Athangarajah THANGARAJAH 090132670

An Investigation into the Benefits and Challenges in adopting
and using CRM in the Banking Sector
A study submitted in partial fulfilment

of the requirements for the degree of
Master of Science in Information Systems Management
at
THE UNIVERSITY OF SHEFFIELD
by
Arun Prasad Thangarajah
September 2010
Abstract
Background
There is explicit knowledge about CRM and different authors have different perspectives of
what CRM is. There have been a number of researches which shows the importance of
CRM. CRM is considered very important to service sectors.
Aims
This study is an investigation into the benefits and challenges in adopting and using
CRM in the banking sector. The aim of the study is to investigate into the benefits and
challenges the banking industry would face. The aim of this research would be to find which
functions are useful to the bank, why the banks adopted CRM and the benefits and
challenges a bank would face in particular.
Methods
The research question was looked at and a checklist prepared consisting of a number of
questions. Fifteen case studies were looked at and seven appropriate case studies were
selected and analysed according to the checklist questions. The analysis provided the answer
to the main question.
Results
The results showed that the most useful function for the banking sector would be the
operational service automation and the customer analysis function. The banks implemented
CRM in order to increase their competitiveness and to provide efficient and better services
to customers in order to retain them. The benefits the banks had were efficiency in providing
services to customer, reduced costs, better understanding of the customer and better
targeting of customers. The banks were able to strengthen their relationships with the
customers too. The customer enjoyed convenience. The main challenges were the
employees‘ resistance to change, choosing the appropriate functions to implement, and the
change the organisational structure. The implementation of CRM needs good consultants
too.
Conclusions
It is concluded that there were specific functions which are not useful to the banking sector
and that the benefits and challenges were the same as other industries. There is room for
more research as most case studies did not mention much about the problems in using CRM
and CRM is always evolving which means there could always be new CRM innovations,
therefore there is room for more research in this area.
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Arun Prasad Thangarajah MSc
ACKNOWLEDGEMENT
I acknowledge with great appreciation to those who helped me carry out this project and the
support given to me.
Firstly a big thank you to Dr. G.C. Alex Peng as this project would not have been carried out
without his encouragement and assistance. He was very generous in spending his valuable
time on assisting me and giving me advice on this project.
I would like to thank the Information Systems Department and The University Of Sheffield
for providing me this opportunity to learn and for providing me with the resources needed to
carry out this project.
I would like to thank my friends who stood by my side to cheer me up and encourage me
whenever I needed it the most.
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Table of Contents
1 Chapter One- Introduction ............................................................................................... 8
1.1 Introduction .............................................................................................................. 8
1.2 Introduction to CRM ................................................................................................ 8
1.3 Problem Statement ................................................................................................. 10
1.4 Research question and objectives .......................................................................... 11
1.5 Research Methodology .......................................................................................... 13
1.6 Structure of Dissertation ........................................................................................ 14
2 Chapter Two- Literature Review ................................................................................... 14
2.1 Introduction ............................................................................................................ 15
2.2 Introduction to CRM .............................................................................................. 15
2.3 What is CRM ......................................................................................................... 15
2.4 Evolution of CRM.................................................................................................. 19
2.5 CRM functions ....................................................................................................... 21
2.5.1 Strategic CRM ............................................................................................... 21
2.5.2 Operational CRM ........................................................................................... 21
2.5.3 Analytical CRM ............................................................................................. 23
2.5.4 Collaborative CRM ........................................................................................ 24
2.6 Benefits of CRM .................................................................................................... 25
2.7 Challenges in adopting CRM ................................................................................. 30
2.8 Summary ................................................................................................................ 38
3 Chapter Three- Methodology ......................................................................................... 39
3.1 Introduction ............................................................................................................ 39
3.2 Research methodology ........................................................................................... 39
3.3 Research Approach ................................................................................................ 40
3.4 Research Method ................................................................................................... 43
3.5 Research Design..................................................................................................... 44
3.6 Key stages .............................................................................................................. 45
3.6.1 Stage 1- Literature review .............................................................................. 45
3.6.2 Stage 2- checklist development ...................................................................... 47
3.6.3 Stage 3 - case studies ..................................................................................... 49
3.6.4 Stage 4 - Analysis .......................................................................................... 53
3.7 Limitations ............................................................................................................. 54
3.8 Summary ................................................................................................................ 55
4 Chapter Four- Findings and Data Analysis .................................................................... 56
4.1 Introduction ............................................................................................................ 56
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4.2 Analysis on Frontier Bank ..................................................................................... 56
4.2.1 Introduction .................................................................................................... 56
4.2.2 Question 1- What CRM functions are crucial for the Frontier Bank? ........... 56
4.2.3 Question 2- What benefits does CRM provide Banks? ................................. 58
4.2.4 Question 3- What are the challenges of adopting CRM? ............................... 60
4.2.5 Summary ........................................................................................................ 61
4.3 Analysis on Parish National Bank ......................................................................... 63
4.3.1 Introduction .................................................................................................... 63
4.3.2 Question 1- What CRM functions are crucial for the Banking sector? ......... 63
4.3.4 Question 3- What are the challenges in adopting and using CRM?............... 66
4.3.5 Summary ........................................................................................................ 68
4.4 Analysis on First European Bank........................................................................... 69
4.4.1 Introduction .................................................................................................... 69
4.4.4 Question 3- What are the challenges of adopting and using CRM? .............. 72
4.4.5 Summary ........................................................................................................ 74
4.5 Analysis on HSBC ................................................................................................. 75
4.5.1 Introduction .................................................................................................... 75
4.5.2 Question 1- What CRM functions are crucial for the Banking sector: .......... 75
4.5.5 Summary ........................................................................................................ 80
4.6 Analysis on Greek Bank ........................................................................................ 81
4.6.1 Introduction .................................................................................................... 81
4.6.4 Question 3- What are the challenges of adopting and using CRM? .............. 85
4.6.5 Summary ........................................................................................................ 86
4.7 Analysis on Bank of Tokyo Mitsubishi ................................................................. 87
4.7.1 Introduction .................................................................................................... 87
4.7.5 Summary ........................................................................................................ 92
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4.8 Analysis on Fine-Equity Bank ............................................................................... 93
4.8.1 Introduction .................................................................................................... 93
4.8.5 Summary ...................................................................................................... 100
4.9 Summary .............................................................................................................. 100
5 Chapter Five-Discussion .............................................................................................. 101
5.1 Question 1 ............................................................................................................ 101
5.2 Question 2 ............................................................................................................ 105
5.3 Question 3 ............................................................................................................ 113
6 Chapter Six- Conclusion .............................................................................................. 117
6.1 Introduction .......................................................................................................... 117
6.2 Conclusion ........................................................................................................... 117
6.3 Recommendations ................................................................................................ 118
6.4 Areas for further study ......................................................................................... 119
7 Reference ..................................................................................................................... 120
8 Appendix ...................................................................................................................... 125
Table of Figures
Figure 1- Classification of CRM Functionality ................................................................. 21

Figure 2: Analytical CRM functions .................................................................................. 24
Figure 3- Inductive Approach............................................................................................. 42
Figure 4:case study framework .......................................................................................... 45
Figure 5:- case study designs ............................................................................................... 50
Figure 6:- multiple case study design ................................................................................. 51
Figure 7:- Framework for this investigation ..................................................................... 54
Figure 8:- Benefits .............................................................................................................. 108
Figure 9:- Challenges ......................................................................................................... 113
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Tables
Table 1- Benefits of CRM .................................................................................................... 27

Table 2:- Advantages of e-CRM ......................................................................................... 30
Table 3:- Failure Reasons .................................................................................................... 37
Table 4:-Functions used by each bank ............................................................................. 101
Table 5:- What provoked the banks to implement CRM ............................................... 105
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1 Chapter One- Introduction
1.1 Introduction
The first chapter gives a brief idea of what the whole dissertation is about. Firstly an
introduction to Customer Relationship Management is given. This is done in
section 1.1. A general idea of what CRM is could be gained. The problem statement
is done in section 1.2. This is about why the whole dissertation is undertaken. The
research gap is explained here. The next section (1.3) discusses about the research
question and objectives of this investigation. The methodology used to investigate
the topic is explained in section 1.4. The final section in this chapter provides the
structure of the dissertation.
