Chapter 3 CRM Practices in Public Sector Banks 3.1. CRM practices in the Public Sector Banks ‘The data relating to the three selected public sector banks- SBI, OBC and Punjab National Bank is collected based on the conceptualization and frame of reference as given in chapters one and two. ‘The public sector banks are comparatively, large banks in India in terms of profits, assets, deposits, branches and employees. The public sector banks that have been included in the study are State Bank of India, Punjab National Bank and Oriental Bank of Commerce. Public sector banks which are trying to shed their ancient garb often associated with bureaucracy and red-tapism, are going all out in becoming technology savvy and orienting their staff to be more customer friendly. There ig no other way to face the growing competition from their private sector compatriots. State Bank of India 381 was nationalized on July 19, 1960. The State Bank of India is India's largest commercial bank and is ranked one of the top five banks world wide. It serves 100 million customers through a network of more than 10,000 branches and it offers either directly or through subsidiaries a wide range of banking services. Subsidiaries of SBI are: 1. State Bank of Bikaner & 4. State Bank of Mysore Jaipur 5. State bank of Saurastra 2. State Bank of Hyderabad 6. State Bank of Travancore 3. State Bank of Indore “‘The SBI formally recognized CRM business strategy as a core value of the bank in 1988 before acquiring CRM-related technologies since then, the bank has continually redefined vision of relationship management and how best to apply it at customer interface. It has acquired technology and integrated them into the bank's infrastructure. CRM Initiatives at the SBI Unlike most financial organizations that claim a commitment to CRM, the SBI has been investing in CRM methodologies and related technologies for well over 10 years. This span of time has allowed the SBI to refine its thinking and customer strategies while continuing to invest in relationship-fostering technologies. Evolution of 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 June 2, 1806, Three years later the bank received its charter and was re- designed as the Bank of Bengal (January 2, 1809). A unique institution, it was the frst joint-stock bank of British India sponsored by the Government of Bengal ‘The Bank of Bombay (April 15, 1840) and the Bank of Madras (July 1, 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on January 27, 1901. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, 63shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. World wide network of SBI: SBI has 52 foreign offices in 34 countries*. SBI India serves the International needs of its foreign customers, in addition to conducting retail operations. The focus of the offices of SBI is India-elated business. SBI is the premier commercial bank in India and is the driving force behind rural development, industrial diversification and technological upgradation The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. All branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes. Its business is more than banking because it touches the lives of people anywhere in many ways. PERSONAL BANKING State Bank of India offers a wide range of services in the Personal Banking Segment which are mentioned here. i. SBI Term Deposits ii. SBI Loan For Pensioners iii, $B] Recurring Deposits iv, Loan Against Mortgage Of Property v. SBI Housing Loan vi, Loan Against Shares & Debentures vii. SBI Car Loan viii, Rent Plus Scheme ix. SBI Educational Loan x. Medi-Plus Scheme xi. SBI Personal Loan xii, Rates Of Interest * source: wenw sbi in, dated-August 16, 2008 64‘A whole new world of personal banking can be experienced through personal panking branches (PBB) often dubbed as boutique branches by others, customer friendly knowledgeable statf caters to financial requirements with speed and efficiency in an excellent way. The PBBs have different minimum thresholds for customers business to ensure the exclusive level of service PERSONAL FINANCE State Bank of India has a variety of schemes under Personal Finance to satisfy varying needs of the banking public. The Bank offers the following schemes with attractive rates of interest such as- |. Loan For ESOPS ix, Loan Against Housing Loan Shares/Debentures Easy Travel Loan x. Festival Loans iv. Car Loan xi, Medi-Plus Scheme v. Educational Loan xii, Teachers-Plus Scheme vi. Personal Loan xiii, Sainik-Plus Scheme vii. Property Loan xiv. TribakPlus Scheme vii. Loan to Pensioners xv. EMI Calculator xiv. Credit Khazana SERVICES Slate Bank of India offers a wide range of services in the Personal Banking Segment, like- i. eZtrade@sbi ii SBI VISHWA YATRA FOREIGN TRAVEL CARD ii, PAY ROLL CARDS iv. ATM SERVICES v. GIFT CARDS vi. GIFT CHEQUES i, INTERNET BANKING FOREIGN INWARD REMITTANCE LOCKER 65AGRICULTURE / RURAL BANKING state Bank of India caters to the needs of agriculturists and landless agricultural labourers through a network of 6600 rural and semi-urban branches. There are 972 specialized branches which have been set up in different parts of the couriy exclusively for the development of agriculture through credit deployment. These branches clude 427 Ayricultural Development Branches (ANBs) and 547 branches with Development Banking Department (DBDs) which cater to aayicultuists and 2 Agricultural Business Branches at Chennal and Hyderabad catering to the needs of hitech commercial agricultural projects. The branches have covered a whole gamut of agricultural activities like crop production, Horticulture , plantation erops, farm mechanization, land development and reclamation, digging of wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns, processing of agri-products, finance to agrkinput dealers, allied activities like dairy , fisheries, poultty, sheep-goat, piagery and rearing of silk worms. The branch also has farmer's meet in villages to explain to farmers about various schemes offered by the bank. To give special focus to agriculture lending Bank has set up agri business unit. Bank has also agri specialists in various disciplines to handle projects! guide farmers in their agri ventures. Advances are given for very small activity covering poorest of the poor to hitech activities involving large fund outlays. NRI SERVICES The bank has products and services customised with significant global footprint to suit one’s banking needs. Spreading its arms around the world, the SBI's International Banking Group delivers the full range of cross-border finance 66——— solutions through its four wings ~ the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division. The Domestic wing provides services like merchant banking, shipping finance and project export finance. The Foreign Offices wing offers the entire range of international trade and industrial finance products, while the Kolkata-based Foreign Department undertakes treasury and currency operations, The International Services division renders specialized services like global link services and bank risk exposure monitoring. Being India's largest and most trusted commercial bank, the SBI offers a network of relationships unmatched in strenath and span by any other Indian financial entity. The bank has a network of 66 offices/branches in 29 countries spanning all time zones". The SBI's international presence is supplemented by @ group of Overseas and NRI branches in India and links with over 522 leading banks of the world, SBI's offshore joint ventures and subsidiaries enhance its global stature. The bank has carved @ niche for itself in Euroland with branches strategically located in Paris, Frankfurt and Antwerp. Indian banks and corporates are able to avail single-window Euro services from SBI Frankfurt These strengths are reinforced by @ dedicated and highly skilled team of professionals deployed by the bank in each specific segment CORPORATE BANKING SBI ie a one shop providing financial products / services of @ wide range for large, medium and small customers both domestic and international. * Scurce: www 09 in, dated-August 16, 2008 67It has strategic business units like (i) Corporate Accounts Group (CAG), (ii) Project Finance and (li) Lease Finance. Corporate accounts group (CAG) of SBI is a perfect strategic fit that emphasises on market leader image, focussed attention, flexible & customer - friendly credit policies, structured products ~ fund based & fee based, timely, comprehensive and assured delivery, competitive pricing and highly skilled credit expertise. CAG is SBI's proactive response to emerging market needs. CAG is Strategic Business Unit of SBI, set up exclusively to cater to the specialised banking needs of top corporate clients of the country. It is the direct outcome of SBI's structural reorganisation in the light of deregulation, globalisation & liberalisation of the Banking Industry. Created in the year 1995, CAG's mission is to: i. Focus on top corporate clients. ii. Establish itself as the most professional outfit of its kind in the country ili, Render world class and cost effective financial services iv. Evolve new products on a sustained basis-customised to the changing needs of the corporates v. Stay ahead of competitors vi. Quality Relationship Banking Exclusive, highly skilled Relationship teams of dynamic and motivated personnel, each attending to a select group of top Corporates providing a one-stop-shop for financial services presently at Mumbai, New Delhi, Calcutta, Chennai and Ahmedabad. vil, Offer of wider and sophisticated products apart from 2 variety of core credit products including structured finance and multi-purpose short term corpgrate loan, CAG offers an array of customer specific, 68.products like Cash Management Product, Treasury & Forex products and Merchant Banking products in association with SBI Capital Markets Ltd., SBI Gilts Ltd. and other subsidiaries of SBI. PRODUCTS AND SERVICES 50] offers to its customers the following products and services such as- i. Working Capital Finance xi, SBI Vishwa Yatra foreign travel ii, Project Finance card ii, Deferred Payment Gaurantees Broking services iv. Corporate Term Loans xiv. Revised service charges v. Structured Finance xv. ATM services vi. Dealer Financing xvi. Internet banking vii, Channel Financing xvii, e-pay vil, Equipment Leasing xviii, e-rail ix. Loan Syndication xix. Rbieft x, Financing Indian Firms xx. Safe deposit locker Overseas Subsidiaries or JVs xxi. Gift cheques xi, Domestic treasury xxii, MICR codes INTERNET BANKING The Internet banking portal of the bank, enables its retail banking customers to operate their accounts all across India, removing the restrictions imposed by geography and time. It's a platform that enables the customers to carry out their banking activities from their desktop, aided Py the power and convenience of the Internet. Availing the Intemet banking services, one can do the following normal banking transactions online such as- i. Self-account funds transfer across India. 