About CRM

Customer relationship management (CRM) is a business strategy that aims to

understand, anticipate and manage the needs of an organization’s and potential

customers. It is a journey of strategic, process, organization and technical change

whereby a company seeks to better manage its own enterprise around customer

behaviors. It entails acquiring and deploying knowledge about one’s customers and

using this information across the various touch points to balance revenue profits with

maximum customer satisfaction.

CRM is a management approach that seeks to create, develop and enhance

relationships with carefully targeted customers to maximize customer value, corporate

profitability and in turn, shareholder value. Customers are getting actively involved,

either directly or indirectly with production processes. It won’t be long before they

become valuable CRM stakeholders. CRM is a comprehensive approach which

provides seamless integration of every area of business that touches the customer –

namely marketing; sales, customer service and field support-through the integration of

people, process and technology, taking advantage of the revolutionary impact of the

Internet more effectively. An enhanced relationship with one’s customers can

ultimately lead to greater customer loyalty and retention and, also, profitability. In

addition, the repaid growth of the internet and its associated technologies has greatly

increased the opportunities for marketing and has transformed the way relationship

between companies and their customers are managed.

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Introduction & Evolution of CRM
Relationship management is a process of building long term mutually beneficial

relationship with the customers. The Financial Institutions in the developed countries

are using this marketing tool very effectively by taking full advantage of Information

and Communication Technologies.

The Indian Banking Industry which was operating in a Bureaucratic style prior to

1991 had to undergo large scale transformation with the opening up of the economy.

The Sector has been facing unprecedented challenges with the wave of liberalization,

privatization and globalization of Indian Economy. Banks in India are under intense

pressure in today’s volatile market place. Steep competition, globalization, growing

customer demand and exposure to higher credit risks are forcing the banks to find new

ways of improving profitability. On the other hand, cost-cutting measures have forced

banks to manage operations with few Customer Relationship Managers and Product

Specialists. Industry consolidation also poses fresh challenges to this sector. Even

today, most of the banks in India rely on the legacy of Customer Information System.

In such a scenario, it is difficult to have a complete customer view across divisions.

They face unprecedented challenges to sustain their growth path for survival. The

challenges include customer retention, reducing transaction costs, risk management

and Regulation Compliance.

This result was huge proliferation in customer’s choice. The strategic tool that was

chosen for aiding this process was Information technology and most of the banks went

through adoption of various stages and forms of IT over the years and the process is

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still continuing. The rapid growth of Information Technology and its potential to serve

the customer in a new way awakened the marketers and enabled them to transform

these challenges into opportunities. Under these circumstances, customer satisfaction

became an important aspect of business. The search for new strategies began to meet

not only the high expectations of customers but the need to retain them. The

competitive world witnessed many banks participating in the race to optimize their

profits. It increased the pressure to perform leading to adoption of advanced

technology and better skilled work force.

Therefore, business model changed from bank-centric approach to customer-centric

approach. The customer became not only the essential but the most important part of

the business. The Service Sector has emerged as a key sector in Indian Economy. The

contribution from this sector to our GDP is approximately 56.5 % as per the current

year’s Budget Report (2012-13). Including construction, the contribution increases to

64.8 %. The continuous growth of GDP at 8% and above has become possible due to

the good performance of this sector. In the post-reforms era, there has been a sea

change in the financial sector. In such a scenario, the services have grown rapidly and

the customer has been more often a purchaser of services than a product.

The Financial Services is the backbone of service sector. This is important not only

for the banking sector but of the Indian Economy as a whole. This is so because

banking is catalyst and life of modern trade and commerce. It is an integral part of all

the businesses and social activities. The rapid transformation of services in the

banking systems has led to evolution of a highly competitive and complex market

where there is a continuous Refinement of services. Hence, the increased role of

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banking in India’s Economic development on one hand and the changes in the

business climate on the other has put increased pressure on them. These changes are

compelling the banks to reorganize themselves in order to cope with the present

conditions.

Now, the Financial Institutions are trying to provide all the services at the customer’s

doorstep. The customer has become the focal point either to develop or maintain

stability in business. Every engagement with the customer is an opportunity to either

develop or destroy a customer’s faith in the Bank. The expectations of the customers

have also increased many folds. Intense competition among the banks has redefined

the concept of the entire banking system. The banks are looking for new ways not

only to attract but also to retain customers and gain competitive advantage over their

competitors. The banks like other business organizations are deploying innovative

sales techniques and advanced marketing tools to gain supremacy.

In the present Indian Banking Scenario, two prominent phenomena are the focal point

to emerging practices and policies. These are ‘Technology’ and ‘Relationship

Marketing’. The power of technology has revolutionized banking services and

practices. ‘Relationship Marketing’ is seen as the only differentiating factor given the

almost commoditization of banking services. On observation of the recent

restructuring, rebranding and reengineering efforts of many banks, we find that the

key motive towards these is to utilize customer centricity as a strategy. Further,

catalyzing the importance of Technology and Relationship marketing is the Core

Banking Solution (CBS). All the banks have overcome the teething troubles of CBS

and it has become the axis of banks’ growth and performance. Going further, most of

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the Banks have invested in technology enabled Customer Relationship Management

Software to utilize CBS generated customer information for enhancing business

opportunities, access to customers and support. Thus, CRM is a logical progression of

CBS for Indian banks. Although at a nascent stage, it is developing swiftly. Customer

Relationship Management is the integration of these two cornerstones of Indian

banking viz. technology and relationship marketing. It has a potential to bring about

dynamic changes in marketing practices of banks in near future, with the objective of

business growth through managing customers as assets, systematically collecting,

analyzing and disseminating customer information and use of this customer

information for acquiring, retaining and better servicing customers. An understanding

of the current status of the CRM initiative in majority of banks suggests that only a

minuscule of the potential of CRM has been realized. The key impediment is the lack

of understanding and acceptance of CRM as an organization wide strategy and need

for reorientation of organization structure to adopt this. The paper investigates these

issues and suggests a framework for reaping the benefits of this investment in CRM

by various banks.

Evaluation of CRM
One of the important marketing tools in the developed countries is Relationship

Marketing. The CRM is a comprehensive approach for creating, maintaining and

expanding relationship with the customers. It has emerged as one of the most widely

prescribed solutions for diminishing market share and sluggish growth of many

industries in general and banking and financial sector in particular. CRM is a simple

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philosophy, which places the customer at the heart of the business processes, activities

and cultures for improving customer satisfaction and maximizing profits. In one of the

encompassing definitions, CRM is described as “the establishment, development,

maintenance, and optimization of long term, mutually-valuable relationship between

the customers and the organizations. It is a comprehensive approach for creating,

maintaining and expanding relationship with customers.

The concept of CRM is very important to the business sector. The essence of the

business had been described by Mr. Peter Drucker, the Management Guru as, “the

purpose of the business is to attract and retain a good customer”. Good Customer

Service is the best brand ambassador for any bank. The entire business process

consists of highly integrated efforts to discover, create, arouse and satisfy customer’s

needs. The modern business has realized it and is making all out efforts to become

‘customer-centric’ across the globe. Hence, CRM is not a once-for-all affair but a

continuous process. It is the way of carrying out business covering all aspects of the

modern business. It is an integral approach of dealing with customers by deploying the

advanced information technology.

CRM - Conceptual framework

CRM is the strategy for building, managing and strengthening loyal and long-lasting

customer relationships. CRM is a customer centric approach based on customer

insight. Its ultimate objective is towards ‘Personalized’ handling of customers as

distinct entities through the identification and understanding of their differentiated

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needs, preferences and behaviours. A few more definitions which clarify CRM

concept are –

According to Philip Kotler, CRM is the process of carefully managing detailed

information about individual customers and all customer ‘touch points’ to maximize

customer loyalty. It can also be described as a business strategy comprised of process,

organizational and technical change to better manage business around customer

behaviours.

Components of CRM
It is bundle of sales, Marketing and Customer support applications. Integration of the

applications through the web makes the CRM applications really attractive.

Transactions are tracked through CRM and Data mining is used for the analysis of

data.

The Old Concept

THE BACK OFFICE (General Manager, Manager

Finance, HR)

THE FRONT OFFICE (Cashier, Clerk)

THE CUSTOMER

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The Current Concept

THE BACK
OFFICE

THE FRONT THE THE FRONT

OFFICE CUSTOMER OFFICE

THE BACK
OFFICE

Emergence of CRM
The primary reason for the emergence of CRM is the change in the marketing

environment. Today marketing model is changing from the product-centered approach

to customer-centered approach. Organization needs to create customized offers for

customers and ensure relationship by providing better customer service and

management of customer expectations. So, marketing should be devoted at enhancing

customer relationships. But one should take note of the increasing use of the internet

which is changing what is possible and what is expected in terms of CRM as

technological advances in global networks, convergence and improved interactivity

are to explain the growth of CRM. Now companies should go beyond CRM towards

whole relationship management by managing superior value chain delivers a high

level of product quality, and service quality.

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From relationship marketing to customer relationship marketing

The concept of relationship marketing was first founded by Leonard Berry in 1983.

He considered it to consist of attracting, maintaining and enhancing customer

relationships within organizations. In the years that followed, companies were

engaging more and more in a meaningful dialogue with individual customers. In doing

so, new organizational forms as well as technologies were used, eventually resulting

in what we know as customer relationship management.

The main difference between RM and CRM is that the first does not acknowledge the

use of technology, where the latter uses Information Technology (IT) in implementing

RM strategies.

CRM Objectives in Banking Sector

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
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different ways information about customers comes into a business, where and how

this data is stored and how it is currently used. One company, for instance, may

interact with customers in a myriad of different ways including mail campaigns, Web

sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and

advertising efforts. Solid CRM systems link up each of these points. This collected

data flows between operational systems (like sales and inventory systems) and

analytical systems that can help sort through these records for patterns. Company

analysts can then comb through the data to obtain a holistic view of each customer and

pinpoint areas where better services are needed.

