performance and consequently bank performance. These factors are affected by sudden change in the organization specifically if it is technology related. Bank employees in general showed satisfaction towards the CRM use within the bank environment. Majority of them agree that new IT tools for CRM system and applications have helped improve their communication within the bank with colleagues and managers, and externally with customers. Employees can access the database where all the information of specific client is provided, just enter the reference or other details, and the information comes in front of them. This has helped a lot in risk reduction, quality work in less time and effective performance. Employees believe that customers feel satisfied with the service they provide. Employees believe that CRM utilities are very important for their performance and they are completely satisfied with the use of CRM technology and procedures. However many employees have concerns for

its reliability and they feel that they have to constantly update their knowledge of its use as the technology changes rapidly. Employee have used the new technology, process, procedures, tools and systems related to CRM and they believe that CRM is essential for Bank for current and future use as it directly and/or indirectly affects their performance that in turn improves bank performance as employees provide quality services. |

CRM helps HDFC Bank achieve 360 degree view Around three years back, in order to retain its competitive advantage, the bank felt that it needed to better its customer engagement processes. Unlike other banks, HDFC Bank did not want to buy growth at the expense of its profitability. Management at the bank knew that only unparallel customer experience could provide a sustained edge much needed to maintain its growth rate in spite of increasing balance sheet size. The bank found an answer in a two prong strategy which included raising the bar for its internal processes to preserve profitability and ensuring consistency of information and actions across channels to create an unmatched customer experience - gaining trust and loyalty to sustain the growth trajectory. However, despite the clarity in strategy, execution was a challenge. Such a radical strategy was first of its kind and faced tremendous risk due to inherent complexity and technological challenges, considering the transformation had to happen across a geographically distributed team, without hampering business and at a pace that kept it relevant. Also it needed to streamline deliveries keeping in mind the readiness and the ground realities. Another challenge was leveraging the data warehouse to build intelligence on customers and deploying this information at various touch points to help maximize customer life cycle value. Technologically, scalability of the system given the large data volumes, 55,000+ user base, workflow complexities, integration, synchronization and incremental updates was no less challenging either. Aware of ground realities, the bank focused on finding a solution with an architecture capable of managing over 55,000 users serving over 25 million |

customers. It also needed an implementation partner with extensive banking domain knowledge and capability to execute the vision. The bank selected CRMnext's Solution which promised to fulfill the banks needs. Some of the key capabilities offered by the solution included:

1- Customer 360 view Creating a unified customer view by collating and massaging data from various sources including the data warehouse. Controlling customer information based on the role of users. Enabling access to single view across various channels like branch, phone banking, etc

2- Integrated sales platform Multi-wave process workouts to ensure unification and consolidation of all unstructured processes (run on excel) and semi automated processes. Phasing out 6 applications like lead tracking system, customer contact management, etc. Integrating with 7 core and origin systems to provide end-to-end status visibility. Process TAT guaranteed by alerts and multi-stage escalations across departments and channels. Using mobile & two way SMS capabilities to create leads, update status, request for customer offers, etc. |

3- Customer experience management Enabling improved relationship management by creating virtual portfolios and accountability. Ensuring information availability at all customer touch points to boost the quality of interactions. Enabling system driven contact strategies based on customer bands to ensure aligned actions. Focus on roadmap to establish CRMnext as a single destination for all needs

4- Cross Selling Capability The platform operates across all channels, providing global visibility and status of offers. Various systems integrated to provide event based triggering such as large deposits, channel usage, etc. Marketing team continuously generates cross-sell offers and next best products to be sold.

Ever since the solution went live in 2009, HDFC Bank has been able to realize its vision and maintain the same growth rate in spite of over 200% increase in balance sheet size. Today, CRMnext is seen as a star investment and a mission critical application that the bank depends on. The CRM system led to a high impact transformation which resulted in complete sales process re-engineering. It has allowed the bank to increase its customer base |

by a whopping 113% by December'11. It also helped the bank grow its assets business by 100% over 2008 levels. Plus, there was a 200% increase in the leads being entered per month between Mar 2008 and Nov 2011. Between FY 2009-10 to FY 2010-11 lead conversion increased by 32%, while the quality of documentation improved from 60% FTR (First Time Right) to 97% in November 2011. There has also been a significant improvement in customer experience management as the bank's loyalty index rose from 38 in 2007 to 62 in 2010. This was aided in large parts by a considerable drop in number of customer complaints and an increase in service quality rating which improved from 65% in 2007-08 to 97% in 2011. The CRM has also improved sales representatives' ability to cross-sell by significantly increasing the number of personalized offers generated on monthly basis. This improvement can be clearly tacked and proved by the following pie chart.

Post-Implementation Electronic Channels Usage By HDFC Bank Customers.


HDFC Bank Wins 2012 Celent Model Bank Award For Great Customer Experience North Carolina - June 13th, 2012

HDFC Bank wins the 2012 Celent Model Bank Award in the "Customer Service Initiative" category for delivering great customer experience across channels including branch, phone banking, contact centers etc.

HDFC Bank does not believe in designing a product/process and look for customers. Instead it always puts the customer at the center while designing various products/process to meet customer needs. The key difference lies in "Customer Centric approach" versus "Product centric approach". Bank focuses towards identifying customer niches to design specific products to

meet their requirements and emphasis is on "acquiring through bricks" and "serve through clicks".

HDFC Bank always believed in "One Bank" vision and had invested in the right technology since inception. It is one of the few Indian Banks to have put in place a dedicated "Service Quality and Lean Sigma Team" which imbibes the power of Lean Sigma to transform processes and abreast technology to provide continuously improving customer experience across channels. With a view to ensure consistent experience across channels and to enhance 360 degree view of customers, it partnered with CRMnext in 2007. The bank realized that in today's environment only unparallel customer experience could provide a sustained edge much needed to maintain profitable growth while increasing number of customers, transactions and resultant balance sheet size. "The idea was to completely transform the customer experience by creating a single common platform across the bank for strategy execution. Driving improvement in Service Quality needed adequate focus on process reengineering, behavior change as well as technology support. We needed a CRM system with scalability given the large data volumes, 55,000+ user base, workflow complexities, integration, synchronization and incremental updates was a big challenge. Our CRMNext solution added value to execute our vision without any compromise." said Ratan Kesh, Senior Vice President and Head Service Quality, HDFC Bank.

CRM at HDFC Bank allows creation of a unified customer view by interfacing with various sources including the data warehouse thereby providing a comprehensive 360 view of customers across various channels

like branch, phone banking, etc. Today HDFC Bank has more than 25,000 on CRMnext who have a comprehensive and relevant 360 customer view which has multiplied cross-sell and up-sell capabilities at all customer touch points.

CRMnext also enables system driven contact strategies based on customer bands to ensure aligned actions and quality interactions across all customer touch-points. Various systems integrated to provide event based triggering such as large deposits, channel usage, etc. Marketing team continuously generates cross-sell offers and next best products to be sold. This has resulted in HDFC bank having one of the highest product holding ratios per customer in the industry.

