Project On:

Management Information System

In the Banking Sector

Submitted To:
Dr. Sheshadri Chatterjee

Submitted By:
Group 3 (PGDM-B)
 Harshit Jain 20PGDM091
Pramod Pawar 20PGDM105
S. Abhinand 20PGDM112
Shruti Goel 20PGDM117
Tony Augustine 20PGDM121

TABLE OF CONTENTS

1) Introduction to MIS………………………………………………………………….3
2) MIS in Banking Sector………………………………………………………………3
2.1) MIS for a bank…………………………………………………….....................3
2.2) MIS in the Indian Banking Infrastructure……...………….……………………4
2.3) Existing MIS in Indian Banks………………………………..…………………4
2.4) MIS Cells and Model in banks…………………………………………………5
2.5) Operational control by MIS…………………………………………………….6
2.6) Use of Information for Decision Making………………………………………6
3) CRM…………………………………………………………………………………6
3.1) Introduction……………………………………………………………………..6
3.2) CRM in Bank……………………………………………………………………6
3.3) Types of CRM…………………………………………………………………..6
3.4) Benefits / Opportunities of adopting CRM……………………………………..7
3.5) Challenges in implementing CRM………………………………………...……7
3.6) CRM in Banking: Indian scenario………………………………………………8
4) ERP in Banking Sector……………………………………………………………….8

2
 4.1) Challenges and needs of the banking sector…………………………………….8
4.2) IDBI Case………………………………………………………………………..9
4.3) Opportunities and advantages in implementing ERP……………………………10
4.4) Conclusion……………………………………………………………………….10
5) References…………………………………………………………………………….10

1. MIS
A Management Information System (MIS) is a bunch of consolidated procedures that accumulate
and deliver reliable, meaningful, and appropriately coordinated information that upholds an
organization's decision-making process. To summarize, it is a gathering of processes through
which information is obtained, arranged, and exhibited in a valuable route to make decisions.
These frameworks' principal objective is to put together all information gathered from each level
of the organization, sum up it, and present it to improve the choices being made to expand the
organization's benefit efficiency.

2. MIS in Banking Sector

A bank is perceived as an institution where financial activities, such as checking/reserve funds
and giving credit to the clients, are provided. The extent of this help in this day and age is
extended to a "Financial Services Super Shoppe" where the banks have become an instrument in
giving monetary help to specific exercises as an approach or by guideline or meeting human's
financial commitments. The MIS in the banking industry spins around this angle. The
accompanying focuses ought to be dealt with while planning an MIS for a bank:

i. Customer information base: The service expectations and insights rotate around the
accompanying variables: Customer, people, organization, establishments; Operator,
representative, the official of the association.
ii. Service to the account holders: The MIS should give the following reports to the
administration: The dormant accounts; The account had a balance more than or less than
specified amounts; The account was going down under the minimum balance required etc.
iii. Service for Business Advancements: The MIS should focus on information assortment
from different sources to break down and close the future corporate methodology. Such data
will help the financier converse with the client to acquire business for the Bank.

3
iv. Index Monitoring Framework: One more element of the MIS is to screen the assortment of
files and proportions identified with banking tasks, interior to the financial business. A
portion of these proportions satisfy the legitimate necessities like the Cash Reserve Ratio
(CRR)/ Statutory Liquidity Ratio (SLR); some meet the arrangement needs like the need area
proportion to add up to signs of progress.
v. Human Resources Update:. The MIS ought to recognize such requirements and help the
administration plan, instructional classes, and representatives improve their banking and
financial world insight

2.1 MIS for a Bank

1) Input Formats. 2) Process. 3) Output Formats. 4) Decision Maker

Out of these four parts, it is only the process part where either the banks have a manual form of
processing or few banks have introduced computers. The organization set of MIS in credit
management, as well as the information flow for decision making, was found similar to the
functioning of MIS cell as a whole for the Bank; therefore, it was concluded that complete
revamping of the whole MIS in banks is desirable rather than restricting to credit management
only.

2.2 MIS in the Indian Banking Infrastructure

Since nationalization in 1969, central commercial banks in India had experienced a series of
technological inventions. The banking industry in India has grown in geometric progression in
the past two decades. This has been accompanied by explosive growth in terms of information
and transactions. This information explosion has generated problems like multiplying statistical
returns, repetition of information, time lags between collecting vital data and presentation for
decision-making, and increasing delays. Hence, the Reserve Bank of India has set up various
working groups and committees to study these problems and evolve guidelines to aid
information systems. Appropriate data preservation, selective information categorization, and
integrated communication network were some of the present MIS System's objectives.