1.2 Introduction to CRM
There have been a number of questions on how to compete in the changing world. In
the past 20 to 30 years there was the question of which product market to compete
and of recently the question has shifted to which customer segment should a
company invest, divest or maintain. This brings in a strategy where the products are
offered to customers after understanding the needs and wants of the customer. The
business environment has been changing continuously from new technology to
changes in customer needs and wants.
To cope with the changing world there have been a number of strategies and
innovative technology proposed which have been used in the current world. In these
new strategies and technologies there is one which has gained a lot of prominence
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and has been highlighted as very important to overcome the competitiveness and the
changing needs of the customers. That is Customer Relationship Management
(CRM). The customer focussed strategy (CRM), has been aided by other trends in
the business world. These new trends are CRM technologies which help serve
individual customers with less cost, choice and customer sovereignty, literature
supporting one to one relationships with customers and moreover companies have
been adopting business processes where they can better respond to customer wants.
CRM has been used in many industries, especially industries which consist of a lot
of customer interaction. The Banking industry has been an industry where CRM has
been in use quite prominently. This is because of the need to communicate with
customers and win customers from their competitors. This requires strategy and
technology which would assist in effective communication between the banks and
the customers. There have been a number of examples of the use of CRM in Banks.
TowerGroup (2001) points out that National Australia Bank, Ltd (NAB) has invested
in CRM ten years ago and claim to have seen improvements in key customer
segments through CRM. CRM has been a strategy which was developed in NAB for
10 years and has allowed them to invest in ―relationship-fostering Technologies‖.
SAS mention that according to Meridien Research, in 2001, $6.8 billion is predicted
to be spent on CRM by financial institutions. This shows the importance given to
CRM by financial institutions such as banks.
The banking sector has been very competitive. Axson (1992) found that retail bank
staff increased by 26% and total bad debts provisions increased from £1.7 billion to
£12.6 billion, and this happened in UK between 1981 and 1990. In North America,
online and telephone banking has changed the customer behaviour since 1995 and
only 56% of US retail banking transactions were carried out in the branch and this
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number has been reducing. This suggests that the use of CRM has increased in banks
as CRM provides opportunities to reduce transactions carried out and ensures
efficiency, cost saving and opportunities to survive in a highly competitive market.
There are areas of research which has to be undertaken in order to understand the use
the CRM in banks.
1.3 Problem Statement
CRM has been used in the banking sector. Implementing CRM may be attractive to
banks and it may provide benefits. Edhelstein.H (2000), states that CRM assists
profitable interactions with customers and simultaneously making interactions
friendlier through individualization. According to Microsoft CRM is used to
―maximize the profitability of existing customer relationships while driving
efficiency improvements and cost savings‖.
However, there are many issues in the implementation and usage of CRM.
According to Dr. Griffin.T et al (2008), 70% of CRM fails in the implementation
phase even if the correct CRM has been chosen. Kim and Pan (2006) found that 65%
of the Information Systems implementation failed. It is necessary to comprehend that
a CRM software package is quite time consuming in installing into the system and
will not be ready to work immediately and that there are a number of difficulties and
challenges in achieving a successful CRM implementation and benefits. Successful
implementation needs technical support, organisational capabilities and will, to
achieve the long term goals.
SAS (2001) explains that organisations should consider certain business
requirements before adopting CRM. That is to ―create a Customer-Focused
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Organization and Infrastructure, Gain an Accurate Picture of Your Customer
Categories, Accurately Assess the Lifetime Value of Your Customers, Maximize the
Profitability of Each Customer Relationship, Understand How to Attract and Keep
Your Best Customers, Maximize Rate of Return on Marketing Campaigns‖ (SAS,
2001).
The above literature relate to CRM but lacks the in depth knowledge about CRM
usage in banks. That is the relevant benefits and issues of CRM in the banking
industry. There are many unanswered questions which are specific to the banking
industry. This research focuses on benefits to the bank and the customer and more
importantly the challenges which the banks and customers would face. The research
also looks at the various functions of CRM which could be used by the banking
sector.
1.4 Research question and objectives
Given the importance of CRM in the Banking sector we should study this further.
This is an investigation into the benefits and challenges in adopting and using
CRM in the banking sector. This study attempts to answer the Benefits and
challenges faced by the Banking sector in using CRM. This project looks into a
number of questions which would help answer the topic. That is
 What CRM functions are crucial for the banking sector?
 Why banks adopted CRM/what benefits does CRM provide banks?
 What are the challenges and difficulties in adopting and using CRM?
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What CRM functions are crucial for the Banking sector?
This research question is important because there have been cases where the specific
needs of the Company has not been fulfilled by the CRM function implemented.
That is CRM has not been interpreted correctly for its functions and according to
J.C.Melo (2004) 42% of purchased CRM systems are inoperative for been
interpreted as push-button software. Torggler. M (2009) states that there is diversity
of functions offered in the CRM software and due to this it becomes difficult to
select the appropriate software. He states that the software should be customized in
order to support the business processes. CRM functions involve aspects relating to
Sales, Marketing and many more. According to SAP (2003), there are a number of
functions, including sales and marketing, such as Service, Partner channel
management, Interaction centre, Web channel, Business communications
management, Real-time offer management and Trade promotion management. All
these functions may not be necessary for the Banking sector. Therefore it is
extremely important for Banks to choose and customize the CRM application in
order to effectively gain the benefits provided by the information system. The aim of
this research question is to identify the important CRM functions which would be
crucial to the Banking sector.
What provoked the Banks to adopt CRM and what benefits does CRM provide
Banks?
The objective of this question is to find why the banks adopted CRM? Were there
any specific reasons to adopt CRM? Adopting CRM has a number of benefits. The
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aim is to investigate what benefits CRM would provide to the banks and whether
they provide a return on investment.
What are the challenges and difficulties in adopting and using CRM?
As explained earlier there a number of factors which lead to failures of CRM in a
bank. This research question would lead to the aim of investigating the difficulties
and challenges in adopting and using CRM
In summary the objectives of this study could be put forward as follows.
 Conduct an extensive literature review on CRM.
 To create a checklist to answer the research question in different parts
 To explore which functions are useful to the banking sector
 Explore the benefits and reasons for the banking sector to adopt CRM
systems
 To explore the challenges and difficulties banks encounter when adopting
and using CRM.
1.5 Research Methodology
In order to answer the research question effectively the investigation was carried out
in an organised manner as follows. Firstly an in depth literature review about CRM
was undertaken. This was to understand the topic clearly since this investigation is
for a specific industry. The CRM functions available, the benefits and challenges
which other authors have investigated are looked into in this literature review. A set
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of questions (checklist) was created in order to answer the research question. This
checklist relates to different parts of the overall research question. These questions
were answered using a set of case studies. For this investigation seven case studies
were used. The case studies were chosen on the basis that the case studies answered
all the relevant questions. The answers to the checklist questions helped derive the
findings for the research questions.