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.

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Need for CRM
The important factors that establish the

need for CRM in the Banking Industry Intense

competition
are detailed below:
Well
Informed
Customers
 Intense competition
NEED
There is intense competition among FOR
CRM
the Private Sector banks, Public Decline in
Brand
Sector Banks and Foreign Banks and Loyalty

Improved
they are all taking steps to attract and Customer
Retention
retain the customers. New

technologies, research facilities, globalization of services, the flood of new

products and the concept of all the facilities under one roof to provide better

customer service leading to customer delight.

 Well Informed Customers

The Customers in Banking Industry today are well informed. With the introduction

of new technology, the world has become like a small village. Thus, if a Bank

wants to have more customers, it should develop a good relationship with its

present customers and try to maintain the same in the future also.

 Decline in Brand Loyalty

In the present scenario, brand loyalty is on a decline. The customers are switching

over frequently to avail the better facilities from other banks. Newer and superior

products and services are being introduced continuously in the market. Thus, the

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 banks have to upgrade their products, improve customer service and create bonds

of trust through proper care of customer needs and regular communications. With

the help of CRM, strong customer loyalty and a good image for the organization

can be developed.

 Improved Customer Retention

In the intensely competitive baking industry, retention of existing customers is

vital, which can be achieved through the process of CRM.

Customer Focus in Banking Services

As the intense competition becomes a way of doing business, it is the customer who

calls the shot in deciding the nature of products and services offered in the market.

The customers are becoming demanding, dominant and selective. In fact the

perceptions and the expectations of the customers have undergone a sea change, with

the availability of banking services to the customers at their door steps through the

help of technology.

Marketing of customer services aims at two important goals: prosperity to the bank

and satisfied customers. Banks offer tangible services like loan schemes, interest rates

and kinds of account and the intangible services like behavior and efficiency of staff,

speed of transactions and the ambience. The banks may need to include customer

oriented approach or customer focus in their five areas of businesses such as Cash

accessibility, asset security, money transfer, deferred payment and financial advices.

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 Cash
Accessibility

Financial Asset
advices Security
Customer
Oriented
Approach

Deferred Money
Payment Transfer

The customer relations' managers should focus:

• To win back or save customers

• To attract new and potential customers

• To create loyalty among existing customers and

• To up sell or offer cross services.

The future of banking business very much depends upon the ability of the banks to

develop close relationship with the customers. In order to develop close relationship

with the customers the banking industry has to focus on the technology oriented

innovations that offer convenience to the customers. Today customers are offered

ATM services, access to internet banking and phone banking facilities and credit

cards. These have elevated banking beyond the barriers of time and space.

Customer relationship management (CRM) practices have traditionally included sales

activities, marketing, customer care and even technical support. However, these same

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organizations handle collections the way they did 20 years ago – with separate

customer care and accounts receivable functions. This “reactive” strategy stalls

collection activity -- and payment -- until the customer is well past due.

However, a new “preventive” collections approach that combines advanced

technology and sophisticated billing analytics identifies revenue recovery

opportunities early in the payment cycle. This strategy, with proven success at sites in

27 countries, secures payment before the customer ever reaches the collections stage.

In many cases, customers that have receivables issues are still contacting the

company’s customer care representatives to conduct business. But one can route these

contacts to a new type of collection associate called “universal agents” who handle

customer service calls and then move the conversation to billing or collection issues.

In a single call or multi-channel engagement, costs are reduced, payments are

rendered, and customer relationship is preserved and revenues increased.

Here are the seven key steps to establish and manage a preventive collections strategy

alongside your current customer relationship management practices:

1. Choose the right people

Screen agents for collections, with a customer care skill sets up-front. Identify

individuals capable of serving as “universal” agents, able to handle virtually any issue

– from standard customer care issues to past-due collections. Then, match top

performers in each area to specific clients.

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Universal agents can easily be identified by their customer service skills and a thick

skin required for past-due collections. Simply put, you can teach a collections agent

how to handle customer care, but customer care agents rarely have the skills needed to

manage collections calls.

2. Provide up-front and ongoing training

Once identified, universal agents should receive special training. They must have the

empathy, bridging and negotiation skills needed to open and close a customer care

issue and negotiate and resolve a past-due billing issue – often during the same call.

A certain amount of ongoing training is required. Agents must be kept abreast of the

latest client offers. They must know how to change a customer’s payment due date,

offer credits, or waive a service fee.

If the customer recently lost a job, the universal agent must be able to show empathy

and offer payment alternatives.

3. Control customer service quality and performance

With customer data and payment habits on their screen the moment the call comes in,

universal agents can deliver a quality customer experience by offering empathy and

sympathy – while remaining firm enough to meet the client’s collection targets.

Statistics prove that empathy and the ability to offer alternative arrangements – as

opposed to the traditional, bottom-line collections call enhances customer

satisfaction/loyalty and increases the likelihood of receiving payment.

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4. Leverage customer data to build prevention strategies

When a customer gets his or her paycheck, every company wants to be paid first. By

having the individual’s payment history on-screen at the outset, the universal agent is

better able to negotiate. They may offer suggestions like: “Can we change the due date

to better fit your needs?”

After incorporating a more conversational, sympathetic approach, our clients

experienced a twelve percent lift in payments. Though a friendly, caring approach

increased the handle time, it also delivered superior financial results.

5. Provide access to all customer contact channels

More and more consumers and business people are using non-traditional means for

communications. Communicate in the medium of their choice. Employing a multi-

channel approach, the preventive collections program can leverage or combine voice

communications with other direct contact channels, including direct mail, chat and

email.

6. Deliver global consistency

Implement and enforce a set of operating standards for all customer care and

collection interactions throughout your operation. This will ensure equally trained

agents with reliable service to your clients around the world.

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This program is derived from a set of highly defined standards developed from global

call center experience over the past 20-plus years. It delivers universal agents with

consistent skill levels, regardless of where they’re located.

7. Provide motivation and incentives

Every client has different needs. When it comes to motivating and incenting universal

agents, there are a variety of client-specific compensation models. Earnings and

incentives can be based on cure, liquidation and collection rate measurements.

With this strategy, agents are able to engage late-paying customers and gradually

move them away from the collections process, in some cases permanently. Identifying

and resolving past-due issues before the customer reaches the collections stage is a

proven way to enhance the bottom line.

CRM Strategy
In any organization CRM strategy is a wide-ranging and detailed definition of the

scope of' the CRM programmed towards organizational goals. "The strategy is needed

to keep businesses customer centric and to help the company constantly evolve

internal processes and technology to acquire and retain customers.” CRM is

fundamentally a strategy aligned with the superseding corporate strategy. It tries to

attempts to optimize a firm's profitability, revenue and customer satisfaction by

focusing on a customer centric process. The idea of CRM is that it helps businesses

use technology and human resources to gain insight into the behavior of customers

and Customer relationship management is a broad approach for creating, maintaining

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and expanding customer relationships. CRM is the business strategy that aims to

understand, anticipate, manage and personalize the needs of an organization's current

and potential customers. At the heart of a perfect strategy is the creation of mutual

value for all 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. So the concept of product life cycle is giving way to the

concept of customer life cycle focusing on the development of products and services

that anticipate the future need of the existing customers and creating additional

services that extend existing customer relationships beyond transactions the value of

those customers.

Implementing CRM strategies, firms can achieve many goals such as:

 Plummeting costs of sales

 Plummeting costs of acquiring new customers

 Enhanced customer satisfaction and profitability

 Decreasing the need to acquire so many new customers

 Calculate profitability of customers

 Higher customer retention rates

With an effective CRM strategy, a business can increase revenues by:

 Providing services and products that are exactly what your customers want

 Offering better customer service

 Cross selling products more effectively

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  Helping sales staff close deals faster

 Retaining existing customers and discovering new ones

Requirements of an Effective CRM

Structure
An effective CRM system consists of the following:

Personal Customer Needs

 Personal contact
 A knowledgeable and reliable banker
 Relevant information
 Customized and timely solutions
 Value for money

Business Customer Needs

 A professional partnership approach

 High levels of information
 Customized and highly responsive service
 Quality Customer Information

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Types of CRM

Operational Collaborative
Analytical CRM
CRM CRM

Broadly, three types of CRM are adopted by banks:

(1) Operational CRM – In this, CRM software packages are used to track and

efficiently organize inbound and outbound interactions with customers including

the management of marketing campaigns and call centres. Operational CRM

supports frontline processes in sales, marketing and customer service, automating

communications and interactions with the customers. They record contact history

and store valuable customer information to ensure a consistent picture of

customer’s relationship with the bank that can be retrieved by staff as per

requirement. The major benefits of operational CRM to banks are:

a) Sales Force Automation

b) Customer Service and Support

c) Enterprise Marketing Automation

(2) Analytical CRM – It is about analyzing customer information to better address

marketing and customer service objectives and deliver the right message to the right

customer at the right time through the right channel. It involves the use of data

analysis to extract knowledge for optimizing customer relationships.

The major benefits of Analytical CRM to banks are:

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 a) Customer Retention

b) Fraud Detection

c) Optimizing marketing efforts as per customer life time value

d) Credit Risk Analysis

e) Segmentation and targeting

f) Development of customized new products matching the specific preferences

and priorities of customers

(3) Collaborative CRM - These involve systems facilitating customers to perform

services on their own through a variety of communication and interactive channels. It

brings people process and data together and enables channeling of data and

information appropriately to bank staff for proactive decision making and enhanced

informed customer service and support activities. It provides a means of information

sharing to all concerned in timely manner and includes customer as a creator of

service. The major benefits of collaborative CRM to banks are:

a) Providing efficient customer communication across a variety of channels

b) Online services to reduce customer service costs

c) Providing access to customer data while interacting with customers.