2.3 Existing MIS in Indian Banks

The need for effective MIS is of paramount concern to any organization. Indian Banking which
has been expanding in its size and variety of business, needs very effective MIS for its planning,
controlling, monitoring, and operational functions. Organizational Structure Indian Banks are
organizationally structured in a pyramid form. At the apex, the level is the
Corporate/Central/Head Office, with branches being at the pyramid's base. Depending on the
number of branches, two/three control offices are provided below the Corporate Office. Several
Regional Offices are provided for a typical structure, each controlling 30-40 branches. 3-4
regions are put under a zonal office, which reports to Central Office. The job roles of Regional

4
and Zonal Officers are different. Regional Officers essentially perform functions of Control and
Monitoring. At the zonal level, the focus shifts to the planning process and achievement of
corporate goals.

(The organizational structure of banks)

2.4 MIS Cells and MIS Model in Banks

The current MIS setup in banks is that almost all the banks have MIS cell at Regional Office,
Zonal Office, and a Central Office department. MIS cell functions at each level are the same, i.e.,
MIS cell gathers the information from lower offices, compiles it, and supplies it to higher offices.
The frequency of information flow is measured in terms of submitting the statements. A
comprehensive analysis of present MIS in banks is carried out with the data of two nationalized
banks. These transactions are accumulated into batches at the higher controlling offices, and the
batches are processed periodically. Before computerization, the processing of this accumulated
information was done manually. After introducing computers in banks in the '80s, the same is
carried over with computers' help. The batch processing model of MIS adopted by banks is again

5
of two types. Few banks have followed the sequential access files approach, while few have used
direct access files for data processing.

(MIS Cells and MIS model in Banks)

Central Office MIS Computers are Installed at this level in most banks. The process used at
Department present is that first data is collected in manual reports from down the level
and then keyed into the computer, and finally, reports are printed

Zonal Office MIS Similarly, computers are installed at this level, too, in most banks. At
Department present, the process is that first data is collected in manual reports from
down the level and then keyed into the computer, and finally, reports are
printed.

Regional Office MIS Many banks have not yet installed computers at this level, and the report
Department printing or data processing is done manually. Otherwise, the process of
using computers for MIS is the same as used at higher levels.

2.5 Operational control by MIS

The second feature of the MIS model in banks is that the operational control and monitoring
functions are missing, whereas MIS's strategic function is emphasized. None of the banks has
MIS cells at the branch level, though voluminous data is gathered and processed. In the absence
of an MIS cell at a branch level, information is scattered at different places in the form of ledgers
and files. To retrieve a tiny bit of information does take much time. As the MIS cell exists at the
higher controlling offices, the data collected is used more for planning and budgeting exercises.
Thus, under the present MIS model in banks, it can be concluded that MIS's strategic function is
missing, and control and monitoring are little emphasized.

2.6 Use of Information for Decision Making

The use of returns submitted by the area office to the higher offices is analyzed to study the
match between the Decision making and the information presented. The scrutiny of the returns
and their use was discussed with a few concerned functional heads/decision-makers of the
nationalized banks. The study revealed that many of the returns are not being put to any use. It
was also revealed that the figures included in returns are used more for planning and budgeting
exercise at the year-end.

There is also no strict follow-up for the submission of returns. Even if they are submitted, their
usage Is taken only for planning and not for day-to-day control and monitoring, and operational
exercise. It Is also observed that Despite the regular submission of returns, the bulk of the
information is asked through an ad-hoc Information channel, resulting in enormous duplication
of information.

6
3. CRM

3.1 Introduction to CRM

CRM stands for customer relationship management. It is a technique for building, maintaining,
and improving solid and long-term customer relationships. Customer relationship management
(CRM) is a customer-centric methodology focused on customer insight. Its ultimate goal is to
provide personalized service to consumers as distinct individuals by identifying and recognizing
their unique desires, interests, and behaviors.

3.2 CRM in Banking Sector

CRM allows companies to use technology and HR to gain insight into consumer actions and
respect them. Consumer support is improved, call centers are efficient, cross-selling goods are
successful, salespeople can close deals quicker, marketing and sales processes are simplified,
new customers are discovered, and customer profits increase. Banks must investigate all of the
various ways customer information enters a company, where and how it is processed, and its use.