1.6 Structure of Dissertation
Chapter 1-introduces the whole dissertation. It gives a briefing about CRM and the
problem statement. Mentions the research question and the objectives and a brief
description of how the research question is going to be answered.
Chapter 2- an in depth literature review about CRM is carried out. The work
undertaken on this topic by other authors is discussed.
Chapter 3- Discussion about the methodology. How the research question was
answered.
Chapter 4 – Finding from case studies are discussed. Using the checklist questions
all the case studies is analysed.
Chapter 5- Further discussion about the analysis of the case studies is undertaken.
Chapter 6- Conclusion on the research topic and further areas of study which could
be carried out.
2 Chapter Two- Literature Review
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2.1 Introduction
The following literature review explains various authors‘ perspectives on what CRM
is. The functions of CRM are explained and the benefits and challenges in using
CRM put forward by many authors are explained in this chapter. This chapter would
provide the reader with sufficient knowledge to comprehend the CRM concept and
would allow the reader to understand why this research has been undertaken.
2.2 Introduction to CRM
Customer Relationship Management (CRM) is a term used by companies in recent
times. There have been a number of attempts to capture customer information.
Feldman (1999) found that customer information was ―first collected by the
―frequent flier‖ programmes of the ―high-fare‖ airlines in an attempt to stop
defections to ―low-fare‖ carriers‖. It was also found that there was an increased
spending on CRM software and services. The Economist Intelligence Unit (EIU)
found that CRM was a focus for many organisations and this caused a change in the
way organisations operated. That is they changed from the traditional transaction
based and functional management approaches where customer relationship was
separated between departments. This shows that CRM has become a vital part of any
organisation.
2.3 What is CRM
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CRM could be explained as a strategy, technology or process by which customers
are retained and the customer information used to maximise profits. It is used to
build loyal customers and to retain business from them. CRM tries to achieve a
number of things. SAS explain that it tries to build stronger relationships and get
closer to those customers at every point of contact. SAS also say that CRM tries to
maximize a company‘s share of the customer‘s wallet.
To be successful in any economic situation the company should be agile and be able
to react to any changes in business environment and consumer behaviour. With the
competitiveness of the economy becoming stronger, finding new customers in any
industry is very precarious. Therefore the current focus has been shifted to
maximising the benefits with the existing customers. That is, providing high levels
of services to the existing customers to retain them. This is successfully done
through CRM.
CRM was instilled in the 1990‘s. Since then there have been many confusions and
different perspectives as to what exactly CRM is. IT companies such as Oracle
consider CRM as software and they market their CRM products as software. What
these IT companies consider CRM to be is the automation of marketing, selling, and
service functions of the business. Recently there is evidence that a number of
companies are spending billions of dollars on CRM technology. The term CRM
technology was introduced by one of the major players in the provision of CRM
technology, Siebel in 1993. Apart from CRM being a mere technological solution for
enhancing the relationships with customers, there is also the view that CRM is an
approach to managing the relationships with the customers and technology may or
16
may not be involved in this. In some companies CRM is just a technology which
helps to bridge sales and marketing functions in order to improve targeting efforts,
while some companies consider it as a tool developed for ―one to one customer
communication, a sole responsibility of sales/service, call centres, or marketing
departments‖ (Peppers and Rogers, 1999). Buttle, F, 2009 says that CRM is a
―business strategy that can be effectively executed through the appropriate business
process and technology management capabilities that best match to an organisation‘s
customer facing goals‖.
Customer Relationship Management (CRM) has been defined by a number of
authors. It means different things to different people (McKie, 2000). Couldwell 1998
defined it as ―a combination of business process and technology that seeks to
understand a company‘s customers from the perspective of who they are, what they
do, and what they are like‖. Another definition is that CRM is a business model that
aligns product and sales strategies with customer requirements and preferences
(Chaudhry). It is further explained by Anderson and Kerr (2002) as a way of doing
business that touches all areas. They explain that CRM is not just software of
information system which improves sales and marketing aspects of the business and
not just part of the customer service group. Moreover A narrow view of what CRM
is ―database marketing emphasizing the promotional aspects of marketing linked to
database efforts‖ (Bickert, 1992). It is used as a planning and scheduling tool and it
allows controlling the activities in an organisation. CRM helps to identify the
requirements and desires of the target customers. There is a view that CRM focuses
on customer retention through after marketing techniques. Raab, G et al (2008)
17
argues that CRM provides efficiency through aiding the firm to have a timely,
accurate and sustained feedback mechanism, which is required to anticipate the
future needs and desires of the customers.
CRM could be further explained by the four tenets by Kutner and Cripps (1997).
They mention that customer should be treated as important assets to the company
and that customer profitability varies. Not all customers provide a high profit to the
company. Customer tastes, price sensitiveness and so on varies, therefore they argue
that by understanding the customers, companies can modify their offering to them.
Cloudwell (1999) explains that it is a framework rather than a product. There have
been surveys undertaken which show that CRM was considered crucial in the
success of a company‘s future and that technology was considered an important
weapon that companies had (Fletcher, 1999).
CRM is supported by a lot of research and theories. Reicheld, and Teal (1996)
explains a number of reasons why loyal customers are more profitable. He argues
that customers do not become profitable unless they are sustained for one or more
years. This is due to the high customer acquisition costs at the early stages.
Customers buy more over time and companies provide the services to the customers
more efficiently. As mentioned earlier there has been a shift in the strategies adopted
by organisations. Traditionally they adopted a strategy where products were sold to
many customers as possible and of recently the trend is to provide a customer many
products and services as possible (Peppers and Rogers, 1999). Fletcher (2008) found
that CRM was a leading priority of business activities cited by Microsoft Dynamics
CRM (2009). And certain researchers have suggested that the most useful investment
for a business would be to investment in CRM. There has been a prediction that
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companies would spend $11 billion throughout the world on CRM but there have
been doubts on the successfulness of CRM.
2.4 Evolution of CRM
There were many developments in order to understand the customers of a company.
There had been databases created in order to store customer information such as
profiles, demographics, products purchased and other interests of customers. These
data were used by different people in the company and traditionally were not
converted into useful information. This shows that there have been attempts to
understand the customers for a long time and the concept which lies within CRM is
archaic. CRM recently has become successful with the change in trends. According
to Foss, B and Stone, M (2001 p. 4) there are two drivers of the evolution of CRM.
The first is that customers have become the management‘s priority. Customer
integration and customer retention has become the main focus of managers.
Strategies which involve the customers have been prioritised by managers and
believe that those strategies would help a company survive in the long run. Managers
have realised that customer loyalty is an important factor in a company‘s survival
and moreover CRM provides a company the edge of competitive advantage over
other companies. The second driver of the growth of CRM is the increase in internet
usage. That is e-business and the use of internet as a channel to communicate with its
customers and as a sales channel. There is less direct interaction between the
customers and the company. The customers do not directly communicate with the
company which restricts the amount of information about the customers gained by
the company. This has forced companies to find new ways to integrate its customers
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and find ways to gain customer information. Companies have started spending on IT
solutions to this problem. That is CRM technology.
The evolution of CRM has been gradual even though the concept has been quite
famous for a long time. Butler Group (2001) found a number of developments which
companies used in order to gain and make use of customer information. The first
system according to them was the Customer Information Systems (CIS). These
systems they claim were the ―first generation of CRM solutions‖. These were
developed by the companies themselves. However this had the drawback of
combining marketing and control functions to the loss of both. Then there was the
development of Customer Profitability Systems where a number of segmenting
criteria were used. However, this wasn‘t successful as at a point all segments looked
non profitable. Then there was contact management. There was the development of
Sales Force Automation and then Call Centres.