"At CRMnext, our focus has been to deliver high impact transformational CRM solutions. We enable our customers to execute their strategy, holistically on a single platform, thereby creating sustainable competitive advantages for them. We feel proud to be a part of the entire customer experience transformation initiative at HDFC bank." Nishant Singh, Director, CRMnext.

Thanks to bank's focused Service Quality drive and CRM initiative, Bank's customer base has witnessed a huge increase along with significant increase in the leads, higher conversion ratio and reduction in TAT. First pass rate has gone up and Bank's Service Quality Rating improved leading to manyfold reduction in customer complaints.

Outcome Of CRM Bank now provides better and has improved banking services. Its operating efficiently and management and employees work more effectively. The speed of the work has improved due to CRM adaption. CRM has helped the bank to target the strategies for better customer services. It has also assisted

in facilitating customer service which resulted in satisfied customers and profitable business. The adaption and implementation of CRM by the bank has resulted in improved performance and profitability. The Bank is very much aware of the involvement of bank staff for the CRM to be successful. The management realized that CRM adaption requires the well trained, educated and experienced staff to work on it. Employees are given access to customer database so that they can make on the spot and efficient decisions. They are also empowered to resolve small customer issues themselves, though major complaints are still dealt centrally by the senior management. Employees are also involved in searching, adapting and evaluating CRM needs for the bank. The management emphasizes greatly on availability of latest and advanced information and communication technology to its staff and takes extra measures to ensure this happens. The managers were also responsible for planning, sorting, reviewing and monitoring work of the employees. The managers believe that the bank now provides better and improved banking services. According to their belief, employees work more enthusiastically, are well motivated and are satisfied with their roles and responsibilities. Bank processes such as sales and marketing works more efficiently. Due to CRM, the bank can access a wide variety of sources for required information, ideas and experiences. Employees work more effectively by reducing repetitive tasks, decreasing costs, and minimizing risks. Another benefit that the bank has received is increase in speed and reliability of banking functions/transactions. CRM has helped the bank to target the strategies for better customer services. It has also assisted in facilitating customer service which resulted in satisfied customers and profitable

business. The adaption and implementation of CRM by the bank has resulted in improved performance and profitability. Operational inefficiencies have reduced and few resources are being wasted. CRM also helped developed new incentives for clients by searching their data and records which are collected by latest systems and applications. The most important impact of CRM on bank as felt by managers is the creation of climate of trust that helped in customer loyalty and retention. Bank is completely satisfied with the results of CRM use in the bank. They understand that CRM technologies rapidly change. It is hard to forecast where CRM technology will be in the next few years. The bank has all necessary skills and technical competence to absorb the new CRM systems processes, tools and applications. The management agrees unanimously that bank uses CRM to drives profitability, cut costs, reduces risks and improves customer service. Its challenging to ensure clients prefer their services over that of others. The bank uses CRM technology to analyze the customer needs and to ensure customer satisfaction. The use of CRM in the bank has become crucial with aggressive strategies employed to gain and retain customers, which has resulted in the adoption of various CRM initiatives to enable the bank to achieve its objectives. The summary is by introducing and adapting the latest CRM methods, techniques, applications and systems, banks can provide better customer service, increase customer revenues, discover new customers, sell products more effectively, help sales staff close deals faster, make call centers more efficient, simplify marketing and sales processes.

HDFC CASE STUDY. HDFC Bank Uses CRM to Achieve its One Bank Vision Boosting Profit and Customer Satisfaction. Published: April 2012

Based in India, HDFC Bank is the largest private universal bank by market capitalization, with more than 25 million customers, an extensive distribution network of 2544 branches spread across 1399 cities and more than 55,000

employees. To maintain its leadership, HDFC Bank used CRMnext to establish a single platform for execution of its strategy across products, departments and channels. The result, over FY20082011, bank's net profit has grown from USD 318 million to USD 1033 million at a consistent rate of 30% quarter-on-quarter for the last 3 years. During this period the banks customer base has grown by 113%, while the loyalty index has grown from 38 to 62 as opposed to industry average of 54.

HDFC Bank believes several steps together led to its program success, including:
Top management vision and support Understanding & communicating the vision of the program clearly. Driving it as a transformation rather than a technology project. Ensuring adequate resource allocation in term of time and money. Delivering quick wins to maintain the enthusiasm.

Implementation methodology

Creating a 3 year roadmap to achieve the full potential of the vision. Creating an internal CRM excellence team. Ensuring adequate multi-wave iterations for process unification. Taking quick decision during departmental conflicts. Understanding that user adoption is driven by value & not technology Creating reliable integrations because they must tested day-on-day.

Respecting technology complexities

Ensuring right strategies to work with LOB system that are not open. Understanding scalability requirements is key to decision making. Understanding the impact of reports and isolating the work load

Ownership experience

Training production teams to own such a high impact CRM. Ensuring user training are part of the HR induction program. Ensuring adequate user feedback and improvement cycles. Using strong production change management practices to deliver always on availability

Selecting the right Partners

Understanding that such transformation need practice specialists. Selecting a partner who can add value to the vision. Listening to the partner especially when the advise is counter intuitive

The Opportunity To retain competitive advantage, HDFC Bank realized that in todays environment only unparallel customer experience could provide a sustained edge much needed to maintain its growth rate in spite of increasing balance

sheet size. Unlike other banks, HDFC Bank did not want to buy growth at the expense of its profitability.

The bank quickly realized that the answer was a two prong strategy Raising the bar for its internal processes (although the bank were already outperforming the industry) to preserve profitability. Ensuring consistency of information and actions across channels to create an unmatched customer experience - gaining trust and loyalty to sustain the growth trajectory. The Challenge

Despite the clarity in strategy, execution was an obvious challenge. Such a radical strategy was first of its kind and faced tremendous risk due to inherent complexity and technological challenges, considering: The transformation had to happen across a geographically distributed team, without hampering business and at a pace that kept it relevant. Streamlining deliveries, keeping in mind the readiness and the ground realities. Leveraging the data warehouse to build intelligence on customers and deploying this information at various touch points to help maximize customer life cycle value.

Scalability of the system given the large data volumes, 55,000+ user base, workflow complexities, integration, synchronization and incremental updates.

High Impact improvement areas

Customer 3600 view

Creating one view of customer relationships, interactions, and product/service offering with unified workflow for all sales & service interactions. Customer intimacy: What do they buy? What do they need? How do they behave?

Sales process reengineering

Manage end-to-end sales process across departments for all products on a single platform. Ensure unification improves TAT backed by escalations at different stages of the process, irrespective of action happening in CRM or LOB systems

Customer experience management

Enable service and action guarantee across channels. Enforce customer courtesies, empower relationship managers with requisite information, define contact strategies based on customer segment bands.