69Third party transfers in the same branch ii, New account opening iv. Demand Draft requests v. Standing instructions yi. New Cheque-book request and much more. Apart from these, the other salient value-added features available are: i. Railway tickets booking, vi. Credit card dues payments, ii, Utility bill payments vii, Deposit your taxes, ji, LIC and other insurance vil, Donations to your religious premia payments, inspirations iv. SBI Mutual funds Investments ix. Donations to Red Cross and v. Remit Subscription to PPF such other organisations account, x. Setting up SMS alerts for transaction information. STATE BANK NETWORKED ATM SERVICES State Bank offers the convenience of over 8500 ATMs in India, the largest network in the country and continuing to expand fast. This means that one can transact free of cost at the ATMs of State Bank Group (This includes the ATMS of State Bank of India as well as the Associate Banks — namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card. Bank’s main activities consist of banking services. SBI has many branch offices throughout NCR and more than 4 million customers, of whom 1.6 million are e- banking customers. With its strong network and local establishments in NCR, SBI 10has attained this position by offering the best services and products and thus contributing to the growth of its customers. SBI's lasting and close business relationships with its customers has involved continuous product development, with services and products at the cutting edge of technology, and this will also benefit the bank's other corporate customers. This takes place with the same high service level and customer-oriented solutions. This is all to help its customers and the bank to grow. $81's banking concept is to offer financial advice and to handle financial risks and transactions for customers and private individuals in @ way that creates customer satisfaction, while giving shareholders a competitive retum. SBI vision to be a leading NCR bank based upon long term customer relations, competence and e-technology SBI's strategy is to keep building on the banking traditional factors of strength as a financial partner to companies and financially active, demanding private individuals and to consolidate its position In its present markets. The following three areas continue to be of top priority: increased customer satisfaction, improved co-operation and cross selling within the customer group, increased cost efficiency. Data Analysis Data is analysed in two parts, firstly a within case analysis is done Secondly a cross case analysis/comparative analysis is done where all the three cases 'S compared with each other in chapter five. The analysis is presented in such a way that addresses the various research queries of this study, 1case Analysis of State Bank of India B's Branch Manager's views about CRM is discussed below. CRM Definition and Benefits in SBI The head of CRM department, defines CRM as “marketing, sales and support gystem to be applied from customer to customer basis. Offering the right service to the right customers at the right time.” Ihe bank has a broad vision about CRM When it came to the application of CRM, the bank looked at competitors, multi channel environment and the customer satisfaction, because these were external environment ingredients. These were the forces that motivate any organization to restructure the business philosophy. $8] looked at CRM as marketing, sales and support system supported by looking CRM as integrating the activities of marketing, sales and service to achieve a common goal. SBI applied CRM from customer to customer basis by offering the right service to the right customer at the right time. SBI looks at the right service that fits the customer's needs and right time when customer needs that service According to SBI, it not only !ooked ints its internal environment, which includes its management goals, but also closely monitors its extemal environment, competitors, multi-channel environment (new technologies) and level of customer satisfaction to compete with newly increasing competitive pressures, financial institutions must recognize. On the basis of the survey results it may be concluded that 86% of the SBI branch managers define and look at CRM as integrating the activities of marketing, sales and service to achieve @ common CRM goal. State Bank of India looks towards its goals by having long-termrelationships and satisfying customers in the globally changing competitiveness and focus is on managing customer relationships, and in particular customer satisfaction, in order to efficiently maximize revenues. CRM Process in State Bank of India The bank handles the CRM process in a technical way, by collecting the information about its customers from data warehouse and customer meetings. The bank uses the collected information for analysis, which finally helps to form strategy and to introduce new customer offers that suits most of the customers. Through broad product offering the bank helps companies release capital through efficient payment routines and create conditions for growth with the aid of a number of different financing solutions. The bank also offers the corporate customers a number of different investment options to create the best yield for excess liquidity. The bank uses branch phone, web site, email, direct mail and advertising channels to interact with ils customers. Bocause the bank feels that different customers have different business setup and it is good to exploit different channels to bring most of the customer segment into the bank umbrella. One of the most important strengths of bank is the ability to meet the customers at an early stage of their intemal and external financial processes. This has meant long-term relationships with customers at the very cutting edge of the market The bank is working on customer-oriented strategy rather than the old push philosophy. According to the head of the CRM department, the basic goal to interact with customer was customer, share holders and staff satisfaction The Bank monitor the customer very closely and reacts when the customer needs it, ether itis a needior credit or any other business problem, ye customers can use the Internet and phone around the clock and can use the nk service. The bank not only just applied the CRM and then followed it up but also has @ separate division which monitors the whole process by having 2 telephone survey to check the customer satisfaction. The biggest challenge the bank faces is the activity of the employee, when bank is providing the customer loriented service to meet the customer with a smiling face and even some times when the customer is demanding which is near to impossible. ties while dealing with its customer base, firstly at the SBI has two major ac central level it collects customer information, analyzes and forms new and modifies old strategies to enhance customer relationship and satisfaction level with customers. Secondly, SBI gets knowledge about customers at the branch level Information Gathering SBI is assembling information about customers by collecting the information about its customers from data warehouse and customer meetings Market Planning lected information for analysis, which finally helps to form a 0 strategy and to introduce the right offer, atthe right ime, using the best channel SBI uses the col 4Customer Interaction At this stage customer related information and offers are managed by using different channels and front office applications Analysis and refinement tthe analysis stage bank not only applies the CRM but also follows it up. Bank conducts telephonic surveys, receives responses from ts customers and analyses and refines its products, Awareness 81 gathers information about different new customers. In the same way there are also customer who try to contact with SBI to get some information Exploration $81 collects information using customers website, news Papers, meeting, trade shows of from any other source. At this stage relationship is at its early stage. Expansion This is the stage when SBI signs contracts with its new customers These contracts can be from an account opening to some credit deal. Commitment SBI tries to enhance its co-operation with its customers by giving the services in a reasonable manner. Dissolution Some customers prefer to end deals with SBI, but SBI fails to keep track of such types of customers. The bank employees make very little effort to retain thecustomer. RM Technology in SBI Bank is using different type of computer applications at different levels, like front end applications that the employees at bank uses while interacting with the customer. The higher management uses analytical applications while forming the strategies. And finally, the data bases are used to store customer information for future use. To interact with customers the bank is using technology softwares to interact with its business customers such as- ‘A. Call centre automation B. Campaign management, ¢C. Contact management, D. Data warehousing, E. Field service automation, F, Knowledge management, G. Marketing automation, H. Personalization, |, Sales force automation. The bank views CRM technology as customer-centric process which helps to automate the whole processes of handling all the information manually. By using IT, $81 is facilitating