3.3 Types of CRM

Broadly we can see three types of CRM in banks:

I. Operation CRM: CRM software packages are used to monitor and coordinate inbound
and outbound communications with consumers, marketing campaigns, and call center
management. Frontline processes in sales, marketing, and customer care are supported by
operational CRM, which automates communications and customer interactions.
II. Analytical CRM: It all comes down to analyzing consumer data to help meet marketing
and customer service goals and deliver the right message to the right customer at the right
time through the right channel. It entails using data analysis to derive information to
improve customer relationships.
III. Collaborative CRM: With various communication and interactive networks, these
systems allow customers to conduct services independently. It connects individuals,
processes, and data, allowing data and information to be adequately channeled to bank
staff for strategic decision-making and improved informed customer service and support.

3.4 Benefits / Opportunities of adopting CRM

Both consumers and the service providers are equally benefited from CRM. Banks get a tool for
controlling and automating while clients appreciate a more personalized approach and enjoy the
attitude. CRM is no longer optional for banks but crucial for its success as it allows banks to link
with their customers and build a long-lasting relationship, helping them set apart the competition.

I. Improving Customer Profile intelligence: A banking CRM can integrate with other
banking software programs to provide a single view of every customer account. This
allows for gaining deeper insights into their preferences so that the banks can leverage the
data to align certain products to their financial goals.

7
 II. Better Customer Service: CRM can help map the services to customer preference and
requirements, thus enabling more excellent customer support service. Customers want
quick and decisive action on their queries and problems. Every engagement a customer
has while solving his issues is personalized with the help of CRM.
III. Increased Customer Loyalty/retention: Gaining a new customer is a critical job for
banks but retaining the existing customer is crucial in this competitive sector. Retention
can be accomplished through enhanced customer satisfaction, and loyalty and CRM can
convert a mere account holder into a loyal one.
IV. Increased Productivity: Nearly 80 percent of all marketing leads are never converted to
sales. So, the sales and marketing force employed will be high, and thus the banking
industry is usually administrative-heavy. CRMs help to cut costs by minimizing repetitive
administrative tasks through streamlined proposals.

3.5 Challenges in implementing CRM

I. Data security: The biggest challenge for banks looking to adopt CRM concerns data
security and controlled access. Information security and access control are critical, and
thus the industry is susceptible to data security. Modern CRM platform providers are well
aware of these concerns and provide security measures. Encrypted transmissions, data
center backups, and session timeouts are few ways security is ensured in cloud storage.
II. Integration with Other Banking Systems: Integrating a CRM with other banking
systems is a complex task. Most of the banking organization has IT infrastructure and
tech stack that might be complicated to interfere with. Most software might be outdated
and was not built to work together with the modern CRM systems. Hence banks can face
integrating new solutions with the existing ones without any data loss and system
failures.

3.6 CRM in Banking: Indian scenario

While all Indian banks recognize and practice the importance of Relationship Marketing
practices such as optimizing and retaining customer relationships across various customer
segments, technology-enabled CRM is still in its early stages. Different banks are at various
CRM adoption stages and implementation, with most of them still in the early stages.
Operational CRM is often seen in common, but collaborative CRM is there in internet banking,
mobile banking, ATM functions, POS devices, and initiatives like passbook printing machines,
helping the customers update their passbooks themselves. While some banks use analytical
CRM, it is not used by all. A few examples of Indian banks using CRM are also given to provide
a better CRM image in Indian banking.

a) Yes, Bank has created YCCRM (Yes Bank Collaborative CRM), including discussion
boards and templates, among other features. This enables all concerned staff members to
share relevant customer information to design new items, provide constructive service,
and provide knowledgeable customer handling, resulting in better service. The use of
CRM software helps employees and customers to maximize customer satisfaction.
b) The Bank of Maharashtra has built in-house software that produces and updates various
reports based on comprehensive customer data and distributes them to branches. These

8
 reports are used to improve customer understanding, support, and service by providing all
stakeholders.
c) Punjab National Bank has implemented Prospect Management, Lead Management,
Activity Management, Product Management, Complaint Management, and Business
Intelligence Reporting as part of CRM. Increased customer base, cross-selling, sales force
optimization, effective lead management, and higher efficiency are the payoffs

4. ERP
Few professional fields have stayed out of the purview of Information Technology. The banking
industry is no exception. Banking covers activities like lending, deposits, and money
transmissions. Most of the banks have extensive branch networks. They need to maintain secrecy
about customer affairs and follow regulations.
The Banking Sector needs ERP due to their extensive data. ERP provides integration among
various modules and integrates information, users, and various processes. It provides solutions
for cash accounting, security of cash, cash management, and payment processing. It also helps in
analyzing financial conditions, account management, and preparation of financial reports and
statements.