Thus, CRM can be understood as a catalyst enabling transformation of Banking from

traditional ‘Transactional banking’ to ‘Relationship Banking’ by use of technology.

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Benefits of CRM
Benefits of CRM can be categorized into 3 groups namely: benefits for customers,

benefits for employees and benefits for banks.

1) Benefits for customers

 There is more coordinated and professional approach to customer

contact.

 With up-to-date customer information, Banks can offer more

personalized services.

 Customers feel empowered if they have greater access to products and

services. For example, 24 Hours banking.

 Targeted product and service offerings can be timed to coincide with

customer events and requirements e.g., Education Loans and Tourism

Loans.

2) Benefits for employees

 Employees are empowered with the information to deliver high quality

service and meet customer expectations

 Employees have more time to serve customers.

 Employees have higher satisfaction ratings

3) Benefits for banks

 Managers are empowered with information that can help them manage

customer relationships and make better decisions.

 Optimum use of resources

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  Customer satisfaction and increased loyalty

 Improved customer acquisition and cross-selling

 It helps in capitalizing on short windows of opportunities in the market.

Customers Employees Banks

CRM in Banking: 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 utilized 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. Customer’s 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.

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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 branch’s current and long term profitability. In Atlanta Bank’s 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.

CRM in Banking: 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

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are proliferating. Analytical CRM is being utilized but not by all banks. Here also a

few illustrations of Indian banks using CRM will define a clearer picture of CRM in

Indian banking.

Yes Bank has developed YCCRM (Yes Bank Collaborative CRM), the prominent

features of which are ‘discussion boards’ and ‘templates’. These enable sharing of

relevant customer information to all concerned staff members to design new products,

provide proactive service, and informed customer handling leading better service. It

enables collaboration among staff and customers to create higher customer value

through use of CRM software.

Punjab National Bank deployed CRM software with modules of Prospect

Management, Lead Management, Activity Management, Product Management,

Complaint Management and Business Intelligence Reporting. The payoffs are in terms

of increased customer base, cross selling, sales force optimization, efficient lead

management and higher productivity.

ICICI identified five functional areas which when integrated will give Bank its CRM

Business Transformation Map. Core areas of transformation were business focus,

organization structure, business matrix, marketing focus and technology. The pay offs

were : lower total cost of ownership, efficient management of volume growth, greater

responsiveness to market needs, improved operations, decrease in operational costs,

reduction in turnaround time, and integrated platform for all applications of bank. The

recent CRM application is enabling ICICI customers to perform transactions via the

platform of face book, a social networking site. This brings the bank one step ahead in

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providing convenience and service through CRM. SBI’s Business Intelligence system

integrates data from nearly 70 databases to form a single enterprise data warehouse

model. The system generates 248 reports daily for top management and each of the

branches have access to reports generated particularly for them. This has empowered

decision makers to have actionable data lending to faster decision making based on

latter’s information.

Bank of Maharashtra has developed in-house software which generates and updates a

variety of reports on detailed customer information and sends to branches. These

reports are utilized for better customer understanding, better customer support and

service by access to relevant customer information with all stakeholders to enable

decision making and Business Development as well as retention activities.

Issues and Challenges

CRM is a strategic initiative which has organization wide implication. Many banks are

still struggling to make proper use of this very useful mechanism. However, the

adoption and utilization is dependent on a number of factors and impediments.

Broadly the issues are pertaining to: People, Processes, Data and Technology. Also a

major drawback is the general perception of CRM being a Technology imperative.

There is a great need to understand that technology is only the enabler to CRM. In the

real sense it is an organization wide strategy. The success of this depends on a careful

integration of Organization’s goals, structure, systems, processes and resources.

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  Change in culture
 Change in structure & systems
Process  Demand for more pro-activeness

 Lack of Knowledge, skills & training

 Lack of motivation
People  Inadequate performance mgmt.
parameters.

 Fragmented Data
 Legacy systems & Quality of data
Data  Lack of initiative to manage & utilize
data

 Misconception about role of

technology
 Lack of Integration
Technology  Empowerment to frontline staff
 Underutilization

Technology issues

The following are the impediments to CRM implementation in context of technology:

(1) Misconception about role of technology: Most officers perceive technology as a

limited to record of information and transaction. The use of technology in further

sophisticated information processing and dissemination is not done.

(2) Lack of Integration: There are multiple channels and multiple technologies in use

simultaneously in customer interface, service and sales. The integration of this

complex system of technologies is a challenge.

(3) Empowerment to frontline staff: A Frontline staff has customer profile and data.

Most of them have no motivation to further process these and make full utilisation of

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these to provide better services and proactive selling effort. They are neither trained to

use customer analytics nor to customise the Banks offering.

(4) Underutilization: the single integrated view of customer, past transactions

preferred mode of business are known, but no mechanism is in place to utilise this

with aid of software like lead management and activity management for higher

effectiveness in sales and service.

Data issues

The issues related to data are:

(1) Fragmented Data: Banks have multiple repositories of data accumulated across

various channels. Systematically collecting and organizing this huge data is big

challenge.

(2) Legacy Systems: Historical data collected from legacy systems tend not to have

been collected in any standard form.

(3) Quality of data: As huge amount of data has to be cleaned and a lot of missing

data has to be identified and included. This process has to be carried out across

branches which in addition to their core tasks have this work.

(4) Lack of understanding, skill and initiative to manage and utilize data:

Employees expected to organize and systematically manage data may not dot

efficiently because of the lack of understanding of the strategic perspective of this

activity. They also lack the necessary infrastructure and skill to complete this task.

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People issues

1) Lack of knowledge and skills in converting data to customer knowledge

2) Lack of motivation for utilizing the potential of CRM solution

3) Inadequate performance management parameters

4) Less or insufficient decision making authority : In order to use CRM concept

towards customer centricity ,sufficient decision making power is required to

provide customized, responsive and proactive services

5) Training: Staff lacks training in IT, its applications, the complete use of software

and its applications as well as marketing skills, analytical skills, uses of customer

information and service skills for implementation CRM.

Process issues

As CRM is an organization wide strategy the entire processes need to be aligned

appropriately. Some important process issues are:

(1) Change in Culture: The CRM implementation demands a change in

organizational culture in terms of vision, mission, philosophy, and shared values. This

encompasses a fundamental change in the organizational practices and employee

behaviour.

(2) Breaking the silos: CRM cannot succeed in Silo structure of departments. It

demands integration and collaboration of all departments on a continuous basis. So,

Breaking of silos prevalent in traditional organisation structure is a challenge.

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(3) Change in Structure and Systems: CRMsuccess lies in ownership of CRM by all

departments with Marketing in the strategic role of combining efforts in all these

towards better customer service. This basic structural change from product centric

organisation to customer centric organisation faces impediments in terms of role

conflicts, ambiguity, resistance and attitudinal impediments.

(4) Demand for more pro-activeness and flexibility: The former strict hierarchical

and rigid structure has to be transformed to flexible, responsive and proactive

structure. This demands top management support, proper training and efficient follow

up systems. In addition to behavioral issues the full utilisation of CRM benefits cannot

be attained unless this is enabled.

Strategic framework for successful

implementation of CRM
A global survey conducted by the IBM Institute for Business Value and part of IBM

Business Consulting Services three part series ‘Doing CRM Right’, claims that only

15 percent of CRM projects are fully successful, but that the success rate can be

improved to as high as 80 percent, through proper business methodology and

prioritization.

Banks have made a large investment in technology and benefits thereof are being

realized in terms of improved customer empowerment, customer orientation and

convenience. Yet to realize the full potential, a need to emphasize the strategic

importance of CRM is felt. For successful adoption and implementation relevant

changes in banks’ culture, practices, processes and employee attitudes are required.

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The following section suggests a strategic framework to enable successful CRM

implementation.

(1) Recognizing CRM as a strategic initiative

(a) CRM has many dimensions, resulting in varied perspective to CRM. Therefore, the

CRM philosophy in its true sense is not understood by stakeholders. This becomes a

major impediment to acceptance and implementation of the concept. So, it is

imperative to state that CRM is a long term strategic initiative meaning that it

emanates from the mission of organization and is considered as a key means of

attaining the organization’s long term objectives. It also means that it is designed to

sustain the organization’s objective attainment, fitting in the plan of action formulated

to optimize the organization’s opportunities and face the threats. Here a clarification

of some myths about CRM is helpful.

(b) Before embarking on CRM, it is necessary to delineate CRM and technology. It

should be clearly understood that the role of technology is in enabling the CRM

strategy. Once this is clearly understood, CRM will get a buy in by all employees in

Bank. Passing the entire responsibility of CRM related tasks on to IT department does

not result in conversion of technology applications into business. Passing solely to

Marketing department, without educating the officers about functionalities, results in

non-utilization in most cases and underutilization in some. The need of the hour is

recognition to CRM as organization wide strategy or planned sequence of activities to

develop and nurture customer relationships.

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(2) Top management support

Without leadership and endorsement of top management, the CRM initiative may not

get the required weightage, attention and effective deployment. In fact, the philosophy

should be propagated and sold to internal customers i.e. employees at all levels by

senior management. A particularly important role of top management in this context is

development and sharing a ‘CRM vision’. A study of best practices adopted by

organizations successful in implementation of CRM indicates that senior managers of

these firms create a vision for how CRM will change their organizations. In addition

to this, they include attributes that affect customers’ perceptions of value, how they

can bond with organization, product and purchase intent. This vision evolves as the

organization progresses ahead in CRM journey. For example, at a major Canadian

Bank, initially the vision was associated with the development of customer

information systems. With time the vision became more focused on the delivery of

differentiated value propositions through products to customers.