Effective cross- selling

Use CRM to enhance cross sell, up-sell


capabilities across all customer touch points

Approach As one of the top IT spenders, HDFC Bank has deep relationships with all key technology partners. Aware of ground realities, the bank focused on three key parameter to execute a vision that had no parallel

An ultra-scalable product with an architecture capable of managing over 55,000 users serving over 25 million customers. Integration capabilities that are reliable and capable of managing complex & diverse scenarios while retaining traceability. An implementation partner - a firm believer in practice leadership with extensive banking domain knowledge and capability to execute the vision .

CRMnexts Solutions
Customer 3600 view Creating a unified customer view by collating and massaging data from various sources including the data warehouse. Controlling customer information based on the role of users.

Enabling access to single view across various channels like branch, phone banking, etc Integrated sales platform Multi-wave process workouts to ensure unification and consolidation of all unstructured processes (run on excel) and semi automated processes. Phasing out 6 applications like lead tracking system, customer contact management, etc. Integrating with 7 core and origin systems to provide end-to-end status visibility. Process TAT guaranteed by alerts and multi-stage escalations across departments and channels. Using mobile & two way SMS capabilities to create leads, update status, request for customer offers, etc.

Customer experience management

Enabling improved relationship management by creating virtual portfolios and accountability. Ensuring information availability at all customer touch points to boost the quality of interactions. Enabling system driven contact strategies based on customer bands to ensure aligned actions. Focus on roadmap to establish CRMnext as a single destination for all needs.

Effective cross- selling capability

The platform operates across all channels, providing global visibility and status of offers. Various systems integrated to provide event based triggering such as large deposits, channel usage, etc. Marketing team sold continuously generates

cross-sell offers and next best products to be

Results Since the solution went live in 2009, HDFC Bank has truly being able to realize its vision and maintained the same growth rate in spite of over 200% increase in balance sheet size. Today, CRMnext is seen as a star investment and a mission critical application that the bank depends on, here is why

CRM And Its Benefits The progress that HDFC has achieved ever since it adapted CRM concludes that CRM had a very positive effect on the bank performance. It not only helped employees learn and improve but also influenced their morale and motivation. This has an indirect effect on the way bank serve its customers. By adapting CRM processes, the bank has provided its customers with satisfactory services which increased customer loyalty and helped build better relations. CRM has an impact on every bank operation and function. CRM has guided bank to induct latest technological system and application to collect, analyze and use customer information effectively and efficiently run the day to day operations of the bank. CRM has provided a means to better communication and coordination of employees with customers. Other benefits that have been gained include reduction in cost, speedy transactions, reliable flow of information. The bank has achieved the overall objectives of using technology to organize, automate, and synchronize business processes with the implementation of CRM and has been successful in finding, attracting, and wining new clients, and reducing the costs of marketing and client service. The bank realizes the importance of CRM todays competitive environment that it considers it as an integral part of its strategic business plan. CRM integrated approach makes all the difference to satisfying customers, retaining their loyalty, providing added value and generating growth. In fact, CRM might be the difference between the bank to flourish and failure to survive.

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Figure 2 Factors That Affect Customer Satisfaction (Hokinson, 1995, 16)



SWOT Analysis:-SWOT Analysis is mainly to see what are the various strength, weakness, opportunities and threats of the organization. As we know that every organization is specialize in one field and weak in other field. No one organization can be specializing in every field because it is beyond its scope. If every organization will be specialize in every field then there will not be any competition between various organizations and it will not have fear of lose the business to other organizations. So this analysis is given as follow:


Main strength of this bank is, it is the largest bank of the INDIA, it has wide network of branches and ATM overall pan INDIA.

Less charges are taken from the customers for providing the services. Most of customers are happy due to this complaint of this.

This bank also keeps that type of customers which are of low profitability. It believes not only in profit which is main aim of every organization. It is also perform social responsibility.

This bank has monopoly in most of fields as it provide clearance house, come most important after RBI, provide loans to the poorest farmers and needing persons.

It has seven subsidiary banks ,all of these capture more market growth rate by more synergy.


First weakness of this branch is ,it doesnt issue the memo immediately if any one work is not perform in time or any one come late. No one take responsibility on his shoulder .

High networking technology is used in some branches. All branches are not computerized and high security softwares are not used.

Daily performance chart of the organization doesnt come on the computer of every employee as in private sector bank. Even performance of the employee also doesnt come.

No incentives are given to the employees for motivating them. Even the incentive is also not fixed for the employee who has operation work. Only they have to perform customers work.

High discipline is not used in the branch as it is requirement of every organization. No organization can exist in this competitive environment without it.

In this bank, account is open with minimum of Rs.1,000. Some low class person cannot manage this amount in initial stage.

Every employee in this branch is overloaded with work. The work distributed is more than working capacity of the employee.

This bank spends less on basic facilities what I have found that are very old ATM which mostly remain out of work, no sitting and standing arrangement etc.


It can increase its network more as good response is coming as customer base is increasing, it means people are ready to take services of this bank.

It can relax some of its internal rules to catch more customers. Many other banks have not rules which this bank has put in ahead of customers.

From the customer feedback it is found that its customers have mainly saving, current accounts and fixed deposits. Its customers have no insurance policy of its bank, less awareness of mutual fund. These customers should be provided full knowledge about its all products. As this banks customer base is increasing, knowledge of all products should be given.

It can open branches in foreign also as many of its customers are NRIs. It has tied up with other banks in foreign to handle the foreign transactions.


New banks are coming in INDIA. This will increase the competition and this has to consecrate on its marketing activities.

New banks are giving relaxations to its customers. So it will have to change its rules.

New banks are poaching the employees of this branch. So this bank has to retain its employees with it.

New banks are spending more to capture the more customers so this bank will have to change its policy of less spending or it will have to find new mean to retain its customers with it.

State Bank of India Core Systems Modernization

Need For CRM SBI had undertaken a massive computerization effort in the 1990s to automate all of its branches,implementing a highly customized version of Kindle Banking Systems' Bankmaster core bankingsystem (now owned by Misys). However, because of the bank's historic use of local processing and the lack of reliable telecommunications in some areas, it deployed a distributed system with operations located at each branch. Although the computerization improved the efficiency and accuracy of the branches, the local implementation restricted customers' use to their local branches and inhibited the introduction of new banking products and centralization of operations functions.The local implementation prevented the bank from easily gaining a single view of corporate accounts, and management lacked readily available information needed for decision making and strategic planning.The advantages in products and efficiency of the private-sector banks became increasing evident in the late 1990s as SB lost existing customers and could not attract the rapidly growing middle market in India. In fact, this technology-savvy market segment viewed the public-sector banks as technology laggards that could not meet their banking needs. As a result, the Indian government sought to have the public-sector banks modernize their core banking systems. In response to the competitive threats and entreaties from the government, SBI engaged KPMG Peat Marwick (KPMG) in 2000 to develop a technology strategy and a modernization road map for the bank.