and enhancing its relationship with customers by providing various customized offers. By using SBI's website customers oan check accounts, pay ulilty bills or other payments at any days any time. SBI believes that technology in banking is very crucial to be the customer-centric. CRM Organizational Structure and People The organization structure is divided into client teams comprising client executives and account managers working under the customer relationship 76manager. The CRM department's responsibilities is to co-ordinate and develop business with customers. The customer relationship manager tries to help the customer in all the possible ways. Local branch looks into the customer's different needs modifies its offers and presents it to the desiring customers. The bank has different trainings programs to enhance its staffs skills. The training program called sales and strategy includes the CRM segment and is designed for the staffs in marketing, advertising end CRM departments, PUNJAB NATIONAL BANK With its presence virtually in all the important centres of the country, Punjab National Bank offers a wide variety of banking services which includes comorate and personal banking, industrial finance, agricultural finance, financing of trade and intemational banking. Among the clients of the bank are Indian conglomerates, medium and small industrial units, exporters, non resident Indians and muttinational companies. The large presence and vast resuuiue base have helped the bank to build strong links with trade and industry Punjab National Bank is serving over 3.5 crore customers through 4540 Offices including 421 extension counters which is largest amongst Nationalized Banks. Punjab National Bank with 112 year tradition of sound and prudent banking is one among 300 global companies and seven Indian companies which are expected to emerge as challengers to World's leading blue chip companies. While among top 1000 world banks, “The Banker’, the leading magazine in London, has placed PNB at the 248th position, the bank featured at 1308th 7position among Forbe's Global 2000 list of global giants and fast growing companies. atthe same time, the bank has been conscious of its social responsibilities by financing agriculture and allied activities and small scale industries (SS!) Considering the importance of small scale industries bank has established 31 specialised branches to finance exclusively such industries. ‘The bank has been focusing on expanding its operations outside India and has idenified some of the emerging economies which offer large business potential Bank has set up representative offices at Almaty in Kazakhistan, ‘Shanghai in China and in London. Besides, bank has also opened a full fledged Branch in Kabul, Afghanistan. Keeping in tune with changing times and to provide its customers more efficient and speedy service, the bank has taken major initiative in the field of computerization. All the branches of the bank have been computerized. The bank has also launched aggressively the concept of "Any Time, Any Where Banking” through the introduction of Centralized Banking Solution (CBS) and over 2409 offices have already been brought under its ambit. PNB also offers Internet Banking services In the country for corporates as well as individuals. Intemet Banking services are available through all branches of the bank networked under CRS. Providing 24 hours, 365 days banking right from the PC of the user, Intemet Banking offers world class banking facilities like anytime, anywhere access to account, complete details of transactions, and stalement of account, online information of deposits, loans overdraft account 8etc. PNB has recently introduced Online Payment Facility for railway reservation through IRCTG Payment Gateway Project and Online Utilty Bill payment Services which allows Internet Banking account holders to pay their telenhone, mobile, electricity, insurance and other bills anytime from anywhere from their desktop. Another step taken by PNB in meeting the changing aspirations of its clientele is the launch of its Debit card, which is also an ATM card. It enables the card holder to buy goods and services at over 99270 merchant establishments across the country. Besides, the card can be used to withdraw cash at more than 25000 [ATMs, where the ‘Maestro’ logo is displayed, apart from tlie PND'® over 4094 ATMs and tie up arrangements with other Banks. Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the distinction of being the first Indian bank to have been started solely with Indian capital. The bank was nationalised in July, 1969 along with 13 other panks. Fron its modest boginning, the hank has arown in size and stature fo become a frontline banking institution in India at present. itis a professionally managed bank with a successful track record of over 110 years. It has largest branch network in India with 4525 offices including 432 Extension Counters spread throughout the country. Strategic business ree of the bank covers the large Indo-Gangetic belt and the metropolitan centres. Organisational Structure Bank has its corporate office at New Delhi and 26 Zonal Offices which in turn supervise 47 Regional Offices under which the branches function. The 9delegation of powers is decentralised up to the branch level to faciltate quick decision making. ‘the bank serves the customers with the following wide variety of corporate banking services such as- i. Personal banking ji, Industrial finance ii, Agricultural finance iv, Financing of trade y. Intemational Banking Punjab National Bank has been ranked 38" amongst top 900 companies by the economic times. PNB has eamed 9" position among top 50 trusted brands in India. Punjab National Bank India maintains relationship with more than 200 hundred leading international bank world wide. PNB India has rupee drawing arrangements with 15 exchange companies in UAE and one in Singapore: PNB's IT setup: As any other financial institution PNB also has a number of applications network. The bank is using Cisco Products which is a networking hardware. NIBM (National Institute of Bank Management) has developed a unique storage solution for PNB. PNB has hired network systems to implement the selected solution like firewall, bio metrics, PKI etc. for the security purposes, Today a bank has a Wide Area Network (WAN) with major network of thousands of ATMs and is growing very soon. All these ATMs are connected with base-24 switch from FSS. This helps the bank to increase the reach of its customers. 80As part of its future road map the bank for its CRM initiatives has come with @ customer relationship centre, in addition to a virtual internet branch thinking of setting up a video conferencing system at 30 locations. It has placed an order with siemens information system for the same. To further strengthen its position in the industry, PNB has plans to setup PNB institute of information technology in Lucknow. Apart from providing training to bankers, this autonomous body would also research and develop products for the banking industry. Punjab National Bank of India is also a member of swift and more than 150 PNB Branches are connected with terminals in Mumbai. It promotes "Any Time, Any Where Banking”. The following services are available online such as- i. Access to account ji, Complete details of transactions and statement of account iii, Online information of deposits, loan overdraft account etc: iv. Online payment facility for rallway reservation through IRCTC payment gateway project v. Online utility bill payment services which allows internet banking account holders to pay their telephone, mobile, electricity, insurance and other bills any time from any where from their desktop. PNB has branches in all the seven metropolitan and cosmopolitan cities in India namely New Delhi, Mumbai, Kolkata, Chennai, Banglore, Hyderabad and Ahemdabad, It even has its branches in small town in both urban as well as rural areas. PNB is always focusing on expanding abroad and til date has identified some emerging economies abroad. They are in few of the places like China, London, Sanghai, Kabul etcpNB Mutual fund services are distributed under the scheme of principal PNB asset management company from its assigned branches. The varieties of PNB mutual fund are as under- i. Principal growth scheme Principal balanced fund Principal income fund iv. Principal income fund-short term debt v. Principal cash management fund vi. Principal index fund vii. Principal government securities fund PNB banks on IT to improve services Public sector banks are trying to compete with private banks to offer better senvices and automation is their best bet. Punjab National Bank has taken major steps towards technology up-gradation. Set up more than a century ago in 1895, Punjab National Bank (PNB) today is the second largest public sector bank in the county (after State Bank of India), with a business of Rs. 1,00,000 crore. The bank has an extensive employee base of 56,000 people in 4, 228 branches across the country, and has a customer base of 30 million, Besides making a mark in terms of revenues, the bank-among the few technology sawy PSUs was now setting examples for other banks, especially PSUs. Recognizing this effort, the Institute for Development and Research in Banking Technology (IDRBT). @ division of the Reserve Bank of India (RBI), presented PNB with the award for excellence in banking technology trangformation started only two-and-a half years back at PNB. In March 2000, the bank had only 36 percent of its business computers, as against 64 percent today, 82the first and foremost requirements for this technology transaction transformation was centralized core banking system. PNB tied up with Infosys in tne first phase had acquired the software package. In April this year, PNB implanted this core banking solution at its eight branches-six in New Delhi and wo in Mumbai, Today, the number of locations had increased to 12. As far as the central banking is concemed, PNB has a data centre at the corporate office. The focus now for most public sector banks is to promote retail banking activity and augment their fee based income. Banks these days