(3) Realignment of Organizational Structure and practices

Sales force Automation, dashboards, loads of customer information in MIS reports

cannot lead to CRM implementation in it’s true sense unless and until the organization

structure in Banks is realigned. The present structure in most banks are product and

process centric. Having installed technology set up for CRM, relevant changes in

structure making it compatible to adoption and use of technology enabled CRM is the

need of the hour. This has certain dimensions such as:

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(a) Steering Committee for CRM

At present, there are Marketing divisions, IT departments, MIS departments, Data

Centres and Project Management offices. All are working towards effective

management of customer information towards attainment of Bank’s objectives, one of

which is maintenance of customer relations to develop business. There is a need to

streamline this effort towards attaining the CRM vision. This can be achieved through

formation of a CRM Steering Committee at the top level which has representatives

from all these departments. The Committee can synergies the efforts of all these

departments, so that CRM practices are identified, communicated and practiced in

coordination with sufficient top management support and functional expertise.

(b)Breaking of Silos

Present systems are marked by a silo approach where in IT department works in

isolation to marketing department. They have different objectives and strategies. But,

it is necessary to understand that CRM cannot be successful in this environment.

Coordination, communication and joint ownership of both the departments is

essential. This will enable IT people to give technical expertise and marketing people

to link the market realities to technology and then plan products, services to match

them.

(c) New positions

The ownership of CRM concept and management of its implementation and adoption

throughout the Bank is not possible without creation of some new positions which

handle the responsibility and anchor the propagation of the concept. Most desirable is

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that, at all levels officials responsible for different dimensions of CRM be employed.

To overlook the overall implementation and management, an H.O. level position be

created. Then IT, Marketing positions for specific tasks of campaign management,

software development and product development etc. can be created.

(4) Change in culture

CRM being a strategic initiative demands a change in organisation culture pertaining

to perceptions and practices. CRM to be successful needs buy in from all

organisational members and particularly the recognition of the fact that each one is

responsible for CRM. It is often observed that CRM is perceived to be the task of

employees in direct contact with customers. The truth is every employee is a part of

process leading to customer satisfaction. So, each can contribute meaningfully in

value addition to customer irrespective of his task and role in process sequence. Thus,

a realisation of each employee’s basic role towards customer centricity will strengthen

adoption of CRM.

(5) Communication and coordination

To put life into technology and strategic plans for customer acquisition, service and

retention, communication of CRM vision, enabling practices and desired behaviours is

necessary. Also, coordination of human efforts and customer communications to

software enabled CRM updates, alerts and templates is essential. This can be achieved

by Multichannel Integration Process. Today Banks customers are utilising a variety of

channels, leading to strategic customer information scattered in islands across Bank.

CRM objectives cannot be attained unless these transactions across channels like

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internet, mobile, call center, branch, POS terminal, ATM, etc. are tracked. The

multichannel integration will enable a unified view of the customer leading to better

insights into his preferred products, channel preference, usage frequency, needs and

wants. This definitely will aid not only better and informed service, but also new

product development, targeting, approaching the customer with the right product at

the right time, through the right channel. This phenomena called `versioning’ can

differentiate a Bank’s offerings from other players just bombarding offers and

products through all possible channels leading to wastage of effort, resource and time.

Apart from this, unified customer view will enable informed decision making

preventing attrition, bad loans and frauds.

(6) Motivation

Lack of motivation towards adopting, accepting and using CRM applications is a

major impediment to CRM in Banks. This can be addressed by helping employee at

all levels to understand CRM concepts and firm’s vision for CRM as well as

communicating customer, market and profitability data to describe the Banks’

progress, as it proceeds on its CRM journey. Also helpful will be setting expectations

to help individuals and groups align their performance with the goals of CRM. It is

essential to set expectations to help individuals and groups align their performance

with the goals of CRM. People need to know the link between CRM and their own

role performance and success.

(7) Training

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Adequate training to end users is essential keeping in view the involvement of new

technology, realignment of business practices and magnitude of fundamental change

in Bank’s service offerings. Training at all levels focused on CRM philosophy,

applications in banking, new processes to be adopted, employee’s role in customer

service, and change management along with use of new technology is the need of the

hour. In addition, behavioral training in reinforcing customer centric attitudes and

behavior is required. In other words, rather than simply demonstrating how to use

software’s features and functionality, training should teach employees how to

effectively execute the business process, enabled by the CRM system.

E-CRM in Indian Banks

The advancement in information and communication technology has made the new

millennium, e-millennium. The dividing line between banks and non-banking

financial institutions, like insurance and mutual funds, is getting blurred. Competition

from players in the market has resulted into products and services traditionally offered

by banks and financial institutions, are now being offered by non-banking

organizations more efficiently and effectively. In India the monopoly of banks over

payment systems would be broken very soon after the launching of satellite based

money order services by the P & T department. Now banking activities are not

confined to borrowing (collection of savings) and lending (disbursement of loans), but

provides a plethora of services keeping in mind the requirement and convenience of

customers. In the fast changing banking environment worldwide, banks in India will

not only have to learn the new rules but also upgrade the skills as well as the tools of

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banking. The challenge lies in addressing these issues and at the same time keeping

the wheels of growth moving.

Technology, people and customer are the three elements on which hinges the success

of banking in the e-millennium. Technology will be an enabler in managing the pace

and quantum of change. Success in technology can be brought about by skilled human

resources. In response to these technological challenges, organizations have to evolve

internal capabilities and skilled human resource management which is fundamental in

generating these capabilities. However, ultimately the bank’s performance depends

upon the satisfaction of its customers. In the emerging competitive and technological

driven banking era, banks have to strive hard for retaining and enlarging their

customer base.

E-CRM, which is the latest buzzword in the corporate sector, is perceived as one of

the effective tool in this direction by the banks. The present paper attempts to analyse

the concept of e-CRM in Indian banks from its various dimensions covering

specifically its need, process, present status and future prospects.

Towards E-CRM
In the early 1990s, the concept of relationship marketing was formally introduced into

the services marketing literature. Financial services institutions, airlines and other

service providers found it profitable to retain and reward existing customers rather

than run after new customers. It was established that building closer relationships with

the customers resulted in better returns to organizations through the following means:

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 1. Increased use of services by loyal customers.

2. Charging of price premiums for customised services.

3. Referrals by satisfied customers that brought in new customers.

The concept developed for services marketing also found applications in the case of

industrial and customer products. The conventional market approach based on 4 P’s

(Product, Price, Place and Promotion) is strongly grounded in the industrial age where

goods were mass-produced, as distributed and mass-communicated using mass media.

However, after the advent of Information era, it has become possible to target

customers on a one-to-one and one-to-many basis and satisfy their individual needs.

The customer relationship management (CRM) is a well-defined series of functions,

skills, processes and technologies which together allow organizations to more

profitably manage customers as tangible assets. The emphasis is on defining the

customer as valuable in the long-term and on viewing customer relationships as

learning relationships. CRM recognizes that success over a period stems from

customer loyalty and that long-term profitability lies in fostering unique lifetime

relationships with small number of carefully chosen customers. It calls for increasing

customer share, that is, retaining customers and selling them new customer made,

higher-margin products over time.

The concept of CRM when seen in the context of e-business or transactions over an

electronic medium, it translates in to e-CRM, which essentially deals with managing

customer interactions over the web. After the adoption of the Internet and availability

of electronic channels of communication, it is becoming possible to capture customer

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related information intelligently at the interaction stage itself. E-CRM applications are

the generic of application systems which handle customer interactions over these new

electronic channel of communications.

The whole model of CRM revolves around the customer life-cycle comprising the

following four stages:

1. Customer requisition through referrals.

2. Customer development through personalization and customization.

3. Leveraging customer equity through cross-selling and up-selling.

4. Customer retention and referrals.

In e-CRM these four steps of CRM are managed by using electronic media.

E-CRM and its Benefits

The long-term business relationships provide many potential benefits for banks and

clients. It is generally less costly for any service firm (bank) to maintain and develop

an existing client relationship (Berry 1983). The customer can also make transaction

cost savings by developing a long-term relationship with bank. The numerous studies

carried on in USA reveals that transacting through Internet is much more economical

than other channels. For instance, it has been estimated that while it costs nearly US

$1.07 per transaction using the normal means, on the Net the costs comes to a mere

cent. Even when compared with telephone banking (5 cents) and the ATMs (2.7

cents), the Net seems to have an edge. In addition, the strategic and social benefits

may be considerable for both parties (Halinen 1989). A long-term relationship may,

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for instance produce strategic benefits for the bank in its marketing by generating

references and credentials or it may create competitive advantage by building barriers

to switching. The client on its part may enhance the quality of services offered by

engaging in long-term business relationship with a bank (Berry & Parsuraman 1991).

In Net banking the financial statement can be viewed, printed or down-loaded in any

format for ease of analysis. Thus, Internet as a service-delivery channel shifts the

control of transactions from the bank staff to the customer. Net bank customers find

better information through websites than from the unwilling, less knowledgeable and

non-cooperative banking staff.

Thus high level of customer control that translates into customer satisfaction and

repeat purchase is the most critical advantage of e-CRM in banks. Other related

benefits include decreased cost of sales and promotion, high supply-chain

management integration and improved logistics management.

Differences between CRM and e-CRM

Major differences between CRM and eCRM:

Customer contacts

 CRM – Contact with customer made through the retail store, phone, and fax.

 eCRM – All of the traditional methods are used in addition to Internet, email,

wireless, and PDA technologies.

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System interface

 CRM – Implements the use of ERP systems, emphasis is on the back-end.

 eCRM – Geared more toward front end, which interacts with the back-end through

use of ERP systems, data warehouses, and data marts.

System overhead (client computers)

 CRM – The client must download various applications to view the web-enabled

applications. They would have to be rewritten for different platform.

 eCRM – Does not have these requirements because the client uses the browser.