EVENTUAL Progree In 2002, bank management approved the KPMG-recommended strategy for a new IT environment that included the implementation of a new centralized core banking system. This effort would encompass the largest 3,300 branches of the bank that were located in city and suburban areas. The State Bank of India's objectives for its project to modernize core systems included: The delivery of new product capabilities to all customers, including those in rural areas The unification of processes across the bank to realize operational efficiencies and improve customer service Provision of a single customer view of all accounts The ability to merge the affiliate banks into SBI Support for all SBI existing products Reduced customer wait times in branches Reversal of the customer attrition trend


KPMG Peat Marwick (KPMG)

vendor consortiums led by IBM and TCS The TCS group included Hewlett-Packard, Australia-based Financial Network Services (FNS), and China Systems (for trade finance). Although SBI favored the real-time processing architecture of FNS's BaNCS system over that of the IBM consortium's memo post/batch update architecture, the bank had several concerns about the TCS

Challenges for the Bank The bank faced several extraordinary challenges in implementing a centralized core processing system. These challenges included finding a new core system that could process approximately 75 million accounts daily a number greater than any bank in the world was processing on a centralized

basis. Moreover, the bank lacked experience in implementing centralized systems, and its large employee base took great pride in executing complex transactions on local in-branch systems. This practice led some people to doubt that the employees would effectively use the new system. Another challenge was meeting SBI's unique product requirements that would require the bank to make extensive modifications to a new core banking system. The products include gold deposits , savings accounts with overdraft privileges, and an extraordinary number of passbook savings accounts. Vendor Consortium Selection Recognizing the need for large-scale centralized systems expertise, SBI sought proposals from a number of vendor consortiums that were headed by the leading systems integrators. From these proposals, the bank narrowed down the potential solutions to vendor consortiums led by IBM and TCS. The TCS group included Hewlett-Packard, Australia-based Financial Network Services (FNS), and China Systems (for trade finance). Although SBI favored the real-time processing architecture of FNS's BaNCS system over that of the IBM consortium's memo post/batch update architecture, the bank had several concerns about the TCS consortium proposal. They included the small size and relatively weak financial strength of FNS and the ability of the UNIX-based system to meet the scalability requirements of the bank. Therefore, it was agreed that TCS would be responsible for the required systems modifications and ongoing software maintenance for SBI. Additionally, scalability tests were performed at HP's lab in Germany to verify that the system was capable of meeting the bank's scalability

requirements. These tests demonstrated the capability of TCS BaNCS to support the processing requirements of 75 million accounts and 19 million daily transactions.

Initial SBI Core Systems Modernization Project The contract for the initial project was completed in May 2002; 3,300 branches were to be converted by mid-2007. TCS immediately began a sixmonth gap analysis effort to determine the required software changes to the BaNCS system. The changes included installing required interfaces with more than 50 other systems as well as making enhancements to support the bank's product requirements. These product requirements were separated by customer segment to allow the vendor and bank to begin conversions before all the needed modifications were implemented. They placed a priority on the needed changes that would allow branches with high-net-worth individuals and then corporate accounts to be converted as soon as possible. Before the first conversion in August 2003, TCS and HP created the data processing environment for SBI. The primary data center was established on the outskirts of Mumbai and a backup center was established approximately 1,000 miles to the east in Chennai. The centers were equipped with HP Superdome servers and XP storage systems in a failover configuration utilizing HP's UNIX operating platform. Initial Conversion Project The conversion effort began in August 2003, when SBI converted three pilot branches to the BaNCS system. The successful conversion and operation of the pilot branches was followed by the conversion of 350 retail branches with high-net-worth customers between August 2003 and September 2004.

At this point, the bank intentionally halted the conversions to analyze and resolve reported problems. They analyzed, categorized, and prioritized these problems by type of resolution (e.g., software, procedural, training) and severity. TCS managed software revisions for the critical software changes while the branch personnel managed the needed training and procedural changes. After the software and procedural changes were implemented, SBI converted an additional 800 branches between December 2004 and March 2005. Unlike in the previous conversions, this group of branches included predominantly commercially oriented offices. The conversion effort then refocused on retail branches until November 2005, when the bank paused again to resolve problems that came up during this second group of conversions. After the second round of changes, the system and processes were functioning smoothly, and management believed the branch conversion could be accelerated. An assembly line approach was then employed in April 2006 to speed the branch conversion process: Branch personnel were responsible for data scrubbing and cleaning of their customer information on the existing system. Branches were notified three months prior to their conversion date to begin "mock," or test, conversions using a specially created test version of the BaNCS system. Branches performed several test conversions to ensure the actual conversion went smoothly. As the new core banking system was rolled out across the SBI branches nationwide, a special process was introduced in the nightly batch window to

add the new branches. The process increased batch processing time approximately 20 minutes and typically included adding branches in groups of 50. This additional process, of course, was unnecessary upon completion of the rollout and has since been removed from the nightly batch window. TCS and local area branch managers oversaw the conversions, and the bank's circle (regional) heads formally reported the status to the chairman's office. By employing the assembly line approach for branch conversions, SBI was able to convert 1,200 branches in April and May 2006, completing the initial 3,300-branch conversion two months ahead of the original schedule. The milestones for the initial core systems implementation project are included in the SBI and affiliate banks core systems modernization time line in Exhibit 2.

Affiliate Banks' Conversion As the rollout plans for State Bank of India were being finalized, the bank decided to extend the scope of the core banking implementation to include its (then) eight affiliate banks. TCS created a separate processing environment within the Mumbai data center used to support SBI. The conversion effort for each of the affiliate banks spanned 18 to 24 months; the first six months were used for planning, training, and establishing the processing environment for the banks. The branch conversions overlapped among the banks, allowing all the affiliate banks to be converted in 30 months. The project was begun in July 2003 for the State Bank of Patiala and in 2004 for the other affiliate banks. All of the affiliate bank branches were converted to the BaNCS system by the end of 2005, as reflected in Exhibit 2. State Bank of India Full Branch Conversion The success of the initial 3,300-branch conversion for SBI demonstrated that: TCS had the technical capabilities to support the bank's IT initiative and scale of operations. Bank personnel had the skills to adopt new processes and support the conversions.