Payne, A argues that during the 1980‘s and 1990‘s traditional methods of marketing
such as the 4 P‘s were developed into a toolbox to understand and respond to players
outside the company. He mentions Philip Kotler‘s argument that if a company is to
compete successfully they must have stronger relationships with its stakeholders
where customers are included. CRM is said to be developed from a number of
principles such as marketing and is too important to be left to the marketing
department (Packard, D of Hewlett packard). This suggests that marketing should be
extended across the business enterprise. CRM is regarded as a response to this issue.
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2.5 CRM functions
There are a number of types of CRM which could be categorised as strategic,
operational, analytical and collaborative. Each of these is explained below.
2.5.1 Strategic CRM
This is where the organisations operations are changed in a more customer centric
manner. This is a more general function of CRM.
Figure 1- Classification of CRM Functionality
Source: ―Torggler, M. (2009)‖
The above diagram shows the different CRM functions. These are explained in the
following sections.
2.5.2 Operational CRM
There are three application architecture of CRM. The first one is the Operational
CRM. This is when CRM is used in the ―front Office‖ which involves customer
contact such as sales, marketing and service. It involves automating business
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processes relating to the customers. These involve Sales Force Automation (SFA),
Customer Service and Support (CSS), Enterprise Marketing Automation (EMA).
SFA helps in improving the sales activities thereby improving the Banks sales
process. CSS is involved in the automation of customer services such as after sales
services and so on. EMA involves automating the marketing aspects of the Bank.
Operational CRM could be further explained as a tool which supports business areas
such as marketing, sales and service. This is done through the automation of all
customer related processes. The operational function of CRM is what the CRM
literature talks about. Operational CRM deals with Marketing automation, Sales
automation as well as Service automation. Operational CRM helps in marketing
automation through Campaign Management. This is where the customers are given
up to date information in order to keep a positive relationship with them (Torggler.
M, 2009). CRM systems help in planning and preparing for the campaign and
provide relevant applications for the communication channels. CRM helps sales
automation by managing internal and external sales processes through technologies.
Sales automation such as order management and sales force support are carried out
by CRM. Sales force is supported by having the technology of online planning of
sales activities. Product configuration is also done by CRM. Service automation is
considered very important as this is an operation which contributes immensely in
successful long term relationships with the customers. Service automation is done by
automation of helpdesk where incoming requests from customers are automatically
assigned to the relevant staff. CRM helps in managing complaints efficiently. This is
done through categorizing complaints systematically and is all automated. Service
requests are automated too. These are some of the operational functions of CRM.
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2.5.3 Analytical CRM
The second application architecture is Analytical CRM which involves analysing the
data collected through Operational CRM. Analytical CRM provides a bridge
between the ―front office‖ and ―back office‖. That is the Data collected through the
Operational CRM, which is ―front office‖, is analysed in the ―Back office‖. The
information is stored in Data warehouses. The analysis provides valuable
information about the market and customer behaviour and so on. CRM provides
applications where the marketing analysis could be carried out. This is where the
campaign success could be reviewed and customer satisfaction could be measured.
CRM provides applications where the sales activities could be analysed and
evaluation of different services and products could be carried out. Bottle necks could
be identified through managing functions where forecasts are made as warning
signals found. The information is used to segment the customers and to identify
potential customers for cross and up selling. Data collection is really important for
any Firm. Especially data about the different types of customers is very essential to a
firm‘s success. This attribute of CRM helps analyse the data collected which
converts it into information which is used for further decision making by the firm.
There are a number of technologies involved in analytical CRM. The following
diagram shows the different analytical functions of CRM.
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Figure 2: Analytical CRM functions
Source: ―SAP, 2001‖
2.5.4 Collaborative CRM
The third application architecture is Collaborative CRM which enables interaction
with customers through all channels such as email, phone, fax, web and more. It
supports coordination between employee teams and channels. Collaborative CRM
controls and integrates all of the communication channels between the company and
the customer. This function of CRM brings firms an opportunity to better understand
what the customer wants and needs as the data is collected through many channels.
By Using a number of communication channels there is maximum transfer of
information and Collaborative CRM contributes to constant communication between
the customers and the firm. Collaborative CRM helps in a number of ways such as
contact management which helps in efficiently managing contact details using a
number of tools. E-CRM and Internet functions are where customer data from online
activities are integrated. Online catalogue creation is also done through CRM.
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Collaborative CRM also helps customer interaction centre. This is the base of
customer services and uses modern technologies to manage this effectively.
2.6 Benefits of CRM
There has been an increased use of CRM. There is evidence that most industries are
spending more on CRM trying to enhance company relationships with its customers.
Firstly and most importantly CRM creates loyal customers to the company.
According to Adolf, R and Hooda, R (1997), CRM enhances relationships with
customers through product customization, tailored service, focussing on whole
relationships and through multichannel capabilities. This shows that CRM provides a
good base to provide a better service to the customers. That is it provides
opportunities to customize the products according to the customer requirements. This
is mainly done through increased communication with to and from the customers.
Increased communication brings the exchange of information and in turn the
opportunity to understand the customers better. This way the company could provide
‗tailor made‘ products that the customers require. Therefore an increase in satisfied
customers would enhance loyalty.
According to Microsoft Dynamics (2008) there are a number of benefits CRM
software provides. Customer retention is stressed by CRM and there is the fact that it
is easier and cheaper to retain existing customers than to search and attract new
customers. This does not mean CRM does not help attract new customers but it
focuses more on retaining the existing customer and increasing customer
satisfaction. CRM helps in providing the employees with the relevant customer
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information for them to identify the potential customers who would be beneficial to
the company and focus more time on satisfying them. Retaining customers needs
accurate information about customers. CRM enables the access to complete
customer information to all relevant departments. The departments or the employees
could provide the service without contacting other departments or even transferring
customer calls to other departments.
Maximising customer profitability is another benefit of CRM. Using CRM would
help segment and choose customers who are attractive and profitable (Reed, 1997).
Through segmenting the company could target markets. By targeting markets the
company could focus on a specific type or group of customers. Choosing customers
is very important as there is evidence that certain customers account for a large
portion of the overall turnover and focussing on these customers would provide the
organisation with increased profits.
A company would benefit from increased sales if CRM is used effectively. As
mentioned earlier CRM helps companies have a competitive advantage by satisfying
customers. There is also the benefit of automated storage customer information
rather than storing it in an employee‘s head. Remembering customer information is a
hard task for employees if there are many customers. That is the employee might
forget relevant information or if the employee leaves the information is lost.
According to YapCrm Limited (2008), CRM provides the benefit of monitoring
productivity. That is staff performance could be monitored. There is improved
transfer of information and knowledge through increased communication with
customers. This creates loyal customers and loyal customers tend to bring in new
customers.
26
The table below shows certain benefits
Table 1- Benefits of CRM
Source: - ―Chen and Popovich, 2003‖
CRM helps the automation of repetitive activities such as everyday activities helps
the employees focus on more value and beneficial. According to BestSoftware the
following are the top ten benefits.
Centralized Data: - This is where the customer information is stored in one
centralized database, and this provides the employees complete information about
the customer and does not matter which department they work for.
Marketing Automation: - this is where CRM automation tools are used in order to
segment customers which would later help in the marketing campaign.
Customer service and Support solutions: - Company can track and provide customers
with solutions for any inquiries and an automated service through Web Customer
Portals.
27
Advanced Account and Opportunity Management: - this feature allows for tracking
by probability of close, products, lead source, status and competitors.