Customization and personalization of information

 CRM – Views differ based on the audience, and personalized views are not

available. Individual personalization requires program changes.

 eCRM – Personalized individual views based on purchase history and preferences.

Individual has ability to customize view.

System focus

 CRM – System (created for internal use) designed based on job function and

products. Web applications designed for a single department or business unit.

 eCRM – System (created for external use) designed based on customer needs.

Web application designed for enterprise-wide use.

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System maintenance and modification

 CRM – More time involved in implementation and maintenance is more expensive

because the system exists at different locations and on various servers.

 eCRM – Reduction in time and cost. Implementation and maintenance can take

place at one location and on one server.

Current Status of e-CRM in Indian

Banks
Internet has enabled banking to be at the click of the mouse. At present there are five

functional categories for online banking sites – on line brochure center, interactive

bank, e-mails, calculations and cyber banks, which offer customers access to account

information, inter-branch funds transfer and utility bill payments. Banks have tied up

with service providers in telecom and power sectors like MTNL, BSES and cellular

service providers for allowing their customers to make bill payments online. In India,

new private sector banks like ICICI Bank, HDFC Bank, Global Trust Bank and UTI

Bank, have taken the lead in e-banking. Among the foreign banks, Citibank, has

noticeable presence, while others like Federal Bank, HSBC Bank, Deutsche Bank and

ABN Amro Bank, are moving towards becoming big players in e-banking. Even the

state run banks like SBI and Union Bank of India have realized the advantages of such

services.

ICICI Bank, the first bank to offer e-banking services in India has more than one lakh

regular internet user accounts, of which more than 25 percent are of NRIs. The bank

has viewed advanced information technology as a managerial and competitive tool

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and has tried to harness technology to the maximum possible extent to deliver superior

customer services.

The Bank has emerged leader in B2B and B2C initiatives. B2B solutions (i-payments)

aim at facilitating online supply-chain management to it corporate clients by linking

them with their suppliers and dealers in a closed business loop. All members in this

loop are required to maintain the account with the bank. This product has gained

considerable market acceptance and the bank has already entered into memorandum

of understanding with over 100 large Indian companies.

The Bank became the first bank in India to introduce utility bill payment through

Internet. Bank has entered into tie-ups with leading telecom companies such as

MTNL, Tata tele-services, VSNL and cellular operators such as BPL Mobile, Airtel

and Usha Martin. Tie-ups have been established with BEST & BSES for electricity

payment in Mumbai. The bank with its net banking service called ‘Infinity’ goes a

step forward by allowing the account holder to transfer fund into another person’s

account with the bank. Also one can intimate about the loss of an ATM card over the

net when using Infinity. Corporate sector can issue letter of credit and make inquiries

regarding bills sent for collection via this service. It also provides facility for

nicknaming all accounts to avoid remarking lengthy accounts number.

UTI bank, has tied up with Cosmat Max, to create a communication network for its

customers. The network will have 50 VSAT terminals at strategic locations, which

will help in ATM servicing and internal management information system. The bank

has signed a memorandum of understanding with equitymaster.com for e-brokering

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activities of the site. This will enable the bank to leverage its database for e-commerce

and other initiatives with data-warehousing and data-mining, where information of the

customer spending habits will be used to sell other corelated products like credit cards.

HDFC Bank has, for the first time in India made the e-shopping experience secure

online and real time with the launch of its payment gateway. This will allow any

Visa/Master credit card holder anywhere in the world to make payments for global

services over the Internet. The bank has tied up with 15 portals and is in talk with

several others to offer secure business to customer e-com. transactions. The first

secure, on-line and real-time e-com. credit card transaction in the country was done on

the Easy.2 shoppe.com shopping mall, enabled by HDFC bank on a Visa card,

heralding the launch of the payment gateway. HDFC Bank also offers a direct debit

option whereby its customer can pay for the goods or services by a secure password

enabled transfer of funds from their account to the merchant account.

The state run public sector bank, the State Bank of India (SBI) made a quiet foray into

net banking. The country’s largest commercial bank launched on-line SBI - an

account browsing facility over the Net for customers in eight select branches including

four NRI branches.

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E-CRM Techniques used by Banks in
India
Banks leveraging technology can develop innovative customer solutions to attain

growth with profitability within the framework of sound risk-management practices.

Techno-savvy banks are tapping into online services to initiate a new era in

relationship management to create one to one relationships as well as one to many

relationships to enhance their competitive advantage.

Recent developments in critical areas of IT, have changed the way banks are

managing their customer relationships. The following are some of the latest e-CRM

techniques used by banks in offering new products and services to its customers.

1. Internet banking: Internet is being used by banks to disseminate information to

customers about bank’s products and services through their websites. The banking

services are provided through Net with convenience of ease and accessibility. Internet

banking offers many benefits to the banks viz. Vast reach, reduced transaction costs,

direct marketing and cross selling, build bank’s brand, etc. It also offers benefits to

customers’ viz. reduced cost, convenience, banking with the bank and not the branch,

speed, better cash management, etc. The new private sector banks – ICICI Bank,

HDFC Bank, UTI Bank and the Global Trust Bank have taken the lead in Net

Banking. The state run public sector banks are lagging behind in Net banking,

although modest beginning has been made by the State Bank of India.

2. Data Warehousing and Data Mining: This technique is used to develop and use

customer data to check their profile, retention and loyalty patterns. They provide

45 | P a g e
valuable inputs for retaining customers and developing products and services for the

future.

3. ATMs: At present installed number of ATMs in the country is 1800, which is likely

to be more than 4000 by next year. Most of the demand for this technology is coming

from State owned banks. Until now, ATM services have been confined to deposits and

withdrawal from bank accounts by customers. The growth in ATMs has been fuelled

by a race among banks to expand their customer base by going in for more value

added services (bill payments and ticketing services) on these machines.

4. Telebanking or Mobile banking: These services empower the customer with an

instant access to routine queries and transaction or check bank balances.

5. Computerized decision support system: This helps the banks in applying

optimization techniques in functional areas such as, asset–liability management,

optimization of investment portfolios and asset portfolios through linear

programming. This is a practical tool which helps the bank managers and customers in

optimizing investment decisions.

6. E-mail: Banks can maintain the list of its best customers and inform these members

through e-mail the various services and schemes offered by the bank. These days this

is considered as one of the cheapest and effective means of communication.

7. Computer networking: Networking between the branches of divisional, regional,

zonal and head office of banks provide access to customer data base from the

executive desk. This will integrate the front-office applications with back-office

requirements, thus generating MIS for branch managers and executives at the different

46 | P a g e
controlling offices including Head office for accurate, speedy and cost-effective

customer services.

8. Customer smart cards: These cards are issued to key customers which carries all

the relevant information, details of previous and repeat purchases, to make it

convenient for the customers to recall and for the banks to keep a track of the

behavioral and purchase trends. Utilities like BEST in Mumbai are already using

smart cards for ticketing in its luxury buses.

E-CRM Future Prospects

To take advantage of growing markets, global giants like PeopleSoft, SAP, Baan,

Nortel, Talisma Corporation, Oracle Corp., Pivotal, and Siebel Systems are planning

to invest in India so as to provide e-CRM software’s and services to Indian companies

including banks. This will facilitate the e-CRM in Indian banks.

On account of factors such as rise in the depositor base of banks and an increasing

tendency among the new generation banks to diversify into web-enabled services, the

number of net bank registrations has sky-rocketed. World-wide trend shows that net

banking is perceived as a convenient and fast way of doing banking business and is

fast gaining grounds. In Australia, the banks that do not provide net banking facility

and do not share information over the net are considered ‘dead ducks’. In spite of all

these advantages, IT-enabled banking is subject to severe constraints and limitations.

Firstly, the use of web banking by customers has been by and large limited to balance

enquiries and making utility bill payments. Secondly, for online banking to reach a

critical mark we need requisite infrastructure in terms of availability of personal

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computers, adequate bandwidth and uninterrupted power supply, which presently is

lacking in India. Thirdly, the awareness about the online banking even among the

upper echelons of society is very poor. Lastly people are insecure about the security

offered by online banking. Hackers have managed to crack into even the Pentagon and

NASA web servers, besides a host of other high security sites.

Once these issues relating to infrastructure and security are resolved IT-related

services will get a big boost in Indian Banks. Indian government, being aware of the

problems relating to e-transaction has already passed a bill on IT on May 17, 2000.

The bill involves legal provisions relating to piracy, defamation, advertising, taxation,

digital signatures, copyrights and trade secrets in the cyber-world. The bill intends to

facilitate e-business by removing legal uncertainties created by new technologies.

48 | P a g e
Banks with their Respective CRM
ICICI and CRM

ICICI bank currently has the ability to process 0.27 million cheques per day

and manage 7000 concurrent users.

The bank has successfully implemented Finacle software and has deployed the

solution in the areas of core banking, consumer e-banking, corporate e-banking and

CRM. ICICI Bank has also gained the flexibility to easily develop new products

targeted at specific segments such as ICICI Bank Young Stars- a product

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targeting children, Women's Account addressing working women and Bank

@campus targeting students.

The CRM initiatives in India’s ICICI Bank hold together its compelling story of

growth. Its growth in customer base, channels and product & service offerings. The

ICICI bank is one of the private sector bank which is providing the customer value

added services. They are not only able to satisfy the customer but they are successful

in building a never-ending relationship with the customer. They are able to retain them

and carry business with them to benefit both the organization and the customer.