The Indian customer base would react to new technology by adopting new electronic services and demanding new, more sophisticated banking products. An assembly line approach could be used effectively to support large-scale branch conversions. Given the success of the initial project and SBI's desire to offer new products to all of its customers, a new IT plan was created that would encompass all branches. TCS and the bank would have to demonstrate the capability to process 100 million accounts in a single processing environment. TCS and HP then conducted another scalability test in September 2006 to determine if the system could process SBI's entire base of 100 million accounts (excluding the affiliate banks, which use a separate processing environment) with sustained peak online throughput of 1,500 transactions per second. They conducted the test at HP Labs in Cupertino, California, using two 32-CPU HP 9000 Superdome application servers and two 32-processor Itanium Core HP Integrity servers for the database. The test achieved a sustained peak real-time transaction rate of more than 1,575 transactions per second, meeting the projected processing demands of SBI. Additionally, batch tests were run for both deposits and loan account processing. The month-end batch process for loans required 1 hour and 5 minutes, and deposit processing was completed in 2 hours and 27 minutes. These benchmarks were audited by Ernst & Young, and the test results are highlighted in Exhibit 3

Based on the successful scalability test, SBI decided to convert the approximately 6,700 remaining SBI branches to the BaNCS system. The conversion of the remaining branches began in June 2006, with the stated goal of completing the conversion by year-end 2008. Utilizing the assembly line conversion approach established in the initial phase, the bank converted 1,400 of these branches by March 2007. Because the conversion methodology and BaNCS system were thoroughly proven and stable, the assembly line conversion approach allowed the bank to complete the conversion ahead of schedule. Between April 2007 and March 2008 (the bank's fiscal year end), SBI converted 4,600 branches to the new system. The remaining branches were converted between April and July 2008.

Critical Success Factors Large-scale core systems implementations are typically the most costly and risky IT projects undertaken by banks. Failures of core systems projects are not uncommon at large banks and result in both financial impact and lost business opportunities. Further, failed projects lead other banks to delay needed core systems replacements because they measure the risk of failure against the potential benefits of a new system.TowerGroup believes that several critical factors contributed to the success of the SBI core implementation effort: Senior management commitment. The project was driven by the chairman of SBI, who met every month with the information technology (IT) and the business sector heads. The chairman monitored the overall status and ensured that sufficient resources were allocated to the project. TCS senior managers were thoroughly committed to the project as well and periodically met with the SBI chairman to review the project status. Staffing and empowerment of project team. The core banking team consisted of the bank's managing director of IT acting as team head and 75 business and IT people selected by the bank. TCS also staffed the project with approximately 300 IT professionals trained on the BaNCS system. Importantly, the SBI business people were viewed not just as contributors to a key project but as future bank leaders. This team reported to the SBI chairman and was empowered with all decision-making authority. Ownership by business heads. The regional business line heads were responsible for the success of conversion of their respective branches and

reported the status to the chairman.Thus, the business heads' objectives were aligned with those of the project team. Focus on training. SBI used its network of 58 training centers across India to train employees on the new system. TCS personnel first educated approximately 100 SBI professional trainers, who then trained 100,000 SBI employees at the centers; the remaining employees trained at their respective job sites. Benefits of New Core Systems Implementation The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. For example, the new core banking system has allowed the bank to redesign processes. It established 400 regional processing centers for all metro and urban branches that have assumed functions previously performed in the individual branches. The bank recently reported that business per employee increased by 250% over the last five years. The bank has achieved its goal of offering its full range of products and services to its rural branches. It delivers economic growth to the rural areas and offers financial inclusion for all of India's citizens. Implementation of the TCS BaNCS system has provided the bank with the ability to consolidate the affiliate banks into SBI. In fact, the bank recently completed the consolidation of State Bank of Saurashtra into SBI. The bank has reversed the trend of customer attrition and is now gaining new market share. Completion of the core conversion project has also allowed the bank to undertake several new initiatives to further improve service and support future growth. These initiatives include the deployment of more than 3,000

rural sales staff, redesign of over 2,200 branches in the last fiscal year, opening of more than 1,000 new branches, establishment of a call center, and an active plan to migrate customers to electronic delivery channels. The improvement in productivity and growth of business for the SBI Group is reflected in Exhibit 4.


Reduction in TAT (Turn Around Time)

SBI can now integrate and manage content, campaigns and merchandising to patrons via the Web Streamlined product delivery and support processes with a single contact point on the WebSite offers a one-stop-shop for customers' needs. There were hiccups as various centres had problems connecting to the CRM portal, which have been solved. They are using multiple types of connectivity, leased lines that terminate at the central data centre in Mumbai, broadband connections, dial-up connections, telephone lines, etc. The type of connectivity depends on the number of users in that particular branch and the kind of work being done there. They have there mail server and other functionalities on the portal too. The development tool, WebLogic Workshop, is Java-based, allowing people at SBI to develop and customize applications at a faster pace. Applications running on the system permit

the management of content, merchandise and campaign-related details. The company has even moved its internal applications to the portal. Thus, even when a staff member is working internally, he is working with an interface of a browser/portal. What used to be on a client/server environment is now on the portal. Functions like cash management, proposal details and issuing policies all happen on the portal. Having deployed WebLogic, SBI is able to run its cycle-all its processes right from claims processing to CRM-on the portal. Some features of the system are load balancing, effective code deployment and clustering support (24x7). Plans are afoot to use the portal for providing self- service to customers, partners and employees. One can just come in, log on to the portal, and access any kind of information.

SBI implemented the system in a different manner. With this initiative, SBI has derived quite a few benefits. For instance, it has been able to reduce the Turn Around Time (TAT). Because of this initiative they could spot a few processes that would otherwise never be realized. they have outsourced some routine work which was done centrally and was manual. Now, irrespective of the location of the work, its done through the portal and they are able to manage it better.

Saving time and money

Process improvements are evident. All of this happened with minimal system changes without adding to the existing infrastructure The solution has also brought down by 50 percent the time taken for specific processes like cash management. With a view to understanding the data quality gaps and to develop a road map to closing them, SBI engaged Spectrum Business Support Ltd's Data fix Solutions team (now Datafix Technologies Pvt. Ltd.) to undertake a Data Quality Study and Audit (DQ Audit). There was requirements of time and funds to obtain a true foundation of customer-oriented information, by running a De-duplication pilot on a significant portion of the migrated Phase I data, numbering 3.3 million records.

Data Quality Consulting and Audit.

Define Data Quality Audit Project Scope identifying DQ dimensions, gaps and parameters to be studied. Data Quality Study including defining Business Rules and Domain Rules for conducting the DQ Audit. DQ Audit Process and presentation of results including listing of DQ problems that would likely hamper SBI's information management and Customer Relationship Management strategy.

Data De-duplication Pilot

Pre-cleansing 3.3 million records data sourced from the Core Banking application. De Duplicating the records to arrive at Unique IDs.Identifying key customer relationship metrics based on unique individual and household Ids.

SBI is equipped to develop a blue-print for their Customer Quality Initiatives to create long-term competitive advantage.State Bank of India (SBI), Indias largest financial services conglomerate has contracted to implement Anti Money Laundering (AML) software AMLOCK from 3i Infotech Ltd .it helps the bank in managing its government clients better. Cash@WillTM helps SBI improve revenue, maximize profits, optimize costs, and establish efficient management systems to accelerate growth.SBI is now using Nucleus Softwares Cash@WillTM for Drafts, Income Tax Refund Orders (ITRO), Multi City Cheque (MCC) and Collections services. The implementation was done in a phased manner where Payments and Collections modules implemented initially were subsequently replaced by the newer version of Cash@WillTM. Nucleus' Cash@WillTM will power the cash management product of State Bank of India. It supports the bank in handling of government business like ITRO, SBI rights issue.. Nucleus Cash Management Solution Cash@WillTM built on new generation technologies of Oracle empowers banks to offer their corporate customers optimized cash management services, dramatically improving funds collection and inflow forecasting, payment dispatch and funds utilization. It provides anytime, anywhere access to quality real-time consolidated information and seamlessly supports multibank, multi-currency, multi-lingual transactions, ensuring smooth flow of information and cash.