finance almost anything from homes to cars, consumer durables, education, schemes for senior citizens, schemes for children etc, and also retail mutual funds and insurance thereby converting into a one stop financial services supermarket PNB, the country’s second largest public sector bank has taken the business of ‘keeping pace with times’ very seriously. Engaging ‘Gartner an international IT consultancy fim as its Technology consultant, was part of the banks iniiatives, for evolving business and IT strategies for the bank in the millennium. The bank intends to expand its activities in core-banking, internet banking, myriad of delivery channels, like ATMs and Kiosks, reaching to customers through several touch points, using wide area networking, tt is all known for its CRM strategy with PRO (profit, relationship. and optimization) and with its cross-analysis and segments of evaluating the existing and potential profits of customer instead of existing profits of @ bank. PRO is a combination of customer profiling, customer targeting and sales contact planning PNB has commenced a program geared to developing specific channel and 83product offerings to all groups within its customer base (for example, the preferences of new technology) so as to analyze the value of individual customers and to estimate how much to invest, It has increased the customer retaining rate by one-third with applications of customer information end technology, with-in Case Analysis of Punjab National Bank Punjab National Bank is a NCR universal bank with 2 highly decentralized from of an organization. The heart of the bank is its large network of branches The asic concept ie that the organization and work methods are based on the branches responsibility for individual customers. The branch has total responsibilty for all customers in their respective geographic areas, including major corporate clients. The branches coordinated the central and regional resources to give customers the best possible service. Punjab National Bank prioritizes high customer service along with the goal of having the lowest costs compared with all the other NCR banks. Punjab National Bank is @ universal bank, i.e., it covers the entire banking area such as traditional corporate transactions, investment banking and trading, and retail banking including pensions and life insurance. CRM Definition & Benefits in Punjab National Bank The Head of the CRM department viewed CRM as the key to success and said that the bank is following a customer oriented approach by treating every customer as individual. The bank is concentrating towards branches instead of centralized management. The branches are responsible for their business, in 84other words, for their customers. The branch treats every customer as individual and provides services to different customers according to their business needs and location. The bank sees long term relationship as a key to the success and survival in the market. Punjab National Bank has re-structured its business philosophy by putting its customers at the middle and all its banking activities around it Punjab National Bank has developed customer-oriented strategy. On the basis of the survey results it is found that 78% of the PNB branch managers defined and looked at CRM as being a customer-oriented philosophy. Bank argues that long-term relationship will turn these customers into more profitable one by reducing the handling cost and more transactions. Punjab National Bank views the long-term relationships as @ success and survival strategy in the market since long-term relationships are less costly and less resource hungry. CRM Process in Punjab National Bank ‘at the relationship evolution stage, bank uses official economy figures, t2¥ figures, past three years figures, website, personel relations, and news papers or journals to gather information about new or old corporate customer. The information includes new contracts by different companies, new assets, financial statements or other information which can be helpful to know more about the management, market and business position of @ potential business customer. When a bank introduces @ new service, it plans it well and offers it to selected customers who will really benefit from it. 85For interaction, the bank uses different channels according to the requirements of its customers. These channels includes telephone, call centre, branch, ATM, ntemet and field based manager. Branch channel is the strongest channel according to the bank resources. By using these channels the bank establishes relationship with its customer and help them plan their business by getting into credit contracts at the right time or the time when they needed it. Bank feels that establishing a relationship requires mutual trust because financial services are businesses of confidence. To establish this confidence the bank contacts its customers and tells them about the market position and their business needs at times. the bank has the time challenge to maintain the relationship. To cope with this challenge the bank closely works with the customer and listens carefully what customers want. The bank feels that in the CRM process all the five steps that includes market planning, customer interaction, knowledge discovery and analysis & refinement are Impurtant. Cvery step followed the other and the whole process will collapse if the bank skips any one of it Market Planning Bank does market planning by preparing customer offers in a technical way. Customer Interaction The bank helps its customers to plan their business by getting into different credit or other contracts at the right time or the time when customer needs it. Bank uses different channels to establish relationship with its customers. Bank feels that mutual-trust is the first step towards long term relationships, and 86to develop this mutual trust bank contacts with its customers and discusses pout the customer's business needs or requirements, Analysis and Refinement tn accordance with the analysis and refinement stage, barik Keeps on tracking the challenges that the customers were facing at the moment and. while preparing new offers, Kept all those challenges in mind. Bank also tracked its customers and refined its offers, ifit is required. Awareness the bank collects information about different prospective customer This was in accordance with relationship evolution process. Exploration PNB collects information using customers website, news Papers: meeting or from any other source. Expansion Punjab National Bank employees try to give the required information about vaious services offered by the bank to its customers in order to expand its customer base and services transaction base. Commitment PNB consumers commitment was on the top of the agenda for its success. Dissolution PNB always discouraged dissolution process of customers through new possible offers.RM Technology in Punjab National Bank pccording to the Head, CRM “technology has made the industry very compeiitive”. The bank is using online banking by which customers can pay bills and transfer money. The bank has introduced electronic voucher by which business to business transactions are getting very easy. All the online services are highly interactive, The bank is using data base enabled softwares to keep record of all the customers. At PNB customers can get assistance by using banks website from anywhere, any time. Customers can get information, personalized help and can use online banking for checking accounts, paying bills and for transferring money. CRM Organizational Structure and People PNB organizational structure is decentralized because the management believes that the branch has direct interaction with the customer so branch knows exact situation about its customers. Further the branch manager and the assistant branch managers were responsible for all the activities including identification of fight customers and investment opportunities, development of right customer offer, decisions about the time of new customer offerings and customer interaction. The bank also arranged some formal training programs like group discussion within the bratich and between the branches. Especially practical experience in the branch is the main source of educating the staff, The bank is looking towards the technology as the driving force of all the business process in the financial 88industry and the bank is preparing it self for the future technology challenges by investing in it. ORIENTAL BANK OF COMMERCE Established in Lahore on February 19, 1943, Oriental Bank of Commerce made # modest beginning under its Founding Father, Late Ral Bahadur Lala Sohan Lal, the first Chairman of the Bank. Within four years of coming into existence, the Bank had to face the holocaust of partition. Branches in the newly formed Pekistan had to be closed down and the Registered Office had to be shifted from Lahore to Amritsar. Late lala Karam Chand Thapar, the then Chairman of the Bank, in @ unique gesture honoured the commitments made to the depositors from Pakistan and paid every rupee to its departing customers, The foundation of customer service thus laid has ever since remained Oriental Bank's prime philosophy and has been nurtured well as a legacy by all its successors, year after year, Oriental Bank of Commerce was nationalized on April 15, 1980. The OBC Vision is- To be a sound all india, customer centric, efficient retail bank with contemporary size, technology and human capital, endeavouring to enrich lives across all sections of society and committed to upholding the highest standards of corporate governance. The OBC Mission is- ‘To provide the finest banking services by upgrading human capital and infusing advanced technology, thereby achieving total customer satisfaction and being teckoned as the “Best Bank” in the Industry on all efficiency parameters. 