Robust forecasting and reporting: - through CRM management can forecast through
historical data and trends and accurate forecasting and reporting leads to better
services and improved sales and therefore profits to the company.
Automated Workflow: - this is where business processes are automated and
interlinked between departments. This way the employees share the same
information and accurate information.
Scalability: - BestSoftware claim that CRM is equipped to handle scalability factors
in the changing world. The scalability factors affect database performances.
Configuration and Customization Capabilities: - CRM solutions allow a company to
modify and customize data tables and it adapts to the business needs.
Integration: - CRM provides high quality integration with the organisations
activities. The employees are provided with complete customer interaction in order
to help the company make decisions which would be more effective.
Advanced Security: - CRM solutions provide the company with the opportunity to
control certain activities such as viewing and modifying data. This way it is not
possible for unauthorised personnel to change the data and the data is secure.
Scullin et al argues that CRM has the following benefits even though it is not
different to the ones mentioned earlier. That is, increased customer loyalty, effective
marketing and improved customer service and support. There is also increased
28
efficiency and cost savings such as identifying unproductive resources, tracking of
costs, better forecasting and measurements for quantifying return on investment.
There has been research that says the return on investment is not only gained through
customer profitability but identifying which customers would pay and which would
become bad debts. CRM helps in finding customers who would commit fraud and
defection. This way the company benefits from finding out certain warnings which
they could prepare for.
Edhelstein.H (2000), states that CRM assists profitable interactions with customers
and simultaneously making interactions friendlier through individualisation.
According to Microsoft, CRM is used to ―maximize the profitability of existing
customer relationships while driving efficiency improvements and cost savings‖.
Max Fatouretchi (2006) states that, CRM captures key customer information through
the front office and eliminates most paperwork. It improves efficiency and quality of
customer advice. CRM improves key business processes integrating both the Back
office and Front Office operations. CRM promotes efficient and quality customer
service by managing Customer contact and correspondence through a centralized
database. It increases effective communication with customers through the use of
easily accessible customer information on the computer.
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Table 2:- Advantages of e-CRM
Source:- ―Popescul, D and Genete, L.D, 2007‖
The above table shows the benefits to the clients as well as the company in using
collaborative CRM.
2.7 Challenges in adopting CRM
There are a number of cases where CRM solutions have failed. That is, it has not
provided any tangible or solid advantage to the companies which have adopted
CRM. There have been a number of arguments on its importance in the current
world. CRM is supposed to provide an opportunity for companies to gain a higher
return on investment. However, there has been research which suggests that CRM
has failed in providing higher return on investment. Forsyth (2001) argues that there
is a view that CRM adoption has not met its expectations(cited by Buttle F, 2002).
30
The surveys conducted by Leverick et al (1998) found that only 11% of 400 British
and Irish companies had successfully installed CRM. Anton (2002) has reported that
about 69% of CRM implementations have failed (cited by Troy, V, 2008). This
shows that there could be some underlying problems as to why CRM fails. The
following is a number of general reasons as to why CRM fails. The reasons are both
pre and post implementation.
The first is the lack of commitment from the employees. This could be both senior
managers and the lower hierarchy within the company. Senior managers are
expected to show enhanced commitment in the company‘s activities and especially
for a CRM project. A CRM initiative involves cultural changes too. Foss, B et al
(2008) mention Kale‘s (2004) finding that the lack of adequate change management
was the cause of the CRM failures in 87% of the cases investigated. Adapting to the
new customer focussed strategy involves a change in the processes and activities.
The employees must be prepared to digest the new working processes. A customer
centric strategy such as CRM involves the employees to view their business
operations from a customer‘s perspective. This involves the employees to learn the
extra skill of customer servicing. Employees of a company are important in the
success of CRM as they will be the people who will be interacting with the
customers constantly and influencing customers and this requires training. There is a
cultural change, which is customer centric. The commitment is very important as
there will also be technological changes which will change the processes in the
operations of the company. The employees will have to adapt to the technological
change as well as the change in operations which will change the way they have to
carry out a specific task. Survey by Martiny, M (1998) indicated that commitment
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was very important. Senior management involvement is necessary not only for
making the major decisions of the project but also the post implementation
operations. BMC which was a software company failed twice trying to implement a
successful CRM. Initially it failed due to the lack of key executives or business units.
The senior management are involved in the training of the employees as well. CRM
implementation needs the expertise of the senior management and mainly the
commitment to change.
Kale (2004) states some management issues which contribute to CRM failure. They
are:-
 Viewing CRM initiative as a technology initiative
 Lack of customer centric vision
 Insufficient appreciation of customer lifetime value
 Inadequate support from top management
 Underestimating the importance of change management
 Failing to re-engineer business processes;
 Underestimating the difficulties involved in data mining and data integration.
Viewing CRM as a technological initiative has been a major problem. Instead it
should be viewed as a strategic change for the whole company. The technology
would help in a company achieving customer retention and therefore profits.
However, technology alone would not help. Employees viewing the technology as a
superior solution would be distracted from the operations the technology is supposed
to perform. That is the IT department of a company becomes more powerful and
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starts coming up with technical solutions whereas the focus should have been on the
marketing department where strategic solutions should have been made with the help
of technology. There has been research saying that companies could be easily
distracted from understanding the customers by the CRM technology capabilities.
A lack of customer centric vision contributes to the failure of CRM. A customer
centric vision is where the company gains an in depth knowledge of the customers.
Organizations adopting CRM should focus on internal rather than on customer
priorities. That is companies need to critically evaluate their operations from a
customers' perspective. This will give an insight as to what the customer‘s opinions
are and help the company reform any problems. However, this is where most
companies fail. The companies don‘t focus on the customers‘ perspective but focus
on implementing new technologies which may or may not be of interest to the
customer. In that case there are increased risks of the new investment becoming a
failure.
Kale (2004) also argues that there is insufficient appreciation on the customer
lifetime value. That is the company needs to understand the customers who are
profitable to the company and distinguish them from the customers that are not that
profitable. For this to happen, customer lifetime value should be understood by a
company. Customer lifetime value is described by Kale (2004) as ―the estimated
profitability of a customer over the course of his or her entire relationship with a
company‖. There have been studies indicating that the companies which understand
the Customer Lifetime Value are 60% more profitable than the ones that do not.
There is a view that a small percentage of the customers provide a large percentage
33
of the overall profits to the company. Therefore the companies should be looking to
discover the customers who are profitable and there are certain techniques such as
ABC to evaluate the costs associated with customers and this way Customer
Lifetime Value could be understood.
Underestimating the importance of change management has been a highlight in
CRM failures. Failure to adapt to the changes in the working processes as discussed
earlier. The employees need to be trained and educated regarding the new
technology. Any CRM project is bound to fail if the people who will be
implementing have little knowledge of how to carry it out effectively and efficiently.
The employees need to be trained in order for the CRM to be successful and the
employees will need to adapt to the new technology.
CRM changes the way business processes take place in an organisation. For
example, there would be automation which could eliminate certain processes while
there may be certain other activities which will be added by CRM. This means that
there should be re-engineering processes which means a change in the way the
organisation undertakes its operations. A lack of this re-engineering process would
end a CRM project into a disaster. A quote from the Gartner report says the ―CRM
calls for a fresh approach to business processes, rethinking how they appear to the
customer and re-engineering them to be more customer-centric and deliver greater
customer value‖ (cited by www.luxorcrm.com, 2010) This shows the organisation
should take care of its re-engineering process and make sure the processes are
created according to the organisations‘ customer with customer insight.
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Inadequate Data mining and data integration has been a cause for CRM failures.