CUSTOMER PRIVACY Customer privacy is an important issue in CRM. CRM deals with large amounts of customer data through various touch points and communication channels. The personalization process in CRM requires

identification of each individual customer and collections of demographic and behavioural data. Yet, it is the very information that most customers consider personal and private. The individual firm is thus caught in an ethical dilemma. It wants to collect as much information as possible about each customer to further its sales, yet in doing so it treads at and beyond the bounds of personal privacy. Privacy issues are not simple. There are overwhelming customer concerns, legal regulations, and public policies around the world. Still it is unclear and undetermined what extent of customer privacy should be protected and shouldnt be used, but four basic rules might be considered.

The customer should be notified their personal information is collected and will be used for specific purposes.

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The customer should be able to decline to be tracked. The customer should be allowed to access their information and correct it.

Customer data should be protected from unauthorized usage.

Some companies provide customer consent form to ask the customer to agree to information collection and usage. Providing personalized service to customer is a way to satisfy customers who provided their personal information. All of these efforts are designed to build trust between the company and its customers.


The concept, technologies, and understanding of CRM are still in its early adapter stage. Most of the CRM technologies are immature and the typical implementation costs and time are long enough to frustrate potential users. Many software and hardware vendors sell themselves as complete CRM solution providers but there are little standardized technologies and protocols for CRM implementation in the market. Even the scope and extent of what CRM includes differ from vendor to vendor; each has different implementation requirements to achieve the customers expectations. CRM is one of the busiest industry which occurs frequent merger and acquisition. Many small companies merge together to compete with large vendor. Large companies such as PeopleSoft acquired small vendor to enter this hot CRM market. Due to these frequent merger and acquisition, the stable technical support from the market becomes rare. Vendors publish new version maybe more integrated software of CRM software as frequently as they can and customers should pay for that.

Often these technical immaturities or unstable conditions are combined with the customer requirements which are frequently unclear and lead the project failure. These technical immaturities may be overcome over time, but the process may be long and painful.

I. State Bank of India strongly believes that a satisfied customer is the most important factor for growth of its business. The Bank was the first in India to introduce a code of Fair Banking Practices in India called Towards Excellence. The code reflected the commitment of the Bank to provide Banking services of a high order to individual banking customers. The code came into effect from October 1997 as part of the Golden Jubilee Celebrations of Indian Independence. The Code was substantially revised in the year 2005 taking into consideration the transformation in banking practices and customer service standards that have since taken place. II. In February 2006, Reserve Bank of India set up the Banking Codes and Standards Board of India (BCSBI) as an independent autonomous watchdog to ensure that customers get fair treatment in their dealings with Banks. The BCSBI has published the Code of Banks Commitments to Customers (the Code) which sets minimum standards of banking practice and benchmarks in customer service for banks to follow. SBI is a member of the BCSBI and has therefore voluntarily adopted the Code as its Fair Practice Code in dealings with its customers. III. This document called the Citizens Charter of State Bank of India provides key information on various facilities/services provided to customers in ordinary branches of State Bank of India. The Code together with the Citizens Charter will thus ensure high standards of accountability, responsibility and transparency in the Banks dealings with customers. The Charter also provides comprehensive information on Banks Grievance

redressal mechanism. It also specifies the obligations on the part of the customers for healthy banker-customer relationship.

VI. The Charter provides essential information on transactions relating to savings, current and fixed deposit accounts, collections and remittances, grievance redressal etc. This thus saves time of the customer. VIII. SBI provides feedback service to all its customers. In that service it requests all its customers to keep them informed of their experiences about the customer services rendered at the banks branches and feel free to comment on the Code and Citizens Charter. the feedback will help us evaluate, improve and widen our range of services. Your comments and feedback may be sent to the address given in paragraph VI above Strategy for expanding customer base Driven by competition, SBI banks increased making their services customerfriendly. The three key components of strategies to expand and retain the customer base used are as follows : Product life cycle strategy Appropriate targeting Expanding product portfolio

1- Product Life Cycle Strategy

Product life cycle strategy means addressing the concerns of the customers throughout the life cycle of the banking products. The product life-cycle strategy of SBI bank product comprises: Identifying target markets; Developing and designing suitable products; Marketing the products; Sales and advice processes; After-sales service; and Complaint handling.

2- Appropriate targeting SBI Bank focused on customer profiles and offered differentiated deposit and credit products to various categories of customers depending on their income category, age group and background. For example the banks segmented various categories of customers to offer targeted products, such as Private Banking for high net worth individuals, Defence Banking Services for defence personnel, and Special Savings Accounts for trusts. Bank used multiple channels to target specific segments of population. Bank delivered their products and services through a variety of channels, ranging from traditional bank branches, extension counters and satellite offices, to ATMs, call centres and the Internet. They also appointed direct marketing agents or associates, who deliver retail credit products. These agents helped the bank achieve deeper penetration by offering doorstep service to the customer.

3- Expanding product portfolio To ensure that their customers get 'one-stop solution', a key component of banks' customer strategy it offered an expanded set of products and services. Through their distribution network, bank offered Government of India savings bonds, insurance policies, a variety of mutual fund products, and distribute public offerings of equity shares by Indian companies. As a depository participant of the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), a SBI offered depository share accounts to settle securities transactions in a dematerialized mode and so on. Services to different Customer Groups Developing and properly categorising a customer data base forms part of the core strategy of SBI bank. Bank with a widespread network of branches aims at serving the following broad customer groups. retail customers; corporate customers; international customers; Bank formulated its overall customer strategy to increase profitable business keeping in mind its strengths and weaknesses. The key strategy components and trends in each of these customer groups are: 1- Retail Customers With growing household incomes, the Indian retail financial services market has high growth potential. The key dimensions of the retail strategy of BSI

was to include customer focus, a wide range of products, customer convenience, widespread distribution, strong processes and prudent risk management. The fee income that banks earn while extending commercial banking services to retail customers included retail loan processing fees, credit card and debit card fees, transaction banking fees and fees from distribution of third party products. Cross selling of the entire range of credit and investment products and banking services to customers is often a key aspect of the retail strategy. Retail Lending Activities There is widespread acceptance by the average consumer of using credit to finance purchases. Given this background, retail credit was adopted. Banks also focused on growth in retail deposit base which would include low cost current account and savings bank deposits. Retail deposits are usually more stable than corporate bulk deposits or wholesale deposits. Bank offered a range of retail products, including home loans, automobile loans, commercial vehicle loans, two wheeler loans, personal loans, credit cards, loans against time deposits and loans against shares. Banks also fund dealers who sell automobiles, two wheelers, consumer durables and commercial vehicles. Personal loans are unsecured loans provided to customers who use these funds for various purposes such as higher education, medical expenses, social events and holidays. Personal loans included micro-banking loans, which are relatively small value loans to lower income customers in urban and rural areas.