89To enhance shareholders’ wealth by ensuring sound growth of business and make valuable contributions to national economic growth. Ofiental Bank of Commerce is amongst the strongest bank in India with high capital adequacy ratio. Its a consistent profit-making bank with one of the lowest spreads in banking industry. The NPA is one of the lowest in banking industry vith the highest productivity per employes. Technology Implementation Oriental bank of Commerce of India has implemented centralized banking solution in 21 branches till date. It gives freedom of ‘anywhere’ and ‘anytime’ pankiny to customers. Intermet Banking The bank has developed a set of electronic identification and signature codes whereby 5 millions of Internet customers can now use across multi-platforms. Directed by CRM, OBC has developed multi-contact channels of e-banking, which is convenient for cuslumers, through the application of WAP (wireless application protocol), such as ATMs, telephone, GSM mobile, PC, and internet website. It has created the service of "A single service agreement and password over all devices.” The following initiatives have been taken for providing better services to the customers such as- i. Branch Expansion: During the year ended 31% March 2007, 63 new Branches have been opened besides upgradation of 65 extention counters as branch, taking the total to 1273 Branches besides 94 Extension Counters. 90ji. IT Initiatives: During the year period ended 31% March 2007, 328 more branches have been brought under Centralised Banking Solution taking CBS branches to 1128 as on March 2007 covering 96% of the Bank's business. Ii, ATMs, - 442 more ATMs were installed/operationalised during the year ended 31 ** March 2007 taking number of ATMs to total 666. It is recognized as Security First Network Bank (SFNB) in 1998 and then developed a CRM system and media interactive technology, to integrate the transactions to offer their services more quickly and conveniently. The bank uses fve criteria to analyze customer information, including net interest revenue (income, expanses, and isk), other revenue (fees, commissions), direct expenses (variable costs), indirect expense (overheads), and risk provision. The customer data also allow it to move from assessing current customer value to potential value, by taking into account such factors as lifestyle change. OBC has moved towards its objective of one-to-one marketing to establish what works and what does not, and it tests refinements on an ongoing basis. The customer response rate has improved by about 40% and the profits of the banks have grown by more than 10% every year. Itis famous for its "Service Quality’. The bank is renowned for its CRM strategy. It took its value discipline as the banking institution which provides omni-bearing services, and adjusts its strategy to develop CRM and the Internet from mergers and acquisitions. Furthermore, it has built up its virtual organization with strategic alliances and collaborative relationships (Intel, Metro Group, Merchants Group, ete.) to find out and satisfy the customers’ needs quickly and directly. It has expanded its services with the apromise of "no satisfaction, no charge" and multiple brands. Within Case Analysis of Oriental Bank of Commerce CRM Definition and Benefits in OBC The relationship manager viewed the CRM as a personal interaction with customers. They spent @ lot of energy and attention to their customers’ needs, especially when they did business with the middle and big sized customers, since they thought that these customers can bring more profit to them. OBC tried to remove the financial barriers facing their customers. The relationship managers of the bank helped them meet their goals and realised their plans. on the basis of the survey results it was found that 70% of the OBC branch managers defined and looked at CRM as personal interaction with its customers. The branch managers viewed CRM as a business strategy. supported by a system and a technology, designed to improve human interactions. OBC looked towards its customers by segmenting into sizes, small, middle and big. According to OBC, Small and big organizations are served by providing them standard products, but big organizations are the one who need extra attention therefore the bank has to create distinguished products for them OBC looked towards customer retention and loyalty. OBC believes that 2 retained and loyal customer will decrease their handling cost and increase profitability. The long term customers are less costly to serve and more profitable. Market planning After gathering the customers information the bank decided who the right customers were, and when to deal with them OBC offered their business 92customers tallor-made solutions, focusing on the customer's needs. Bank views sts customers as its focal point and aims to provide knowledge and advice based on customer needs at the operational, tactical or strategic level. Regular contacts with the Markets Relationship Manager and the connection with other advisers and specialists ensured that competencies constantly reflect customer needs at ali evels. The process enabled the development of strategic communications plang or programs and put the knowledge gained into action. Furthermore, OBC emphasis on the connection between markets relationship manager and the other departments. Customer interaction OBC uses all the channels according to the customer's needs. OBC considers face to face distinguishing features better than other channels because in face to face discussion they gained a better understanding of the customers desires. Analysis & Refinement OBC has procedures far the processing of complaints but it is seldom used. It provides instructions on how to fit a complaint but responded to customers not within a reasonable time. Awareness OBC was inline with awareness stage by getting into personel interactions with its customers. Exploration OBC found awareness a good opportunity and starts collecting information about the prospective customers using different methods.Commitment BC bank employees try their level best to provide the assured services to its customers. Dissolution When a customer plans of quitting OBC, the bank employees make lite effort to retain the customer due to their busy schedule. CRM Technology BC bank uses CRM technology while interacting with the customers. It includes call centre automation, data warehousing, e-mail management, field service automation, marketing automation and contact management. OBC bank offers a wide range of concepts and intemet based tools to support and enhance customer decision-making processes. Their concepts and services are constantly developed and refined to meet the changing needs of their customers. By using CRM technology, OBC provides customers more knowledge about the bank and also gets more customer information According to the CRM manager, CRM technology not only saves banks money but also makes work easier as well as improves customer experience. Organizational Structure and People According to the CRM manager, OBC pays a lot of attention to the customer Ielations area. OBC CRM structure includes corporate sales department and corporate cales managers. Corporate sales department is responsible for the whole CRM process. OBC as an employer gives all new employees @ good'start to their careers by offering a structured approach to their future career development with the New 94Employee Introduction program. Moreover, OBC has its own unique and versatile program, the OBC Trainee Program. The OBC Trainee Program acquaints the employee with the group's strategies, customs and business areas and in this way help them to find the business area where their personal strengths and skills will be of best use. OBC considers practical work to be the best way to build competence. Besides this they offer employees enough time to reflect on their experiences and to focus strictly on learning. The ability to leam and build competence necessitates access to all relevant information They therefore value clarity and openness in conducting different activities across the organization. When organizing training and other learning processes, OBC offers the best up-to-date mixed learning approaches available. People are different, hence the need for a variety of leaming strategies. Learning tasks are Gifferent, demanding variable approaches. Therefore a variety of ways to learn are available including on-the-job learning, traditional classroom work, workshops, work supervision, self-studies, network based leaming. All these approaches are used in combination according to the needs of the individual leamer and his or her specific job. 32 Management of Demand and Supply in Public Sector Banks 3.2.1. Management of Demand and Supply The three public sector banks did not have any specific policies to emoothen the random fluctuations in demand so as to shift demand from peak periods and increase demand in slack periods. The banks leave it to its customers to Jearn when the facilities were crowded and when they were not. Since demand cannot 95be perfectly controlled, it became necessary that these banks consider the efficient management of its resources by altering capacity by increasing it to meet high demand and contracting it in slack periods. Branch manager, sometimes, requested employees with comparatively lesser work on a particular day to help any overburdened employee dealing directly with the customer. However, this became difficult, since there is usually one set of ledgers having all the entries or a single PC. The questionnaire was sent to 20 managers of ea Questionnaire responses:- ich bank in NCR region. Table 3.1 ‘Survey Results of Managers’ Responses aianagenant of Demand and Sal PRE OBE eee mao __nezo mz Sa car a a | RommrTO ORS | Rear ERT RRR) meray? : z = ms Myth=08 (40%) | Myth=07- (85%) | Noideasos (40%) Noides-o2 (10%) | Noigearo# 20%) a your ba to a ge ese oo) [eae eid | aes sal. ” weaticmicen traneaet, | wosor 5m) [ne og aml [Nomen COM) cone No ides-08 25%) Me eer ee ee [re [eT Se ocr Btaporoorate ramets" | a ath | NeSaeos (om alappronste tung | Nolseer04 0%) To you have the tools 10 0%) | Yes=07 (35%) ee (oe) thor bee) [roar oom [Meet relationship with the financial Noidea=07 (35%) | No idea-06 (30%) Nake a7 Pos) into? ‘Are you able to service Yes=12 (60%) | Yes=11 (65%) | Yes=10 (50%) Scrat ticle ot No=05 (25%) | No=02 (10%) | No=O5 (25%) effectively (89. Account = | Ne wdeaeo7 (25%) | Noidea=05 (25%) oriented rather than customer (Nerese=0e Gee) si ee) tee cenesy “Are you ofing the mast Yes=14 Tom) | ves=13 (5%) | Ves em) efecve crannet or servicing | yoso2 (10%) | No=s (zor) | Nu=04 (20) peo No=O? oa (20%) | Noidese03__{15%)_| Noidea=08 5%) ise castor Gala ee asm) | Yost 5% Scattered across departments 10% No=01 (5%) No=02 (10%) ae databases? aie (3H) | Newdear0T (38%) 1 No ideo=04 (20%) | aout 96(nthe basis of the results presented above it is found that, on an average 41 6% ofthe managers perceive CRM to be a reality and 35% of the managers percelve it as @ myth. It was found that, on an average, 23.4% of the managers do not have any idea about CRM. This finding relates to the very first objective of the study. itis also found that, on an average, 40% of the managers of these banks de have any specific policies for efficient management of demand ané supply. On the basis of the result presented above it is also found that, on an average, 35% of the managers do have the tools to understand and view the complete customer relationship with the banks. Their services are account oriented rather than customer oriented. 