Data mining is where the customer data from various sections or departments in the
organisation are analysed in order to predictive, causal, or diagnostic value (Kale,
2004). Data integration is the process of bringing together all data about a particular
customer from various places within the organisation and linking them so that the
user has a 360° view of the customer. This way the employee who uses the customer
information has total information and could provide a better service to the customer.
In order to do this effectively the organisation should choose which data to retain and
update. However integration of data and choosing the right customer data to retain
has been a difficult task. Therefore CRM failures have been blamed on this tough
task.
There have been a number of reasons as to why CRM fails put forward by
media.techtarget.com as follows.
Poor objective settings have been the basic cause for many CRM project failures
(media.techtarget.com). CRM projects fail if the firm fails to align CRM initiative
with strategy. The author argues that most initiatives are focussed on gains in
efficiency and not on any competitive advantage. Moreover failing to anchor the
initiative is another cause for CRM failures. Without specific goals any project is
bound to fail. Therefore a CRM project needs identification of clear objectives and
guidance in achieving the objectives set. Evaluating from a customers‘ perspective is
very important. E.g. General Motors Acceptance Corp.‘s commercial mortgage
operation (GMACCM) implemented automated voice response technology which the
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customers did not appreciate and was therefore a failure (media.techtarget.com).
This is due to the lack of evaluation from a customers‘ perspective.
Lack of senior leadership has been stressed in many studies. Inadequate planning and
scope setting occurs after the objectives have been set. This is where the attempting
to implement a large project with a lot of changes to the business operations goes
wrong due to the complexity of the initiatives. Too many features cannot be installed
into the company at once and if the company decides to, then it would be a failure.
Failing to adequately address the business processes contributes to CRM failures.
Business processes change with new technology being implemented and these new
business processes need to be well defined and understood by the users in order to
undertake the business process.
Implementing problems are considered to cause failures in CRM. The author talks
about two main challenges in implementation of CRM. The first is inadequately
staffed teams and the second falling into technology traps. Staff teams should consist
of the correct mix of expertise. That is the correct ratio of technical people and
business users. A balanced project team could help them achieve the objectives.
Technology in the other hand is complex and requires planning. In most cases the
technology is used for what it has the capability for rather than for the business
objectives. This would divert the objectives set and therefore cause CRM failure.
Post implementation operations should be well managed and undertaken carefully.
This means they would have to look for updates which will suit the company‘s
requirements. This shows CRM is not just a technological investment but an
ongoing process.
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According to Microsofts survey of 100 midsized UK companies, it is the users of
CRM which is the main cause of CRM failures (http://www.cbronline.com). The
survey indicated that only 24 % of the businesses say that their employees use CRM
effectively. This shows that most CRM success depends on the involvement of both
the higher level people and lower level people in the hierarchy. Starkey and
Woodcocks (2002) mention a number of reasons as to why CRM fails (cited by
Troy, V, 2008) and is shown in the diagram below:-
Table 3:- Failure Reasons
Source:- ―Troy, V, 2008‖
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There are a number of barriers put forward by many authors. There are different
perspectives. The above show the general challenges in adopting CRM.
2.8 Summary
CRM has become a centre of attraction to many industries. This chapter explains
what CRM is and it showed that there are different perspectives as to what CRM is.
It could be viewed as a technology or a strategy or both. There are a number of
functions of CRM which are explained and the benefits and challenges are explained
too. CRM has been used in the past and there have been many efforts to undertake
CRM. The evolution of CRM has been explained this chapter too.
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3 Chapter Three- Methodology
3.1 Introduction
This chapter explains the method by which this investigation was undertaken. It
explains the different research methodologies and then goes onto explain the
approach used for this investigation. It explains the different key stages which were
undertaken in order to carry this investigation effectively.
3.2 Research methodology
According to Dr. C. R. Kumar (2008) research is search for knowledge which is
intense and purposeful and understanding of social and physical phenomena.
―Research is a systematic search for information; a process of inquiry‖ (Graziano
and Raulin, 2004). Methodology is explained by Easterby-Smith et al (2002) as a
combination of techniques used to enquire into a specific situation. R. Kumar
mentions that a Research methodology is a way to systematically solve the research
problems. Research methodology helps to find the answers to the investigation
undertaken in a more methodical manner which makes the research much more
39
effective and find bona fide answers. There are a number of research methodologies
for a researcher to choose from. A research method is simply a technique for
collecting data (Bryman, 2001). There are a number of research methods such as
qualitative, quantitative or mixed methods. For the purpose of this investigation a
qualitative research method is undertaken.
The investigation uses a qualitative strategy which is a research strategy which gives
importance to words rather than quantifying in the collection and analysis of data
(Bryman, 2001). Burns (2000) explains that qualitative research focuses ―on the
validity of multiple meaning structures and holistic analysis, as opposed to the
criteria of reliability and statistical compartmentalisation of quantitative research‖.
Burns further explains that ―qualitative forms of investigation recognize the
importance of the subjective, experiential ―lifeworld‖ of human beings‖. He also
mentions that qualitative methodology provides ways to discover in depth meaning.
Creswell (2003) explains that a qualitative research method is where the researcher
makes ―knowledge claims based on the multiple meanings of individual experiences,
meanings historically constructed, with and intent of developing theory or pattern or
advocacy/ participatory perspectives or both‖. A qualitative research method would
drive the researcher to collect data with the motivation to develop theories from the
data collected. Qualitative research emphasizes an inductive approach where theories
are generated. Through a qualitative research strategy we could understand the
research problem or topic from the local population perspective. The research
approach used in this investigation is an inductive approach.
3.3 Research Approach
40
It is important to make a decision on the research approach due to the following
reasons mentioned by Easterby-Smith et al (2002) cited by Saunders et al (2007: p
119). Fundamentally it helps take a positive decision on the research design which
will be used. The research design is not just the methods by which the data is
collected and analysed but it is more of the whole research process and finding the
relevant answers. Secondly it helps you think of the research strategies which would
adapt to your interests. The third reason is that the knowledge about the different
research approaches would help the researcher adapt his/her research according to
the present constraints. These reasons clearly suggest that a knowledge and choice of
research approaches are very important.
An inductive approach is used as this is a research strategy emphasized by
qualitative research. The investigation involves looking into certain theories and
further research and analysis is undertaken to derive certain theories. An inductive
approach is where there is data collection and data analysis and therefore there is the
development of theories. This is opposed to a deductive approach where there is
development of theories and hypotheses and a research strategy is designed to test
the hypotheses. Saunders et al (2003) explains Inductive approach as an approach
where data is collected and using this data, theory is derived. An inductive approach
moves from more specific observations to broader generalization and theories
(Trochim, 2006). An inductive approach could sometimes be called as a bottom up
approach. In an inductive approach trends and patterns are identified before deriving
at a conclusion. It could be further explained as an approach where the truth or false
of a statement is found by gathering information on the topic and finding relevant
evidence. There is observation followed by reasoning with the help of the
information gathered. The observations lead to conclusions and theoretical
41
understandings. Graziano and Raulin (2004) explain that a researcher who starts with
empirical observations and using this, he/she derives at a conclusion is engaged in
inductive reasoning. The diagram below shows the inductive approach.
Figure 3- Inductive Approach
Source: Research methods Knowledge base. ―www.socialresearchmethods.net,
2006‖
The above diagram shows how the Inductive approach works. Firstly the
observations and measures are made and following this there would be certain
patterns detected. This would lead to some tentative hypothesis which could be
reviewed in order to develop a theory.