Credit cards have become an important component of lending to the retail segment. As the Indian economy develops, it is expected that the retail market will seek short-term credit for personal uses, and the use of credit cards will facilitate further extension of banks' retail credit business. 2- Corporate Customers Corporate business covers project finance including infrastructure finance, cross border finance, working capital loans, non-fund based working capital products and other fee-based services. Bank make a special effort to get the business of highly rated corporations. The recent emphasis on infrastructure in India, including projects being built on private-public partnership basis, is leading to profitable business opportunities in this area. Further, Indian companies are also going global, and making large acquisitions abroad. This trend is likely to pick up momentum in future and SBI has geared themselves up to meet such requirements from their customers will gain. There is also a growing demand for foreign exchange services from the corporate customers. SBI offer fee-based products and services including foreign exchange products, documentary credits (such as letter of credit or LC) and guarantees to business enterprises. Corporate customers are also increasingly demanding products and services such as forward contracts and interest rate and currency swaps. 3- International Presence Indian banks while expanding business abroad have usually been leveraging home country links. The emphasis has been on supporting Indian companies

in raising corporate and project finance overseas for their investments in India and abroad (including financing of overseas acquisitions by Indian companies), and extending trade finance and personal financial services (including remittance and deposit products) for non-resident Indians.

CUSTOMER SATISFACTION OF SBI Demographic and banking profile of the customers of State Bank of India.The demographic profile of select customers of State Bank of India reveals that, 67.2 percent of them are male. In term of age, it is evident that 27.6 percent of the customers are falling in the age group ranging between 31-40 years. Graduates accounted for 37.6 percent. Business and profession people dominated the sample with 44.8 percent and 22 percent respectively. In term of marital status, 87.2 percent of the respondents were married. The income statistics revealed that 32.8 percent of the customers were earning their income between Rs.2,50,001Rs.5,00,000 yearly.

The Banking profile of the customers reveals that 53.2 percent of the select customers maintain current account in State Bank of India. 53.6 percent of them are having banking experience ranging between 6-10 years. The convenience of all the customers would be greatly enhanced by an electronic, 24 hour branch. As a result 90.4 percent of the respondents prefer e-banking rather then conventional banking system. 59.2 percent of the respondents have e-banking experience ranging between 1-3 years. 41.6 percent of the respondents use e-banking channels every day.

Summary The implementation of the Tata Consultancy Services (TCS) BaNCS system at the State Bank of India (SBI) represents the largest core systems project ever undertaken. The success of this project should encourage other large banks to begin projects to modernize their core systems. The use of a UNIXbased platform to process more than 100 million accounts daily demonstrates that tier 1 banks can use a mainframe alternative for their core processing. Although TowerGroup expects that the majority of these banks will continue to rely on the IBM mainframe for core processing, they can fully consider the benefits of utilizing a UNIX-based platform. SBI's achievement demonstrates that attention to critical factors is crucial in implementing new core systems. The bank's senior management

commitment, business line involvement, project team staffing and empowerment, and extensive employee training were all key contributors to the success of the project. Management also recognized the need for a proven systems integrator that possessed in-depth expertise in both business and technology. Core systems modernization has allowed the State Bank of India to centralize computer processing and operations functions, offer new banking products to all the citizens of India, reverse a trend of customer attrition, and consolidate its affiliate banks. Additionally, the bank can now further expand its product offerings and improve customer service. ndian%20Management%20January%20-%20March%202012%20Issue.pdf kash.pdf?sequence=1 IMP END OF PROJECT

END OF THE PROJECT MATTER 5.2. Conclusion Conclusion & Recommendations 5.1. Research Summary Customer Relationship Management (CRM) is an organizational strategy that can assist a bank to build lasting relationship with its clients and improve its performance by increasing revenue and productivity. CRM in the banking industry is of great importance. Today, banking is more customer-centric, unlike the yester when it was transaction-centric. CRM is essential and vital function of customer oriented marketing. However there is more to CRM than just client management. CRM is a broad approach to create, maintain, and expand relationship with customers. It is a strategic plan that aims in understanding, anticipating, managing and personalizing the organizational needs of current as well as potential customers. The idea behind this is that it would help the bank to effectively utilize technology and other resources to gain insight into the clients behaviour and customers values. If adapted and implemented successfully, CRM can help banks provide better customer service, make banking operations more efficient and

simplify selling and marketing processes. CRM is a comprehensive approach to cater, maintain and expand customer relationships. It is important for banks to use CRM strategy that aims to understand, anticipate, manage and personalize the needs of banks current and potential customers. CRM applications deliver many benefits across organizational processes and functions. It reshapes the workplace environment and influences the ways business being carried. Successful integration or adaption of CRM system in the banks may not be as easy as it looks. Every concept has limitations such as limitation of finance, resistance to change, government regulations, etc.; so does the CRM in banks. Banks can overcome many of the limitations by efficiency managing CRM and adapting some comprehensive CRM model along with effective CRM software. Managers play an important role to minimize risks. CRM manager is a key factor who can effectively manage the issues related to CRM. It is vital for banks that their CRM applications and systems are supported and controlled by qualified and experienced manager. Bringing together trained and professional staff, encouraging communication and coordination among them, promoting team working and instructing ways in quality service, are some of the duties managers have to perform in order for CRM to work efficiently and harvest benefits. The banks need CRM to survive as it is impossible nowadays not to focus upon the customer expectations. CRM is needed because of ever changing technology and highly competitive banking sector in India. The importance of CRM can be assessed by evaluating CRM that provides enhanced opportunities to use data and information to both understand customers and create value. The ultimate purpose of the CRM is to improve performance

and to assess how well the bank needs are met by CRM adaption and implementation.

The aim of this dissertation was to examine the importance of CRM for HDFC Bank. To achieve this aim, following objectives were set: To analyze the effectiveness and efficiency of CRM services provided by the HDFC Bank, to examine the effects of CRM on business performance and operational effectiveness and to evaluate the improvements in customer service due to it, to assess the awareness of the bank employees to the concept of CRM and its benefits for the organization, to determine the extent of customer satisfaction level by conducting interviews, distributing questionnaire and carrying out a survey in HDFC Bank, to gather relevant data and critically analyzing it using a vast variety of sources and research tools. The researcher believes that each and every objective has been achieved. The researcher applied most relevant research tools and applications to gather valid and reliable data. The data collected from secondary sources like books, latest journals and articles, websites, etc. has been critically analyzed by taking into account theories, concepts, arguments and debates on CRM and related issues by various academic scholars. The data collected by applying primary resources has been analyzed and presented in data analysis section. The researcher ensured that the data collected is valid and relates to literature review and aim and objectives of the dissertation.