522 Management of Demand and Supply: Survey Results of Customers’ Responses. The questionnaire were supplied to 100 customers from each bank. Customer questionnaire responses and analysis Table 3.2 Survey Results of Customers’ Responses [ Manageinant of cemand& sappy SEI PRE oac n=100 2100 N=100 [Dayar Barkin aorierean | Yeon YEH Yess coepaaave vinx beyond jst asic | yg=t9% Hosilke fons automaien? | no idet0% | Noweess0% | Noidea37% | Goes your Banicnas CBS Branches Yast Yaar having centralized processing? No=09% No=12% | Nodea40% No wea=s0% No idea=t5% T% Yossi Yesaae Dues your bark prove Zenour | Yes customer service, provide service = 09% Nos12% aire anyome 28 by 7 non-stop | NO vent Bort? \ services? No idea=a0% No idea>50% No idoa=45% Da you ga convenient lowcost | Yess33% Yes=s0% re a6 | sersce? ees No lea=38% 97E aanerinsaT Te atone) NOSE No=a5% | No idea=20% on the basis of the result presented above it is derived that, on an average, 39% of the customer of these selected public sector banks are of the opinion that their bank operating hours are convenient to its customers and 33% of the customers are of the opinion that they get convenient, low-cost service. Also 41.3% of the customers are of the opinion that their bank in order to remain competitive must think beyond just basic automation 33. Managing customer complaints Table 3.3 Survey Results of Managers’ Responses Managing Customer PNB ‘OBC Complaints N=20 n=20 Sar eS cadence [veiz om) [Vest (60%) | Yes"08 Signs indcating a8 10 WHCN | qoegg (250%) | No=05 (25%) | NOES chat 3 oeong 7 [Neidearos (8% | Nokearoe GH) | NO wdea=08 Thea your Bark promises 10 (e5%) _) Ves=10 HH | Vero aR) 9 something by @ cetan ~ (25%) | No=08 (25%) | No=05 (25%) Hes ECoesiae (2o%} | Noidea05 (25%) | Nowdea=08 (30%) Einployess of your Bank Gve Tow) ED 7 | customers prompt service ase trom) | No=08 (20%) Noideaco7 (35% (45%) | No idea=05_(25%) au Emi perore The | Vests 6S) | Yesst4 (70%) (55%) service rahttne fisitime — | nioegg (30%) | No=01 om) (20%) No ides=08 (25%) | no igeac05 (25%) es | Employees of your Bank have (0%) [Yes=15 (75%) (5%) | ire knowedge 10 answer (30%) | yoeos (18%) (15%) custome questions. (10%) | NO oao2 (1088) He fre bank employees om fyesstt 5%) | (50%) tustomer friendly and add (20%) | No=04 (20%) 8 (25%) intengible value 10 Ihe No=05 senices rendered? Noideas04 (20%) | Noidea=05 (25%) Noideas0S (25%) | Complaints are usually not solicited by any means Customers, when they have a problem, usually complain to the branch manager & the branch manager is supposed to resaive the problem then & there. In case the problem is taking oNsome time in getting resolved, the branch manager is supposed to et the customer know the status of the complaint. However, there is no monitoring of whether, the manager actually does so. It is also found that on an average, 55% of the bank employees aie customer friendly and added intangible value to the services rendered. On the basis of the result presented above it may be said that, on an average, 50% of the employees of these public sector banks give customers prompt service. In order to manage customer complaints 45% of the menagers in their banks have guidance signs indicating as to which counters were offering which services. The managers of these banks are of the opinion that, on an average, 50% of the complaints are rweclved Py 0 cortain time as promised by the employees. 3.3.1. Managing customer complaints Table 3.4 Survey Results of Customers’ Responses Wanaging Customer SBI PRB Complaints, N=100 n=100 eos yruir bark Keep up with | Yes=20% Yes=30% ensured promised service? No=35% No idea=45% ‘Daas your Bank make etfans for | Yes=47% Yes=30% acquiring new customers? No=33% No=43% No=32% No idea=20% No idea24% No iea=35% On the basis of the result presented above it may be concluded that, on an average, 27% of the customers are of the opinion that their bank keep up with ensured promised service and only 36.6% of the customers ere of the opinion that their bank make efforts for acquiring new customers 993,4Customer Retention Table 3.5 Survey Results of Managers’ Responses Customer Retention a | Ce N=z0 n=20 n=20 aap bapronde ine | VOTE COR) [YeRTS GSH) [verso GO) dlonts expected customized, | jo=94 (20%) (20%) | No=05 (25%) proactive solutions (advice | Nig igea-04 (20%) fe) No idea=05 Gen) nd information) at 3 Competitive price, allowing them to obtain high performance on their assets? Do yas er ; 4 (70%) (75%) | Yes=t2 (60%) we pairen, ones ene (10%) (6%) | No=04 (20%) telajonsnip managers, jo idea=04 (20%) | noideacoa (20%) | No Wea=04 (20%) Sesstanis and advisory desk staf? is soeofic customer Yessi0 (60%) | es=08 em | vesr0a 40%) se scechieammngagven wo [Nom (0%) | ngsg3 Oe | aeete 7 the bank employees? Noidea-08 (40%) — | No easo7 pees reed out aa panes arayee of [Ves=t2 GO") | Yesr11 (Gem) | es=10 go%y customers (exsting and No- (20%) | No=04 (20%) | N (20%) ve) undertaken? prospective) undertaker Neigear04 (20%) | Noidea=05 (26%) |Noidea=06 (30%) | According to the bank management, “the employees have no time to ask customers as to why they are closing their accounts” in case of account closers. on the basis of the result presented above it may be noticed thal, on an average, 58.3% of the managers of these banks provide their cients/customers expected customized services. The periodic analysis of customers (existing and prospective) is undertaken which is only 55%. The specific customer relationship taining is given to only 45% of the bank employees 3.4.1 Customer Retention Table 3.6 Survey Results of Customers’ Responses [Customer Retention PNB ‘OBC n=100 n=100 ‘Doss your Bank do @ good job Yes=28% Yes=25% transiating its customer-centric No=42% No=45% selon fol. As fronts No idea=30% No idea=20% operation? 100So ‘avs your Bank currently Yeas = provide an excellent customer waesg ee Service? No=28% No=22% Noidea=20% | NoKlea=90% ies your Bank Tolow the | Vas=30% ve saving “f youare dissatisied | yo. neal wilh our service, please tell us. Ase No=32% tyoaateantata-pesre tet | Nolien2e% | No idea=38% otters? on the basis of the results presented above it is found that, on an average, 46.6% of the customers are of the opinion that their bank currently provides an excellent customer service whereas, 30.3% of the customers are of the opinion that their banks did a good job translating its customer-centric vision into its front fine operation. It is also found that, on an average, 33% of the customers further opined that their bank follow the saying “If you are dissatisficd with our service, please tell us. If you are satisfied, please tell others” 3.5. CRM STRATEGY Table 3.7 Action Plans of CRM Best Practices in the Public Sector Bank —_yT = OEE ae Strategy San Snel + resting - angen | > Career oh Nenagenent Brana tr CRM Se chemae tone cannes + ngronng he + Speesoa us + Speeding oe (ustty a anne tensasore tnsectons i Sextnvotsly + Siniecest + Senne ca eorter = Seunccalconer case Crepe ie = aici te = —Reastara + Rene Monagerent owporta ote Sass ste ‘ainese sae eons atts Soopines, es diclnes, les frane sets Ss byecve Sho oectves 0 = Ritmatic inograte be Ameorate to ont covstor fontatce sre Sen and boc + gest a bactcoce feo tone ih + Aewoin + Reve ininnoeaton trenton ‘rowan and cra oopatens evaluators spoteatons + Ung WAP a ro 2 ants on | + angie ae sere compoleree pembboce pee + Spnosting onthe ae ErpiSim pms = Shomestng en IT evesiment fhelong tem pros a frvostrent iene = Reroacting ape homer Coes Cierra an tne SSgrertaton on fhe mote inob sences| __eteeeteand sunvens = _inggrina me iol> eaten ae ét customer deta ‘across functions and eee | eset ee sages. | asm |. Sz mee). Ee ee ties a soe a mae ie =< a; on pan os nn a . Bae Soe, | seatie Eietw | Sec | Setar ; week meee | Stoo i moe |. SRE an en ee ee aa cet | Sieaen : eas| ae | BS Ean =a 3.5.1, Six Banking Imperatives for a Successful CRM Strategy in public sector banks, The public sector bank seeking to adopt a customer relationship model are considering six key banking requirements such as- i. Creating a Customer-Focused Organization and Infrastructure- Bank management must align sales and service behaviors around customer relationships rather than around groups or products. To help dissolve departmental silos, executive management needs to keep a view toward overall customer profitability rather than in discrete segments of the banking, On the analytical side, it is critical to have a single, enterprise-wide view of the customer, spanning all touch points and systems. ii. Customer data are assembled from every contact point -call centers, mail, person-to-person, fax, the web and beyond to construct an accurate, consistent view of customers across all available channels. That means data and key metrics from diverse departments are aligned, shared and integrated ina commen arena. Information about customers, which now exists in various databases across the bank, are combined and made compatible before meaningful analysis can take place.ji, The studied three banks are trying to gain