There have been arguements that Knowledge has to start with collecting facts and
through this find some order and this was known as the inductive approach. This
approach develops theory by collecting information through various research
methods and then evaluating them. Saunders et al (2003) explained that an inductive
approach allows an opportunity to explain the topic further. This approach is useful
for this study as this study looks to explore more into the topic and tries to find the
answers.
42
The above explained research approach is adopted in this investigation. This study
will follow this methodology by collecting data through a Desktop survey. The
research method which was undertaken to find the relevant answers is discussed as
follows.
3.4 Research Method
The investigation undertaken uses certain techniques as follows. Firstly an in depth
literature review was undertaken. Literature review on past research done by other
authors and papers published by authors relating to CRM was carried out. This
provided thorough knowledge of the topic and helped understand the problem
situation. It is important to apprehend the different kind of data, namely primary and
secondary data. Primary data could be explained as data collected directly. That is
first hand data. In other words new information collected as part of the research
project is known as primary data (Veal, 2005). Secondary data could be explained as
data which has been collected or observed by other parties and published. Veal
(2005) also explains that secondary data is existing data which was gathered by
someone else for some other purpose. This research was undertaken using secondary
data. The information obtained for the research was through published material. In
other words there were no interviews, surveys or experiments undertaken for this
research. Secondary data provides new dimensions of thinking as it allows exploring
new relationships and identifies trends with the existing data. This requires in depth
literature review to be undertaken. The investigation was done through a desktop
survey and the data was collected through the internet. Case studies which were
43
published over the internet were collected in order to answer the investigation
questions. The key stages involved in this research method are explained below.
3.5 Research Design
Research into any subject needs a research design. A research into a specific topic is
a process which has to be carried in order to find the answers for the research
question. It should be understood that it is not just a one off thing which could be
undertaken in one night. Research design has been defined by Yin (1994) as ―an
action plan for getting from here to there, where here may be defined as the initial
set of questions to be answered, and there is some set of conclusions about the
questions”. The research design includes certain techniques which will be discussed
further and the techniques are very important to this study. The research design
adopted in this investigation is similar to the one adopted by Parul Bhandari. Parul
Bhandari undertook an investigation at the University of Sheffield in the Information
Systems department. The framework followed by Bhandari et al was proposed by
Yin (1984) and it is as follows.
 A critical literature review on CRM in Banks was undertaken to provide
theoretical background to the study.
 A set of key questions developed for critical analysis
 Related case studies selected on certain basis such as validity and reliability
 An analysis undertaken on each case study using the key questions and
knowledge from the literature review
 The answers derived from the analysis and theories were developed as an
answer to the study.
44
Figure 4:case study framework
Research Question
Critical Literature
Review
Establishing of Key Individual Case study Critical Review and

Questions Critical Analysis Synthesis
Case Study Selection Theory Extension
The above diagram shows the case study framework which will be adopted in this
study.
Bhandari et al used the above framework and this investigation would be following
the same research design as his. The key stages or processes involved in this
investigation are explained below.
3.6 Key stages
3.6.1 Stage 1- Literature review
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Review of the literature is an activity undertaken for this investigation in order to
understand and gain background knowledge of the research topic. Easterby-Smith et
al (2008) explain that a literature review is a research activity carried out that would
contribute to gaining knowledge on a specific subject. Creswell (2003) explains that
a literature review shares knowledge and results of other related study to the
investigation. He further explains that a literature review could be used as a
benchmark for comparing the findings of the research with other findings. Moreover
the literature review is undertaken to derive conclusions and find suggestions for the
investigation and involves more than just mentioning other authors‘ opinions, it is
more of a critical evaluation of those perspectives. Most importantly qualitative
research is about developing theories and conclusions from the data collected and a
literature review helps in thinking about the topic and encourages different
perspectives of thinking about the topic.
A literature review is first undertaken to provide knowledge about the topic which is
the benefits and challenges of adopting CRM in the banking industry. The literature
review consists of a number of topics. Primarily, CRM is examined in a more
general manner. That is, what is CRM, the benefits of using CRM in all industries
and finally the general challenges involved in adopting CRM is observed. This gives
an idea of what CRM is and how it has been used in the past and what challenges
could be expected from adopting CRM.
The literature review was carried out on various sources. The primary sources were
books, online journals and other articles which were found online. The books were
46
all accessed from the University library. The literature review undertaken in this
investigation has been crucial as the ―checklist‖, which will be discussed later, was
developed looking at the literature review. A whole chapter is dedicated to the
literature review.
3.6.2Stage 2- checklist development
The next stage involved in this investigation is the development of checklist.
According to Lucas (1974) a case survey method is done through the analyst
preparing a set of questions and answering a checklist to gain the answers (cited by
www.rand.org). The checklist was developed in order to answer several questions.
The objective of this research is to find the answer to the question of ―what are the
benefits and challenges of using CRM in the banking sector‖. This question has
many parts such as benefits and challenges and this could be further broken down to
benefits to the bank and benefits to the customer. Therefore a checklist which
contains a number of questions would help to answer the question. The checklist was
developed from the literature review undertaken. That is the checklist has certain
objectives which is to answer certain questions. The questions are listed as follows:-
 What CRM functions are crucial for the banking sector?
 Why banks adopted CRM/what benefits does CRM provide banks?
 What are the challenges and difficulties in adopting and using CRM?
With the above questions in mind and with the literature review the following
checklist was developed.
Question 1
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What CRM functions were necessary for the bank?
- Operational:-
- Analytical:-
- Collaborative:-
The above question involves the different functions provided by CRM.
There are three different kinds of functions which may or may not be of
use to the bank. It is crucial to derive the answer of which functions
would be useful to banks.
What CRM functions were not adopted by the Bank?
There are certain functions which were not adopted by the bank and this question
could explore why they did not.
Question 2
What benefits does CRM provide Banks?
What provoked the bank to adopt CRM:-
The benefits to the bank:-
The benefits to the customers:-
This question would look at why CRM was adopted by the banks. What was the
need to adopt CRM for banks and after adopting what benefits did the bank have and
what benefits did the customer gain from the bank adopting CRM.
Question 3
48
What are the challenges of adopting and using CRM?
Management barriers:-
User/employee barriers:-
Technical barriers:-
Barriers to the customer:-
There are a number of barriers identified in the literature review. The barriers faced
by the bank and the customers are examined in this question. The barriers are
grouped into management barriers, user or employee barriers, and technical barriers
and barriers to the customers.
3.6.3Stage 3 - case studies
Easterby Smith et al (2008) explains that a ―case study looks in depth at one, or a
small number of, organisations, events, or individuals, generally over time. Case
study research has been defined by Yin R.K (1984) as ―an empirical inquiry that
investigates a contemporary phenomenon within its real-life context; when the
boundaries between phenomenon and context are not clearly evident; and in which
multiple sources of evidence are used‖. Creswell mentions that a case study is where
there is in depth exploration of a program, event, activity, process or one or more
individuals. Burns (2000) identified a number of purposes of the case study. He
explained that case studies are very valuable as it prepares the researcher for the
investigation. They are rich in information of the subject area. Secondly case studies
help to find relationships and help to make generalisations. Thirdly case studies
49
provide evidence which make generalisations easier. He also explains that a case
study is preferred by a researcher when the relevant behaviours cannot be
manipulated. A case study has in depth information which is very useful especially
when there are unique historical materials.
With the benefits of adopting a case study approach being explained earlier the
criteria in which the case study was selected is explained below. Case selection is
very important as it determines the effectiveness of the whole investigation. There
are four types of case study designs found by Yin (1994). The diagram below shows
the different types.