Customer preferences and needs are very well understood by this bank. With the

help of technology they are able to develop brand equity in the market

and differentiate themselves from the competitors. On the 19th of January 2000, a

click and mortar made an announcement that offered a clear but early measure of the

impact of the "e" in e-business. On that day the ICICI Bank released performance

figures related to its previous year’s dotcom initiatives. The company reported a

staggering 500% increase in Internet customers during the period from March

31, 1999 to December 31, 1999 – from 4000 to 24,000 customers in 9 months. While

the absolute number of 24,000 or the growth of 500% might not mean much, it does

speak volumes of the nascent potential. ICICI Bank and the ICICI Group as a whole

have been striding purposefully down the e-pathway. The group prefers to call it a

"clicks and bricks" strategy that provides multiple access points to its customers. For

its traditional customers there are the lean and mean brick and mortar branches

propped by ATMs, call centers and direct selling agents. Internet banking and WAP

enabled services take care of the Supply and technology savvy professionals of today.

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The rise in Internet banking customers is a result of the Infinity, Internet banking

facility launched by the bank. The facility, initially made available to NRIs and later

to resident Indians permits online opening of accounts, bills payment, account

information.

Call centers

ICICI Bank’s Bombay call center handles 25 different products, for 10 million

customers, with 620 positions. Now ICICI Bank’s branch network handles less than

half of all transactions – a shift which has taken an axe to the company’s cost- to-

serve. ICICI appreciated early on that by centralizing their service infrastructure, and

centralizing their service expertise, they created a new level of service for customers.

The call center has played a leading role in transforming the bank’s value

proposition for its customers: The call center also provides an opportunity

to shift the qualitative nature of the relationship between bank and customer to a

new level. Much of the extra leverage with customers that the call center

brings is tactical. A customer is a lot more receptive to up selling and cross selling

when they’re phoning ICICI. The humble call center is ICICI Bank’s means of

shifting away from a market share based product-as-commodity mindset, to those

stresses the importance of deepening exiting customer relationship.

ICICI used to spend a lot of energy trying to make sales. Now their emphasis has

changed – they spend their energy to get to know the customer better. It is when a

customer feels comfortable with the relationship they have with ICICI that they are

likely to deepen their commercial relationship with them. The call center is there new

tool to getting to know the customer better. The speed of the shift away from the

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branch as the primary means of interacting with the bank shows the receptiveness

of Indian consumer behavior to the use of new channels. The technology usage is far

higher in a call center compared with any other environment. The call center is a

cheaper channel than the branch, and often it is more convenient for the customer.

This convenience can be supported by technology to provide a higher level of service

than was possible previously. All the products and process are unified in the single

call center – allowing the customer to get a seamless service. So ICICI is therefore

able to truly take a customer centric customer view. ICICI is able to get a customer

who has been rejected from taking a credit card; they immediately offer a debit card.

The ability to serve across all product categories from a single location has enabled

the bank to provide a level of service qualitatively superior to its competitors, and this

is offered as a complementary extension of the branch capabilities. Even the branches

are moving very rapidly towards offering seamless service to all the customers. The

relationship between the branches and the call centre is very good, and the branches

are discovering how to focus their efforts on more rewarding service relationships.

ICICI has understood the importance of customer service

over the phone, but it was only fairly recently that they began the task of consolidating

their resources on customer service and customer relationship enhancement.

The bank takes people who are first class graduates with a lot of yearning to learn.

Following a selection process that includes telephone, personality and literacy

tests, there is a post-recruitment process embracing a continuous learning

program.

52 | P a g e
E-marketing

The e-initiatives of the ICICI group have not been limited to customer servicing. The

marketing activities for its various products are also taking the online route. In April

2000, through tie-ups with Orange and Airtel, ICICI started offering limited WAP

based services for customers on the move. A month later, on its way towards

a full-fledged online mobile commerce service, the company commenced

offering services like balance updating, request for cheque book, details of last 5

transactions, request for statement etc. Corresponding services are also available for

the bank’s credit card customers. On the anvil are personal banking services, payment

services for utilities, travel and ticketing information etc.

Modus Operandi

The group has leveraged on a number of tie-ups to come up with its various offerings.

For its Internet banking offering the ICICI Bank uses Infinity from Infosys, for its

credit card business it uses Vision Plus from PaySys, USA. For WAP services the

tie-up with cellular service providers Orange and Airtel helps reach out to

these users, while the WAP technology is being implemented by the in-

house ICICI Infotech Services. To leverage the Net for its marketing

initiatives, ICICI Bank and Satyam Infoway have jointly set up a ".COM" company to

promote banking products on the Net. The bank has also entered into agreements with

leading corporates like BPL, Rediff.com, Usha Martin and Tata

Communications for B-to-C solutions in a bid to further strengthen its

53 | P a g e
Internet banking product offering and services. Payment systems are

perhaps the bane of any financial services company looking to move

online. Security and privacy are issues that every bank looking to move online is

grappling with. The ICICI Group has come up with its own answer to the problem.

ICICI joined hands with a consortium led by Compaq to take the lead in

offering a solution to the Indian e-commerce community. This consortium

offers a B2B and B2C e-commerce payment gateway within India. The B2C payment

gateway will help the Internet shopper, the web merchant and the banks to engage in

e-commerce, while the B2B payment gateway will facilitate virtual transactions in the

corporate world. CRM has been envisioned by the bank to support its goals in sales,

customer service, and analytics. Already, about 30.40% of the bank’s home loans are

cross-sold to existing customers. Similar ratios have also been reported in the sale of

insurance policies. Ratios of about 50.60% have been seen out of the credit cards and

personal loans business. The bank’s stated intention is to take these ratios to as high as

60.75%. ICICI Bank states that these high levels of relationship maximization are

made possible by how its CRM system is able to "know and understand the customer

better”, which customer is most suitable for what kind of product and at what point in

time.

In the area of service, the bank receives as many as 150,000 customer requests per

day, a challenge not only to channel capacity but also to how the bank is able to

ensure that each request is recorded, tracked, and resolved. Last, customer analytics

have been used to support various strategic decisions of the bank. Recent strategic

decisions of note are several anti-attrition programs, the intended attrition of

54 | P a g e
unprofitable customers, the imposition of fees, and various customer segment tactical

initiatives.

ICICI Bank’s CRM capability is built on a “Teradata” data warehouse that integrates

data from multiple sources, including the Oracle database and various flat files. The

system provides users with information about each customer’s checking accounts,

fixed deposits, credit cards, and other financial information. The bank has taken on the

end-to-end proposition of SAS for enterprise intelligence, which offers a credible

integrated approach to analytics, including data detection, data cleansing, data

preparation, event detection, reporting and business intelligence, and

campaign analysis. The bank estimates that it is able to track more than

1,200 parameters concerning demographics, transactions made, channel usage,

and product relationships. Through Behavior Explorer and views, business users

develop customer profiles and run ad hoc queries. Analysts then use the

information to guide product development and marketing campaigns that are

intended to address each individual’s total requirements, instead of just

pushing a product. The success of cross-selling to existing customers has also been

enabled by the bank’s growing capabilities in lead management. The home loans

business unit, for example, has built a lead management system rolled out to about

700 users. The system is able to allocate leads, schedule meetings, provide a

record of all interactions with the customer, and give reminders for customer

follow-ups. A lead generation tool has also been developed in-house to capture and

route Product applications made over mobile phones.

55 | P a g e
CRM working of ICICI BANK

CRM, according to ICICI consists of following approaches:

[A] Getting personalized information on customers.

[B] What is the value of the relationship?

[C] Customized offerings to the customers

[D] Converting a prospective customer into a true customer.

[A] GETTING PERSONALIZED INFORMATION ON CUSTOMERS

The bank collects all the information about the customers for processing. ICICI bank

has mainly 4 service offerings viz: loan account, saving account, current account and

fixed deposits. Moreover, the bank has many customers in each category. So, they

collect the data on one server and thus the company gets the personalized

information on each customer by asking them to fill the information in

customer application form.

[B] WHAT IS THE VALUE OF THE RELATIONSHIP?

After the collection of the personalized information on every customer, the department

checks out the value of the relationship with each and every customer. Later, they

decide how to approach the customer for knowing what his needs and wants are?

After this is done, the company offers him the customized product.

[C] CUSTOMIZED OFFERINGS TO THE CUSTOMER

The step which comes after deciding the value of the customer is that the company

offers the person the customized product. Moreover, they also practice a concept

called cross- selling over here. Cross – selling refers to offering another product from

56 | P a g e
the service offering of the bank to the customer which he has not gone for.

[D] CONVERTING A PROSPECTIVE CUSTOMER INTO A TRUE

CUSTOMER.

The last approach of CRM according to ICICI bank is that they try to convert the

prospective customer into a true customer. Right from the moment the inquiry comes,

they follow- up the customer and then make him to come to the bank

occasionally and then regularly.

GETTING PERSONALIZED INFORMATION ON CUSTOMERS

WHAT IS THE VALUE OF THE RELATIONSHIP?

CUSTOMIZED OFFERINGS TO THE CUSTOMER

CONVERTING PROSPECTIVE CUSTOMER

INTO A TRUE CUSTOMER.

The processes for delivering CRM-The tools and the processes are as follow –

• Customer application form

• Centralized software where the whole data is collected.

• Wide range of offering

• Cross – selling and

• Feedback forms

Customer application forms

Bank collects all the data from customer application form and gets the personalized

57 | P a g e
information to know which product to offer to which customer. This process helps in

collecting the data and knowing what the customer wants.

Centralized software where the whole data is collected

The data collected through customer application forms is available at one server and

can be accessed anytime, anywhere. So, this helps in the further process of customized

offerings and cross –selling.

Wide range of offering

After collecting the data from the customer, team decides what product

to offer to which customer. In case the bank recognizes you as a

valuable customer then is offers a more customized service.

Cross-selling

It refers to offering another product from the service offering of the bank to the

customer which he has not gone for. For example, if customer has savings account

with the bank then they offer him a insurance, fixed deposits etc. This depends on the

value of the customer to the bank. Cross selling is not offered to every customer. It

depends on how loyal the customer is to the bank. The more business he gives us, the

more are his chances of being special services offered.