an accurate picture of their customer categories such as- to have effective target marketing, the banks have to have a target. To anticipate customer needs, improve customer retention and identify opportunities to cross-sell and up-sell, the banks have to understand the unique characteristics of each market segment in an increasingly fragmented marketplace. Market segmentation in the banking industry has been a “soft” art based on intuition and experience, looking at characteristics generally believed to predict buying patterns. To pinpoint the best opportunities for marketing, sales and service, banking institutions are adopting a much more rigorous analytical framework. iv. The banks are trying to accurately assess the Lifetime Value of their customers such as- customers just starting out from school might be marginally profitable right now but very profitable later when they will be established in their careers. Without understanding lifetime value, banks face the potential to take short-sighted actions that unwittingly drive away customers along with their potential value. ‘A successful CRM approach enables customer service organizations to create the knowledge they need to implement the right retention strategies and minimize defection of valuable customers. v. The banks are trying to maximize rate of return on marketing campaigns- to increase rate of return on marketing campaigns, market strategies must be based on an accurate and comprehensive understanding of the bank's 103customers across all functional areas and contact channels. The CRM model of campaign management calls for practices such as- «Incorporating customer information from all touch points to generate a single customer view. + Creating "smart" campaigns that are tightly targeted to the highest-value customers or the customers most likely to respond, for the most relevant opportunity, through the desired channel, at the most appropriate time. * Coordinating systems and processes so market programs can be generated more quickly, and so feedback from previous campaigns can be used to fine-tune future activities. Vi. Each of these key banking requirements is an integral part of a CRM value chain. Once a bank understand its customer base, it can segment those customers into groups to which it targets tailored service and marketing activities. Using analytics, the bank can quantify shifts in behavior, predict long-term value, and identify prime cross-sell and up-sell opportunities. This type of information forms a basis for creating highly targeted market campaigns and offers. Information from market campaigns is then cycled back into the CRM system to fine-tune its effectiveness. ‘The implications of these six imperatives on banking services is that legacy banking systems reflect a traditivnal process-and product-oriented view of the banking, The banks architecture uses @ host of independent systems on different platforms, which share information in a limited way. As mergers and acquisitions reshape information networks, i's common to see multiple, incompatible 104platforms even within a single functional area. The key banking requirements of a CRM strategy necessitate a different infrastructure, one that supports a unified, relationship-based view of the customer. Therefore the banks are developing systems just need to be able to share their information through a data warehousing and analytic structure that brings the parts into a unified whole. Table 3.8 Survey Results of Managers’ Responses RH Stateay Sal PRE OBC N=20 n=20 ns20 What CRM strategies you opt for iL Acquiring ard. continuously updating knowledge about x x x customer neads, motivation ‘and behaviour over the Iatime of the relationship. 4 Applying customer knowledge 10 continuously improve performance x x x trough a process of teaming from successes and fares ji The implementation of appropriate systems to sibpent euclomer lovouielge ¥ x soqisiton, sharing and the measurement of CRM effectiveness, je. Customer retentions. and x x x telaionshio development ¥. Web-based CRM (uses the inlernet {0 integrate v v 2 and simplify customer ‘elated business processes, reducing cost ot customer-facing operations wile eanancing the customer experience) vi eCRM {asa means of seling, serving or ft communicating with customer through web) a Using technology t0 replace human contact in v v # many CRM application areas, Consumer eaucation|__+ | 105ae Proving barks products End senfoes (0 larger v # V Enstomer base oe you tek Thal B szavoral relationship oF Seer wan ts customers Is determined by how ” x Gmployees make customers feel YesNo These banks do not follow the strategy of acquiring and continuously updating knowledge about customer needs, motivation and behaviour over the lifetime of the relationship. The recent development which is one of the significant CRM developments that has taken place over the last decade leading to globalization is that these public sector banks have started applying customer knowledge to continuously improve performance through a process of learning from successes and failures. The implementation of appropriate systems to support customer knowledge acquisition, sharing and the measurement of CRM effectiveness is not at all practiced as a strategy by these banks. Similarly, customer retentions and relationship development is not at all followed by these banks. Web-based CRM (uses the intemet to integrate and simplify customer-related business processes, reducing cost of customer-facing operations while enhancing the customer experience) and eCRM (as a means of selling, serving or communicating with customer through web) is being followed by SBI and PNB but OBC still lacked behind in following this strategy. Using technology to replace human contact in many CRM application areas is being followed by all the three public sector banks. Providing banks products and services to a larger customer base is being practiced by these banks. SBI and PNB managers think that their 106organizational relationship with its customers is determined by how employees make customer feel, whereas, majority of OBC managers do not feel so. 3.5.2 CRM strategy: Table 3.9 Survey Results of Customers’ Responses ar a le oe RES tee — fag —| Tos RE oe roan Stee a On the basis of the results presented above it may be said that, on an average, 40.6% ‘of the customers are of the opinion that their bank has techno-sawy customer’ orientation. It is found that, on an average, 37.6% of the customers wore of the opinion that their bank provided differential service to different customer. It is found that, on an average, 50.3% of the customers are of the opinion that their bank think about total customer experience (TCE). It is also found that, on an average, 37 3% of the customers are of the opinion that their bank is product centric, service centric and customer-centric, 36, CRM programs Customer identification, customer segmentation, customer prediction, data warehousing, front office applications, customer care applications, structuring the 107organization for CRM were some of the initiatives being undertaken by these banks for building strong customer relationship management. Data warehousing, effective complaint handling, front office applications and structuring Wie organization for CRM with the use of IT technologies is being employed by these selected public sector banks. State Bank of India has come up with customer education initiative CRM programs. 3,7. CRM IMPLEMENTATION The three banks have implemented the following CRM practices such as- voice response systems, ATMs, call centers, fast and efficient service through all the bank’s touch points, new levels of services for complicated transactions, internal business processes and have exploited human and organizational resources, CRM data warehousing, data mining and other IT technologies. The success of three banks lies in the secret of successfully delivering customer oriented product or service to every customer. 3.7.1 CRM implementation Table 3.10 Survey Results of Customers’ Responses CRM Implementation om PN ‘OBC e100 N=t00 n=100 ‘Does your bank teats you wih | Yes=30% Yes=35H Yes=20% Signty, Empathy. Responsive | sige = No=38% lo needs, fnenciness, Hossa Neste iatieati. Wocomed, andiniormed | Noidea=38% | Noidea=24% Te the bank employees Yos=ai% ‘xotessional ang trendy? acta No idea=40% You Teal safer your Yer7o% transactions with your Bank 108(on the basis of the results presented above it may be said that, on an average, 27.6% of the customers are of the opinion that their bank treats them with dig empathy, responsive to needs, friendliness, welcoming, and informed. Also, on an average, 43.6% of the customers opined that their bank employees are professional and friendly. It is also found that, on an average, 71% of the customers are of the view that they felt safe in their transactions with the bank. 3.8. Relationship marketing Table 3.11 Survey Results of Managers’ Responses ‘alationship Marketing | SBI PRE ‘OBE =20 n=20 n=20 Te mages in barks | Yeos72__ (60%) | Yos=17 Tam | ves OH) believe Mat thelr processes | Nosog (20%) | No=05 (25%) | No=0s (25% re customer centic? 7 ope cescerarrmnte Noidea-o4 (20%) | Noidea=04 (20%) | Noideas0S __(25%) Do hay ages aan on [ves=t SH) (5%) | Yos=12 (60%) the bas of an uPderstarang | song (10%) em) | NE er centri A ) | No=os (25%) of customer centricty? Noidea=05 (25%) (ross) [NeWea=09 (15%) Fave Wey empowered thar | Yes=14 (70%) (@5%) | Yesr1s (65%) employees to deiver superor | pong (6%) (10%) | No=os (20%) serve’ Neigeasos (25m) _|Noidearot (6%) | Noidearo1 (6%) To they have a customer [Ye (0%) | Yesst2 (ov) | Yeseit my tee Latent, No=00 (00%) | no: (30%) | No=08 (40%) well do they manage their a a wed to "hey eae Noideaco4 (20%) | Noioea=02 (10%) | noideseot (Ste On the basis of the results presented above it is found that, on an average, 55% of the bank managers believe that their processes are customer centric. On an average, 60% of the managers select the technology on the basis of understanding of customer centricity. It is also found that, on an average, 73.3% of the managers of these banks had empowered their employees to deliver superior service and 65% of the managers are able to manage their customer relationships by having the customer knowledge strategy which helped them to 109‘organize customer touch points, helped bank to respond to a customer need's instantaneously and helped in one-to-one marketing. 