4.1 Challenges and needs of the banking sector

The banking sector faces tough competition, with many private banks offering competitive
services, demanding rapid change. Moreover, regulatory and legal requirements want the
information to be accurate and timely. Transparency is also a common requirement to ensure the
trust of customers. Successful banks are flexible and effective in this aspect a lot more. To
achieve these goals, banks should evaluate an IT investment to provide fast returns and reduce
high operating costs. IT structures should be flexible and allow speedy adjustments in the
business procedures—efficient business procedures and IT structures that are comparatively less
complex. Employees should be able to use various tools, solutions, and personalized data from
anywhere and anytime. ERP solutions should also provide secure access and be readily available
to all the organization and the customers, partners, and vendors.

4.2 IDBI Case

IDBI decided to restructure in 2008 for various customer-centric business segments. The
restructuring was done to streamline business processes and improve the quality of customer
service. A robust system was needed to make it easy for all managers to monitor revenue from
each branch and their products, increasing profitability and sustaining growth.
Problems Before ERP:
a. IDBI could not assess each segment of the business's profitability at different levels, such
as customer and branch levels.
b. It was important for IDBI to assess their business units & products' performance for
future growth, which was impossible.

IDBI Selected Oracle and implemented in 2 phases.

9
The Performance Management System was launched in 2008, which included Oracle modules
as:

I. Transfer Pricing: With the help of oracle transfer pricing, they can measure NII
contribution from assets and liabilities. NII contributions & assets and liabilities
dissection are also possible for staff.
II. Profitability Manager: IDBI used Oracle profitability manager to distribute the business
and other branches' costs related to the bank line.
III. Financial Services & Profitability Analytics: With Financial Services & Profitability
Analytics information related to profitability, it is now possible to deliver over the
internet.

These systems have enabled the Bank to analyze the individual business unit's performance
better and take necessary action if the desired profits are not achieved. Oracle Consulting was
engaged in 2009 to deploy:

I. Oracle Risk Manager: IDBI Bank used Oracle Risk Manager to assess the risk related to
liquidity and interest rate calculated on a day-to-day basis. It helped the IDBI to choose
the best place to allocate their funds.
II. Oracle Hyperion Planning: IDBI used Oracle Hyperion Planning, which was related to
the profit and loss models and with the balance sheet, to create budgets and rolling
forecasts. Sales objectives can be tailored to each branch and each product.

4.3 Opportunities and advantages in implementing ERP

Oracle's solutions and previous experience in implementing ERP at Oracle's other top banks. The
solutions offered by Oracle's various modules are appropriate from their business perspective.
Oracle's implementation team, previous experience, Oracle systems flexibility, and the Bank's
cost allocation principles convinced IDBI to re-engage Oracle based on their knowledge and
skills. Due to effective coordination between the dedicated resources and the Oracle
implementation team, the aggressive project deadline was met, and the project was completed.
Experience has helped the Oracle team in implementation, which has led to better testing,
integration, and data extraction. IDBI has made significant improvements following new
solutions and restructuring. The Bank can now handle around 3 lakh transactions.

4.4 Conclusion
Over the years, the implementation of ERP has helped the banking sector tremendously. The
consolidation of data has helped banks analyze financial status, account management, and
prepare financial reports and statements. It provides solutions for many issues such as cash
management, cash security, cash accounting, and payment processing. In current conditions,
performing core banking activities and increasing customer service quality is a must for a bank,
which can be possible by integrating its various components and avoiding data redundancy.

5. References
10
 UK Essays. (2017, June 2). Importance of ERP in the Banking Sector. UKEssays.Com.
https://www.ukessays.com/essays/information-technology/significance-of-erp-in-the-
banking-sector-information-technology-essay.php

George, R. R. (2020, November 24). 5 Benefits of CRM in Banking - Ranjit Rajan George.
Medium. https://crmnut.medium.com/5-benefits-of-crm-in-banking-5c9c7522aa51

Management Information | How Banks Work. (n.d.). Medium.

https://howbankswork.com/banking-framework/management-information/

Role of Management Information System in the Industry. (2018).

https://www.geektonight.com/what-is-mis/

11