Feedback forms

The bank distributes feedback forms at all its branches. The customer feedbacks on

the service, technology used, employee behavior and promptness in solving

customer’s problems, are taken and they are analyzed.

DIFFERENT CHANNELS FOR ACCESS SERVICES

Bank Branch ATM Phone Banking

58 | P a g e
Internet Banking

Insta Banking

Mobile Banking

Call Centre

BANK BRANCH

We can find a host of ICICI retail products at our widespread Bank

Branch network-Bank Accounts, Credit and Debit cards, Bonds, Demat Accounts,

Loans against Shares, etc.

ATM NETWORKS

Make balance enquiries

Make cash withdrawals

Free access to all ATMs

Trilingual ATMs

Payee name available on the Mini statement.

Mini statement shows last 10§ transactions

Ledger Balance available in Mini§ statement.

PHONE BANKING

24 hour manned Customer Care Center

Interactive Voice Response (IVR) facility available

Bill pay requests

Stop payment request

Balance enquiries

Give standing instructions for payments

59 | P a g e
Open a Fixed Deposit

Dial – a – draft

INTERNET BANKING

Payment of Utility Bills-electricity, phone etc.

Online Railway ticket booking

3-in-1 Demat Account

Inter Bank funds transfer (available in select cities)

Third party transfers

Credit Card bill payments

Enable mobile banking alerts

Importance of Internet Banking for customers

1) Bill payments: We can pay our bills like electricity, telephone, gas

etc, mobile phone bills and insurance premium bills etc online, or

through phone banking. Just log on to icicibank.Com or call the phone banking

number to do the same.

2) Check the status of the payments made

3) Query on all the bill payments made by us

4) The bill pay service is absolutely free of cost.

Mobile Banking

ICICI bank mobile banking enables us to bank while being on the move.

ICICI bank mobile banking can be divided into two broad categories of

facilities:

60 | P a g e
  Alert facility: ICICI bank mobile banking alerts facility keeps us informed

about the significant transactions in your accounts. It keeps us updated

wherever we go.

 Request facility: ICICI bank mobile banking requests facility enables us to

query for our account balance.

INSTA-BANKING

ICICI Bank’s “Insta Banking” enables us to conduct banking transactions anytime

from anywhere. You can avail of this anywhere-Anytime banking service through our

24-hour channels like ATM, Internet Banking, Instant Voice Response (IVR) Banking

and Mobile Banking, and from 8 a.m. to 8 p.m. These unique and user-friendly

channels have brought banking services to your fingertips. From balance enquiry

to checking cheque status to ordering a new cheque book, you can

communicate with ICICI Bank from the comfort of your home or in the middle of a

busy day at the office.

Call center is a cheaper channel than the branch, and often it is more

convenient for the customer. The ability to serve across all product categories from

a single location has enabled the bank to provide a level of service qualitatively

superior to its competitors, and this is offered as a complementary extension of the

branch capabilities. The relationship between the branches and the call center is very

good, and the branches are discovering how to focus their efforts on more rewarding

service relationships.

61 | P a g e
HDFC and CRM

HDFC Bank is making all possibilities come true for its customers. The bank

offers targeted messaging and other customized services using NCR’s 'Aptra

eMarketing’ software. The bank runs one-to-one (customized) and one-to-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, plans their campaigns better after being equipped with a thorough data repository

in the data warehouse. 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 regular screens. HDFC bank with a daily

turnover of 300 transactions per day per ATM, which adds up to about one million

62 | P a g e
transactions per day. As part of the first phase, HDFC Bank has made its ATMs across

Pune, Nashik and Ahmednagar faster by allowing customers to save their 'favourite

transactions’’ on ATMs. In fact, approximately 25 percent of Pune-based customers

have already used the 'favorite transaction' feature. HDFC is globally the first bank to

use the entire suite of offerings from Aptra eMarketing; it has deployed everything

except the call center suite. They have been powered by the data warehousing, data

mining, modeling and analytics abilities and have structured data in the CRM to

implement this software. The major benefits from the implementation is saving about

40 percent of the transaction time at the ATMs, ability to personalize

communication via self-service channels enabling active engagement with

the customer, which further enhances the ability of the CRM for analytics.

HDFC has revamped its corporate website in line with its communication philosophy.

The new improved, interactive, and user-friendly website is in sync with its need-

based communication strategy of helping individuals through their decision

of selecting the right plans that fit their needs.

 Protection: Need for a sound income protection in case of

unfortunate demise of an individual

 Investment: Need to ensure long-term real growth of an individual’s money

 Saving: Need to save for the milestones and protect an individual’s savings too

 Retirement: Need to save for a comfortable life post retirement

The new improved website leverages to educate customers in choosing the right. The

website is designed to provide an enhanced user experience to our existing

as well as prospective customers through simple navigation, faster access,

63 | P a g e
and rich content and enhanced utility as a service delivery tool. The objective of their

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.

The other salient features of the website are:

 Caters to all types of Internet users - advanced, moderate and new users

 Faster and convenient navigation (e.g. no need to use 'back page button;'

access to relevant and important links available on every web page)

 Key information at your fingertips. e.g. structured flow of key product information

and their features

 Enhanced interactivity through user interaction and involvement (tools and

calculators)

 Modular structure making the website 'future ready' with flexibility to

accommodate restructuring and additional content in future

 Uses flash and other advanced software to provide a better surfing experience to

the user, but through its intelligence moves to a classic mode if the user does not

have the requisite software to view the same.

 Compatible with all browser s i.e. Internet Explorer 6 and above, Firefox Mozilla,

Safari, Opera and Google Chrome.

 And compliant with W3C.

For HDFC, the CRM activities span three segments: Back-office, which enables all

transactions. For instance, a transfer of funds will involve recording the transfer

64 | P a g e
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.

That is, 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. PC-based corporate banking lets authorized personnel in corporates open letters

of credit or pays suppliers and integrates 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. For cash management, they use a package from a

Pune company called CashTech. There Depository systems run on software provided

by Mumbai-based Kalpataru. For loans, that uses 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 (the E10000 from Sun)

.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 (leased lines from the DoT). 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

65 | P a g e
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 SAN

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 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 transfer facilities to its

customers. Multi-branch access is also provided to retail customers through

the branch network and ATMs. In terms of software, the corporate banking business is

supported by Flex cube, while the retail banking business by Fin ware, both from i-

flex Solutions. The core banking software is running on both IBM AIX and SUN

Solaris. The BI is running on HP servers. It has various other banking applications on

Microsoft and Solaris servers. 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.

They have roughly more than 150 TB of storage on Hitachi technology. We have our

production servers running on enterprise storage and our entire test and development

servers on modular storage. Every server in the organization had its own

66 | P a g e
direct attached storage. This led to distributed storage upgrades and inefficient

use of storage.. The organization has ordered around 75 TB of enterprise class storage

and about 30 TB of modular and SATA Storage for use by applications due to growth

in the business and addition of new applications to support existing and new business

areas. HDFC bank is using all ERP, CRM with BI, OLTP/RDBMS, e-mail from

Lotus, core banking, treasury management etc.; the complete capacity with production

and test development is more than 150 TB.

HDFC Bank's customer philosophy is based on four core values-operational

excellence, customer focus, product leadership, and people.

67 | P a g e
Interview
Rajat Rohan

Relationship Manager

(Chembur Branch)

HDFC

 What is your designation & role in this bank?

I am the Relationship manager for the Chembur branch of HDFC & my basic role

is to monitor and maintain customer relationships, and also to try and increase

these relations. I supervise all the customer interactions done by the employees &

also deal with the customers whenever required.

 How long have you been associated with HDFC?

I have been associated with this bank for the past 2 year, and since then I am

handling the post of relationship manager for this branch

 What CRM system does HDFC use?

HDFC uses an eCRM system called “CRMnext”

 Which company provides you this system?

Our CRM system is provided by WIPRO

 How does the system work?

The CRM system in this bank is very efficient & convenient & makes tracking the

customer very easy. CRMnext has information about all the current customers,

their financial history, personal details, & also possible leads of customers. It has

68 | P a g e
 daily updates done by each and every employee on the possible business leads that

are formed daily. These leads are captured in the system and are classified

according to their status (Fresh/Old); Priority basis (Urgent/Normal); Product

Type, etc. every employee in the bank has to compulsorily update about any

interaction with their current customer or any business leads generated. Later on

these information is assessed by the supervisors and the leads are tracked. We also

monitor all custor interaction through this system and give reviews and

recommendations on them if needed. Our customers are categorized into groups

for easy monitoring & relationship management.

 How are the customers categorized for CRM in your bank?

Each and every customer is categorized according to their bank balance & the

relationship they maintain with our bank. There are mainly 4 categories formed by

the HDFC bank for this CRM system, they are:

1. Emperia

2. Preferred

3. Classic

4. Normal

with emperia being the category of customers with highest balance and slowly

moving down to other categories. There is a specific bank balance requirement for

each of these categories. There is a dedicated personal manager appointed for each

of the first 3 category customers. The basic duty of these managers is to grow these

customer’s relationships & as and when the customers grow they can me moved to

69 | P a g e
 the higher balance category. However there are only limited no. of customers to be

considered under each manager.

 What is the span of control for each of this category?

For emperia it is 125 customers, Preferred it is 200 customers and for Classic it is

50 customers.

However, If suppose any branch has 50 emperia customers & the span of control

for an emperia manager to be appointed is 125; then these customers will be

managed either by the preferred category’s manager of that branch or those 50

customers will be handled by the emperia category’s manager of some other

branch.

Similarly for every new A/C eg: current A/C opened in the bank, it is updated in

the system and immediately a manager is given the responsibility tp manage an d

supervise it. New customer form a new category

 Can you tell me something more about CRMnext system?