The results produced by the research provides information on how effectively HDFC Bank has managed to use CRM system and applications and how efficient it has been in applying CRM tools, processes and strategy. By incorporating CRM effectively, the bank has improved its performance as well as the performance of its employees. Bank profitability has increased and the so does the customer satisfaction. Changes produced by CRM are intense. CRM has helped the bank to access ideas and experiences from variety of sources. CRM applications have delivered many benefits across bank operations, organizational processes and functions. CRM has improved information and increased knowledge management. It helped to reduce costs of transaction and increased speed and reliability of transactions. CRM technology has also improved effective communications and service quality. In conclusion, CRM is important as it has positively influenced every business function which helped in improving the customer service and relations. Conclusion A banks ability to identify customer needs, segment customers and build accurate customer profiles, all depend on how effectively it collects, manages and uses customer data. Banks need to realise which type of information they need, harvest it carefully, store it safely, keep it updated and use it proactively to cross- sell, improve customer experience and deepen relationships. Today data access is no longer a challenge, rather banks have access to loads of customer information, but the challenge still lies in converting this into business

advantage. This implies that CRM needs to address the gap of converting data into customer insights which proliferates profitable customer relationships across multiple touch points. The strategic framework suggested for effective implementation of CRM emphasises the importance of understanding CRM as an organisation wide strategy and need for alignment of banks culture and processes to bring customer centricity at the core of operations. The framework recommends leadership and motivation driven by top management to optimise customer relationships on the basis of customer information.It points outthe need fortraining at all levels along with coordination and communication amongst various departments. Thus, a strategic approach towards CRM implementation will enable attainment of the desired benefits of the CRM investments made by banks.

5.3. Recommendations HDFC Bank has achieved almost all its objectives by introducing CRM technology and processes within the bank. They have received better response from employees and customers than expected. But they still lack in some areas such as cooperation and coordination, effective integration, and efficient use of latest technology. The bank can improve further by updating its CRM policies and procedures. After gathering data and doing analysis, the researcher noticed and considered few drawbacks in the bank system and

policies and the approach it has taken. Following are some important recommendations: Recommendation 1: The bank can improve its performance and can better evaluate the results if it has set objectives. It must also ensure that the CRM has defined and documented objectives. It must be properly aligned to other banking systems and functions and must also be part of bank mission statement and bank strategies. By doing this, bank can make the working environment effective and promote flexibility. Recommendation 2: The results provide some information about the service provided by the employees to customers. Although the customers agree that the service has improved but few have complaints. Even the employees feel that service should be improved. The bank must concentrate on employee training and continuous development especially in the ever changing and constantly updating technological environment. The bank is committed in employee development but they must focus on soft skills areas of training. Employees must be taught how to effectively use and apply CRM technology to provide quality service to customers. Training and development can provide necessary skills and make employees, more experienced and competent. Recommendation 3: CRM is still developing stages in the bank. The management can show commitment by developing a personal bank strategy regarding the use of CRM system, processes, procedures, tools and CRM policies. The management need to focus on bank mission and, strategic vision and ethical stance when designing CRM strategy. Incorporating CRM

related issues in strategic planning; the bank can increase the trust of all stakeholders and satisfy them that the bank is interested in their well-being. Recommendations 4: The bank can never ignore the environmental factors that may influence and negatively affect the CRM related decisions. The factors include social and cultural issues as the bank cannot adapt the CRM without taking into account the Indian environment and its requirements; legal and political issues, and other technological issues. Recommendation 5: By empowering employees and involving them in decision making process can increase their morale and satisfaction. They will feel more motivated and will work more effectively serving customers to the best of their abilities. They will enthusiastically learn the latest CRM technology and will apply it successfully. By providing them facilities to deal with customers queries will help the bank to improve the customer relationship management. Recommendation 6: Evaluation of the CRM requirements, its use and its effects can help identify whether it is working efficiently. It will also help fulfil CRM needs and will solve problems thus improving bank performance. There are many other recommendations that can be provided but the bank must focus on major issues first. Other recommendation may include 24/7 call centre where customers can contact for services, central database for employees to get all the information, providing feedback on the website, etc. 5.4. Future Agenda

This dissertation identified a number of variables related to adaption and use of CRM in HDFC bank by the management. A number of limitations need to be noted regarding the present study. Although the researcher tried to cover each CRM related issue in detail but due to submission deadline of this research and other limitations, many targets were remained unachieved such as analyzing the effect of CRM on employees at different hierarchical levels and customers of different types like commercial and corporate. A similar study with extensive approach would allow a more detailed analysis. This research does not propose any new theory. The researcher adapted conservative approach to the dissertation and studied already available theories by analyzing the importance of CRM for an Indian Bank. This however, cannot represent the impact of CRM on Indian banks as many banks are still on CRM implementation phase and different banks have different environments. The current study was also unable to analyses the effect of environmental factors i.e. legal, political, social and other technological factors. Future researchers could take all these matters into consideration when carrying out their research. A number of possible future studies using the same experimental set up are apparent. This research has thrown up many questions in need of further investigation. One question for the future researches, which this study slightly touched, is the importance of Information and Communication Technology (ICT) which not only helps in effective adaption and use of CRM but it has its individual importance for employee and customer satisfaction. Further work can be carried out on the CRM models which can be adapted by companies specific to their requirements.

5.5. Reflective Report The reflection sheet is reported in informal format e.g. using I instead of the researcher. The research was a learning and development experience in which knowledge boundaries and parameters have been expanded. This dissertation taught me the value of time. I focused on one of the main contemporary issues and emphasised on the value and importance of CRM for Indian Bank. Learning outcomes through this study include critical analysis, assessment and evaluation of the literature and data collected. I have practically applied different research methods taught by the professors in university lectures. The practice helped me gain necessary knowledge of selecting, scrutinizing, testing and applying research tools and approaches. The main problems faced were limitation of time and finance, limited access to people and natural bias among the surveyed population but the skills and useful experience gained earlier helped me overcome or minimize most of the limitations. Before the actual commencement of the research, I needed to understand what CRM was and why it was becoming important for modern banking environment. It was highly important to get knowledge of the ways it could be adapted and used in the business operations. I believe that I have managed to sort out all the research activities and have given appropriate time to each task individually by applying best available research tools. Most appropriate methods relevant to my research study have been selected to research real, relevant, valid and reliable data. I have managed to gain a clearer overview of the learning process. This dissertation helped me gain insight into my strengths and weakness and taught me how to use my strengths to overcome weaknesses, exploit opportunities and reduce threats

and risks. Due to this project, I realized learning strategies that suit my personal needs. Also added to my experience is the capability in planning and overcoming learning difficulties. I understood and do appreciated the importance of self-evaluation in the role of improving myself. I dont think there is differently to be done next time as I consider myself proficient in carrying out a research project now, though I will keep on learning new methods and techniques. I honestly believe that I have performed to the best of my ability.