3.8.1 Relationship marketing Table 3.12 Survey Results of Customers’ Responses tne relevance of the information provided. the relationship, the quality ‘and the timing of the advice, | No idea=40% the quality of the service, and Relationship Marketing | SBI PNB ‘OBC e100 N=100 N=100 Does your Bank look after | Yes=41% ‘Yes=40% Yes=43% the quality and frequency of | noat9% No=10% No=20% Noideas0% | Noidea=37% Does your bank have relationship managers. relationship assistants, etc? ‘customer care executives ‘Yesnd0% Yes=ao No=20% Moreuye Noidearaor | Noidears8% On the basis of the results presented above it may be average, only 41.3% of the customers are of the opir derived that, on an in that their bank looked after the quality and frequency of the relationship, the quality and the timing of the advice, the quality of the service, and the relevance of the information provided. It is also found that, on an average, 39% of the customers are of the opinion that their banks have relationship managers, relationship assistants, customer care executives etc. 3.9. Managing customer experience Table 3.13, Survey Results of Managers’ Responses Managing Customer | SBT PNB ‘OBC Experience 0 n=20 N=20 Bees your Bank follow the | Yes=10 (60%) | Yes=10_——((50%) | Yes=09 (45%) ‘sayng “it you are dissatisfied | No-03 (15%) | Noxo1 (o%) | Nore (40%) ‘wth cur service, please tell us. If you are satisfied, please tell others No idea=07 (35%) No idea=09 (45%) No idea=03 (15%) ‘ve the bank employees Prolessional and friendly? yessia (70%) [Nozos (25%) Yass14 (70%) i) cara) (25%) 110expect? (5%) Ne Wea=05 25%) [No idea=05 (25%) ome the ar aac (70%) | Yes=10 ae Yes= (65%) 15%) | No=06 (30%) | No=07 Merogies 10 offer customers the | NOS. (30%) | No=07 (35%) Sodues and servces tmey | NoWea=03 (18%) | NoWeard4 (20%) | no easo2 (10%) ‘he oganzabon @ Teaming | Yos16 (80%) ]¥ Pee a|en Gh fee a ee mor requirements ahead of ) amas Noldeao4 (20%) | Noidea=09 (00%) | nigeoa (1095) No idea=05 (25%) On the basis of the results presented above it may be concluded that, on an average, 63.3% of the bank employees are professional and friendly and on an average, 48.3% of the bank managers follow the saying “if you are dissatisfied with our service, please tell us. If you are satisfied, please tell others”. It is also found that, on an average, 71.6% of the bank managers expressed the view that their organization is a leaming one and is responsive to customer requirements ahead of its competitors which is very important and is also a new development for managing customer experiences. This factor appears to have influenced and was affecting changes in the customer relationship management in the banks. This finding relates to the second objective of the study. 3.9.1 Managing customer experience Table 3.14 Survey Results of Customers’ Responses Wanaging Customer Experience SBI PN ¢ n=100 n=100 Dose your Bark goes Tor continuous | Ves=do% | Yos=32 mentoring of clonts postions in order 10 | noz7o% No=42% provide excelient customized, personalized Rares ‘advisory service which loyalty? ‘ean create customer | Nv idea=94% ‘When your Bank promises to do something bya cerain time, it does s0? utOn the basis of the results presented above it may be derived that, on an average, only 40.6% of the customers are of the opinion that their bank goes for continuous monitoring of clients positions in order to provide excellent customized, personalized advisory service which can create customer loyalty. It is also found that, on an average, 42.6% of the customers are of the opinion that when their bank promises to do something by a certain time, it does so. 3.10. Total customer focus Table 3.15 Survey Results of Managers’ Responses Total customer focus Sal PRE oBe n=20 =20 n=20 apr wat eee [Vert SR) | Yeusto GOR [Yes=09 (SR) vnige customer “arhng | yosog (158) [Novos (5) | No=oe (20%) = No idea=06 (30%) No idea=07 (35%) No idea=07 (35%) Kee you Woking for more] Yes=16 (60%) | Yes=13 (65%) | Yes= (70%) MRearhgtul ano Tastng ways |NO=02 (10%) | noeo7 eM eee (108) fo educate employees to | Noidea=02 (10%) Noidea=04 (20%) make for more informed Noidea=00 (00%) customer interactions? Does your bank sucoseds in | Yes=13 (65%) | Yesw12 (60%) — | Yes=13 eam creating this kind of emotion ke in the form of good tone: yi ewil from the customer? No=04 (20%) | Ne Noidea=03 (15%) _ | No ide 5 (25%) | No=O2 (10%) 1-03 (15%) | Noidea-05 (25%) ‘The three studied banks are focusing their attention and resources to be closer to customers sufficiently responsive to their requirements and performance in meeting these needs. On the basis of the results presented above it is found that, on an average, 50% of the bank managers wanted to create a unique customer banking experience for customer delight. It is also found that, on an average, 71.6% of the managers are looking for more meaningful and lasting ways to educate employees to make for more informed customer interactions and also, on an average, 63.3% of the managers are of the opinion that their banksucceeds in creating this kind of emotion like in the form of good tone or e-mail from the customer. 3.10.1 Total Customer Focus Table 3.16 Survey Results of Customers’ Responses ‘Total customer focus SBT right for the customer"? PNB n=100, n=100 Do you got Trendy wewice by al the | Yessa7% ‘Yes=40% branch staff and a consultative Eeade No=33% No=30% No=45% No jdea=20% | No idea=20% | No idea=25% ‘Does your bank staled intent is to bul Yes=a5% st te ie. “de ‘a customer-centric culture i.e. “doing it eh No idea-60% No idea 255% On the basis of the results presented above it is found that, on an average, only 39% of the customers are of the opinion that their bank gets friendly service by all the branch staff and a consultative approach. It is also found that, on an average, 36% of the customers are of the opinion that their bank stated intent is to build a customer-centric culture i.e. “doing it right for the customer’, 3.11, CUSTOMER SATISFACTION Table 3.17 Survey Results of Managers’ Responses Customer Satisfaction ‘SBI PRE ont n=20 n=20 0 De Gperaing procedures and | Yes=15 (75%) | Yes14 (70%) | Yes=12___ (60%) systems pave the way for! yo-o9 (20%) | No=03_—_—— (15%) || No=O9_ (15%) msborer saseetoUy: Nowea=03 (15%) | No idea=03 (15%) _| Noidea=05 (25%) Focusing ther ateaton and] Yes=12 (60%) | Yese71 (65%) | Yes=10 (50%) Tesourcas to be closer to customers, sufficiently responsive to their requirements, ‘and performance in meeting their noeds? No=03 (18%) No idea=05 (25%) No=04 (20%) Noidea=05 (25%) No=05 (25%) No idea=0s (25%) fe your Bains physeal [Vests (55%) (a | Mertz OR) cities are visually | yo Su Nowoa (20%) (15%) (20%) | eaing? Noides=03 (15%) | Noideae04__(20%) (20%)on the basis of the results presented above it is found that, on an average, 68.3% of the managers are of the opinion that their operating procedures and systems paved the way for customer satisfaction. It is also found that, on an average, 55% of the managers of these banks are focusing their attention and resources to be closer to customers, sufficiently responsive to their requirements and performance in meeting their needs. It is also found that, on an average, 83.3% of the managers are of the opinion that their bank's physical facilities are visually appealing which is also one of the important aspects for customer satisfaction in modern day banking. 3a. Customer satisfaction Table 3.18 ‘Survey Results of Customers’ Responses Customer Satitacton SB PE OBC N=100 n=100 N=t00 ‘hen you have a probiem, your Bank | Yes=42% Yes=aa% Yes=a0% shows’ sincore merest in soWvNg i? | Noerony ina aati Noidear46% | NoideasS4% | Noldea=60% "Your Bank parortstho service ight | YeS=60% Yarniate Yes=a6% the fist imo 2 - i No=12% No=15% No=22% Noidea=26% | Noldea=10% | Noidea=32% ‘Your Bank insisis on aror ee Yesot% Yaa=ai% Yes ee No=09% No=08% No=12% Noigeanao% | Noidea=50% | Noidea=45% Employees yourBancieiyou | Yes= 45% Yoana Vesa exact when services willbe = =i os No=05% No=18% No=16% No isea=50% | Noidesrd0% | No idea=40% Erployeas of your Bank give you | Ves=so%e YessI% Yeah neeEREeS. No=20% No=15% NO=12% noisea=40% | Noideseso% | Noldea=56% Eapioyess of your Bankravetne | erate Yos=d5% Yas=d0% tocwiedge to answer yout questions. | na4a% NonlO aie Nowes=12% | Noidear15% | Nowea=11% Eriployees oTyour Bank ae es=50% Yas=i0% Yassa6% consistently courteous wih you aaah mee 14No idea=35% No idea=30% ‘Your Bank has employees who give = = you personal attention. ios vente No=09% No=12% No idaa=0% No idea=45% Empiyees of your Bank understand] Yes=00% Yes=30% Yes=36% your specific needs. No=34% No= = oy Nosaen No iaea=20% No idea=24% No idea=38% On the basis of the results presented above it may be said that, on an average, only 36% of the customers are of the opinion that their bank shows a sincere interest in solving their problems. It is also found that, on an average, 50.3% of the customers are of the opinion that their bank performs the service right the frst time and on an average, 36% of the customers expressed that their bank employees give them prompt service whereas 33% of the customers are of the opinion that their bank employees were consistently courteous with them. It is also found that, on an average, 45% of the customers expressed that their bank employees give them personal attention and 33% of the customers expressed that the employees of their bank understand their specific needs. Thus, in a nut shell, the selected public seclur banks seems to have no specific policies to smoothen the random fluctuations in demand so as to shift demand from peak periods and increase demand in slack periods. Customer retention is hardly practiced in these banks. Customer complaints are not solicited by proper means. CRM programs and CRM action plans are being employed by these banks but not aggressively. Total customer care experience is in the infancy stage 1S