The CRMnext system also helps us classify customers as primary and secondary

A/C holders. It basically links various accounts of the same group together. It is a

mainly done family wise. Eg: if a customer is a preferred category customer and he

makes 5 of his family members join the same bank, all these 5 member’s accounts

will get linked to the preferred category’s member’s account & it is called a group.

It is then the duty of the CRM to try and increase the GRP (group product holding)

The System has provision for recording each and every interactions any employee

has with any customer or lead. Apart from all this the system also lets the

relationship manager to access pernal information of the customer to learn about

70 | P a g e
 his nature/ behavior before meeting nwith the customer.

Each and every employee has a separate username & password to login into the

CRMnext system and any work they do has to be captured into the system.

The system has place for all kind of information necessary for better relationship

management.

 What Future holds for CRM?

In my personal opinion, the CRM system is a must for any sector and it has a lot of

future prospect in all the sector of the economy. CRM will in turn lead to all the

businesses being performed more efficiently and high customization is possible

with its help, the standard of services can be improved and it will equally

contribute to develop the business and earn higher profits for it.

71 | P a g e
Questionnaire
G.N Khalsa College

Banking on Relationship: A comparative study of CRM in the

Indian Banking Sector

NAME:__________________________________________________ Age:____ Gender:__________

Address: _________________________________________________________________________

_________________________________________________________________________________

Mobile no.: _____________________ Email id: ______________________________

1. Are you a customer of

 ICICI
 HDFC
 Others

2. Which banking service channels do you most frequently use?

 ATM
 Branch
 Phone
 Internet

3. How often do you use the bank services per month?

 1-5 times
 6-10 times
 11-15 times
 Over 16 times

4. What kind of services do you usually use?

 Withdraw
 Deposit
 Transfer money
 Money exchange
 Update passbook, Cheque
 Others

5. Does the bank inform you about the new services / changes in the services on time?
 Yes
 No

72 | P a g e
 6. Please indicate the level of service provided by the bank

Sr. Very Good Fair Poor

No
Factors Good
RELIABILITY
1 The bank performs the services right at first time.
2 The bank provides the services at the time it promises to do so.
3 The bank has an easy to excess communication network &
means, for all its customers, irrespective of their location.
RESPONSIVENESS
1 Employee of the bank give you prompt service.
2 The behavior of the employees of the bank instills confidence in
customer.
3 Employees of the bank are consistently courteous with you.
4 The bank has employees who give you personal attention
EMPATHY
1 When you have a problem, the bank shows a sincere interest in
solving it.
2 Employees of the bank are always willing to help you.
3 Employees of the bank are never too busy to respond to your
requests.
4 The bank has guidance signs indicating as to which counters are
offering which services.
TANGIBLES
1 The bank has places to sit and wait.
2 The bank is neat and clean.
3 Employees of the bank are neat in appearance
ASSURANCE
1 The bank has cordial front ranking staff (security personnel etc.)
2 You feel safe while doing transaction with the bank.
3 Employees of the bank have the knowledge to answer your
requests.

7. Rate your overall satisfaction with services offered by your bank?

 Highly Satisfied
 Satisfied
 Somewhat satisfied
 Dissatisfied
 Highly dissatisfied
8. Do you think bank is maintaining good customer relations through its services?
 Yes
 No

73 | P a g e
Primary Research analysis
Q2. Which banking service channels do you most frequently use?

Banking Service channel ICICI HDFC

Percentage Number Percentage Number
Atm 56% 14 40.91% 9
Branch 32% 8 45.45% 10
Phone 4% 1 0% 0
Internet 8% 2 13.64% 3

ICICI

4%
8%

Atm
Branch
32% 56%
Phone
Internet

HDFC

14%

Atm
41%
Branch
Phone
Internet
45%

74 | P a g e
Q3. How often do you use the bank services per month?

No. of times bank service ICICI HDFC

used per month Percentage Number Percentage Number
1-5 times 55% 11 60% 12
6-10 times 40% 8 35% 7
11-15 times 0% 0 5% 1
over 16 times 5% 1 0% 0

ICICI

5%

1-5 times
6-10 times
40%
11-15 times
55%
over 16 times

HDFC

5%

1-5 times
35% 6-10 times
11-15 times
60% over 16 times

75 | P a g e
Q4. What kind of services do you usually use?

Kind of service usually ICICI HDFC

used Percentage Number Percentage Number
Withdraw 37.14% 13 42.42% 14
Deposit 31.43% 11 27.27% 9
Transfer money 2.86% 1 18.18% 6
Money Exchange 2.86% 1 0% 0
Update Passbook, Cheque 22.85% 8 12.12% 4
Others 2.86% 1 0% 0

ICICI
3% Withdraw

Deposit
23%
37% Transfer money

Money Exchange
3%
3% Update Passbook,
Cheque
31% Others

HDFC

12%
Withdraw
Deposit
18% 43%
Transfer money
Money Exchange
Update Passbook, Cheque
Others
27%

76 | P a g e
Q5. Does the bank inform you about the new services / changes in the services
on time?

Bank informs about new ICICI HDFC

services/changes Percentage Number Percentage Number
Yes 80% 16 75% 15
No 20% 4 25% 5

ICICI

20%

Yes No

80%

HDFC

25%
Yes

No

75%

77 | P a g e
Q6. Indicate the level at which the service is provided

Reliability
Reliability ICICI HDFC
Percentage Number Percentage Number
Very Good 15% 9 23.33% 14
Good 76.67% 46 68.33% 41
Fair 8.33% 5 8.33% 5
Poor 0% 0 0% 0

ICICI

8%
15%
Very Good
Good
Fair
Poor
77%

HDFC

8%
23% Very Good
Good
Fair
Poor
69%

78 | P a g e
Responsiveness

Responsiveness ICICI HDFC

Percentage Number Percentage Number
Very Good 26.25% 21 37.50% 30
Good 67.50% 54 46.25% 37
Fair 3.75% 3 16.25% 13
Poor 2.50% 2 0% 0

ICICI
4% 3%

26% Very Good

Good
Fair

68% Poor

HDFC

16%
Very Good
38%
Good
Fair

46% Poor

79 | P a g e
Empathy

Empathy ICICI HDFC

Percentage Number Percentage Number
Very Good 17.50% 14 21.25% 17
Good 56.25% 45 60% 48
Fair 25% 20 17.50% 14
Poor 1.25% 1 1.25% 1

ICICI
1%

18%
25% Very Good
Good
Fair
Poor
56%

HDFC
1%

18% 21%
Very Good
Good
Fair
Poor
60%

80 | P a g e
Tangibles

Tangibles ICICI HDFC

Percentage Number Percentage Number
Very Good 41.67% 25 40% 24
Good 50% 30 50% 30
Fair 5% 3 6.67% 4
Poor 3.33% 2 3.33% 2

ICICI
3%

5%
Very Good
42%
Good
Fair
50% Poor

HDFC
3%

7%

Very Good
40%
Good
Fair
50% Poor

81 | P a g e
Assurance

Assurance ICICI HDFC

Percentage Number Percentage Number
Very Good 35% 21 45% 27
Good 58.33% 35 45% 27
Fair 6.67% 4 8.33% 5
Poor 0% 0 1.67% 1

ICICI

7%

Very Good
35%
Good
Fair
58% Poor

HDFC
2%

8%

Very Good
45% Good
Fair
45% Poor

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Q7. Rate your overall satisfaction with services offered by your bank

Overall satisfaction ICICI HDFC

Percentage Number Percentage Number
Highly Satisfied 15% 3 25% 5
Satisfied 80% 16 75% 15
Somewhat Satisfied 5% 1 0% 0
Dissatisfied 0% 0 0% 0
Highly Dissatisfied 0% 0 0% 0

ICICI

5%
15%
Highly Satisfied
Satisfied
Somewhat Satisfied
Dissatisfied
Highly Dissatisfied
80%

HDFC

25% Highly Satisfied

Satisfied
Somewhat Satisfied
Dissatisfied
75% Highly Dissatisfied

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Q8. Do you think bank is maintaining good customer relations through is services?

Is Bank maintaining good ICICI HDFC

customer relations Percentage Number Percentage Number
Yes 95% 19 100% 20
No 5% 1 0% 0

ICICI

5%

Yes
No

95%

HDFC

Yes
No

100%

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Conclusion
It is rightly said by peter ducker,

"The purpose of business is to create and keep a customer."

Thus banks have understood that their job is not just confined to take and give money from/to

the customer but also to give prominent and efficient service at the same time.

The research helped me conclude that no bank can survive today in the corporate cannibalism

culture where customers can switch service as and when the like due to the large no. of

options (competitors).

Thus to survive in this cut throat struggle to stay on top CRM is the Need of the Day.

Also the comparative study made me understand the different CRM techniques used by the

bank and it was also noted that all banks have created a customer redressal forum to help

customers.

The comparative study between ICICI and HDFC regarding their CRM came to conclusion

that *** HDFC has a better technique and a efficient system to satisfy the customer needs and

wants. ***

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Bibliography
1. http://www.gatewayforindia.com/technology/CRM.htm

2. http://www.scribd.com/doc/24937655/Crm-at-Icici-Bank

3. http://www.mbaknol.com/management-case-studies/customer-relationship-

management-crm-in-banking-a-case-study-of-icici-bank/

4. http://shodhganga.inflibnet.ac.in/bitstream/10603/2350/11/11_chapter%205.pdf

5. http://www.ibimapublishing.com/journals/CIBIMA/volume5/v5n21.pdf

6. http://www.ijnpme.org/pdf%20files/vol4issue1/Customer%20Relationship%20Manage

ment%20Practices%20in%20Banking%20Industry.pdf

7. http://www.mahabank-

bancon2012.in/pdf/Customer%20Relationship%20Management%20in%20Banking-

32.pdf

8. http://www.dbr.shtr.org/v_2n1/dbrv2n1i.pdf

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