Figure 5:- case study designs
Single case study design Multiple case study design
Holistic (single unit Type 1 Type 2
of analysis)
Embedded (multiple Type 3 Type 4
units of analysis)
For this investigation a multiple-case study type of case study approach was used.
That is type 4 in the above diagram. That is a collection of case studies which was
put together to answer the relevant questions. R Yin (1994) suggested that multiple
50
sources of evidence to be used in order to overcome the problem of validity. A
multiple case study tends to strengthen the validity as well as the strength of the
results. It replicates the relationships and therefore increases the strength of the
theories which are produced as a result of the study. The multiple case study design
adopted in this study is shown in the diagram below.
Figure 6:- multiple case study design
The above diagram shows the multiple case study approach proposed by Yin (1984).
Yin (2002) quoted by Easterby-Smith (2008) suggests certain case study selection
criteria.
Case studies should have clear design produced before data is collected and should
cover,
 The main questions or propositions
 The unit of analysis
51
 Links between data and propositions and
 Procedures for interpretation of data.
Burns (2000) identifies four main components to this kind of research design.
 Initial case study Questions- this could be explained as the main question
what the case study is trying to answer. This provides the focus for the
investigation. The question this investigation tries to answer is what are the
benefits and challenges in using CRM in Banks.
 Study Proposition- the main question needs to be made specific as the above
question is too vague. This would help find answers to the main question and
for this investigation the main question is separated into 4 different questions
and it is further dissected. This is shown in the checklist development
section.
 Unit of analysis- this is concerned with giving a definition to the case. That
is, what the case really is.
 Linking data to propositions and criteria for interpreting findings- this
relates to the data analysis step.
Taking the above considerations the cases were selected in order to answer the
questions. For this investigation seven case studies were used. The cases found were
relating found according to the availability of case studies over the internet. The case
studies found were mainly on banks and research on banks.
Certain case studies regarding the whole financial sector was used in order to
answer the relevant questions.
The case studies were selected on certain criteria as follows
52
 The subject area should be covered. Which is the CRM benefits and
challenges in the Banking sector
 The case study should look at different aspects of the investigation. This
would be data which answers each sub question in the checklist. E.g. when
talking about the benefits of CRM the sub questions which should be
answered are what provoked the Bank to adopt CRM, what are the benefits to
the bank and what are the benefits to the customers. Each sub question of all
questions should be answered depending on the availability of data.
 Should be relating to the Banking sector
The above criteria were adopted as there were limited resources available. The case
studies selected looked at different aspects of the study as not all questions in the
investigation could be answered using one case study. E.g. certain case studies look
at only the challenges of using CRM in the financial sector and not the benefits.
3.6.4 Stage 4 - Analysis
Using the case study and the checklist developed an analysis of the case studies was
done. This provided answers to the questions and helped derive generalisations. The
analysis was done evaluating the case one at a time. Each case study would provide
answers to different questions but not all of them would provide answers to all the
questions in the checklist. Therefore the case studies are evaluated carefully and this
helped conclude with generalizations and theories developed. The analysis would
follow a certain framework which is shown in the diagram below.
53
Figure 7:- Framework for this investigation
Question 1 Overall Conclusions for Question 1
Case Study 1
Case Study 2
Case Study n
Question 4 Overall Conclusions for Question 6
Conclusions Conclusions Global

for Case for Case Conclusions
Study 1 Study n
The diagram explains the framework which will be followed to analyse the Data.
Initially each case study would be analysed according to the checklist questions.
Then each question is analysed according to the findings of each case study. This
would lead us to making global conclusions which would be generalizations and
theories being developed.
3.7 Limitations
This study has certain limitations. Firstly it was the trouble of finding case studies..
There are various dimensions to the main question and not all questions could be
answered from using one case study. Therefore it required a thorough search through
the internet for various case studies. Initially a number of 15 case studies were
54
selected and in depth reading of the 15 case studies showed that only 7 of them
would be appropriate for this investigation. However, the availability of case studies
which answer all the questions was not as expected as there were limited resources.
The lack of case studies showed that there is very little information on the use of
CRM in Banks.
3.8 Summary
This chapter explains the case study approach used and the selecting criteria used.
The research approach was an inductive approach. The checklist questions were
explained. This structure was used in order to answer the research question.
55
4 Chapter Four- Findings and Data
Analysis
4.1 Introduction
This chapter provides the findings from the case studies. Each case study is analysed
according to the checklist questions in this chapter. A brief introduction to the bank
analysed is given following the analysis and then a summary which mentions the
main functions, benefits and challenges. Analysis of all the banks is done in this
manner.
4.2 Analysis on Frontier Bank
4.2.1 Introduction
Frontier Bank is a UK based bank which emphasizes the use of telephone banking in
order to retain its customers. Frontier Bank calls its telephone banking service
Frontier Telephone Direct (FTD). FTD was introduced to help Frontier Bank to
increase its business market customers. Frontier Bank introduced this service as a
stand-alone service which the customers could use. It was more concerned with
gaining new customers from small businesses. They believe the telephone banking
service would help them retain its customers as well as attract new customers. This
case study would be important as telephone banking is a CRM initiative.
4.2.2Question 1- What CRM functions are crucial for the

Frontier Bank?
56
There were a number of functions which proved to be crucial for frontier and they
believed these functions helped them grow and retain their customers. Frontier
believed that, to retain its customers and to keep them satisfied they had to provide
them good quality services which were better than their competitors, cheaper and the
customers should approve it. In that way, Frontier Bank provided telephone banking.
Telephone banking falls under collaborative functions of CRM. Through telephone
banking Frontier Bank has a channel to communicate with its customers. Banks use
this function as a substitute to providing services through normal branches. Frontier
bank used call centre to provide its telephone banking services.
Frontier Bank focuses on providing services to worthy customers. According to
Frontier Bank worthy customer meant customers/ businesses that would be able to
maintain high average credit balances and not cause trouble and not be expensive to
provide its services to. To find which customers were good and which customers
were not worth concentrating on, Frontier Bank used techniques such as checking
the customer‘s or businesses past records to check the account balances and if the
cheques were returned on time due to insufficient funds. This function of analysing
the customers would fall under Analytical CRM function. To be more specific it
used a customer analytical function.
Frontier uses an operational function which is managing complaints. This CRM
function helps store the complaints in an orderly manner. The complaints are stored
in a computerised database for future reference. This function helps Frontier Bank to
analyse the complaints. That is, Frontier Bank has developed a set of answers for
frequently asked questions. This function has made the employees of Frontier not
waste time on common repeated questions.
57
There are certain functions which have not been adopted by Frontier Bank. Currently
it uses techniques such as postal customer satisfactions surveys and verbal
communications with its customers to obtain feedback. Frontier Bank could have
adopted technology where the feedback is received in a more automated system.
That is they could use the internet to undertake the survey. E.g. they could email the
customers and this might be much quicker and the customer does not need to waste
time by posting the survey back to the Bank.
Frontier Bank could use much more automated technologies to capture an
understanding of the customers such as Customer Analytical techniques to analyse
customer behaviour and customer value, rather than just using past records of
customers and how they have undertaken their transactions.
4.2.3Question 2- What benefits does CRM provide

Banks?
Provoked:-
Frontier Bank had a number of reasons as to why they decided to adopt the CRM
functions it had implemented. Frontier Bank is trying to get new customers in order
to increase its market share. It was also looking to retain its customers by providing
superior services to its customers. In that context, Frontier has adopted Telephone
Banking. What provoked Frontier Bank to adopt telephone banking is to attract new
customers.
Frontier incorporated telephone banking as a service as there was increasing demand
from customers. There were a number of businesses emerging which demanded
telephone banking. That is there were a number of people starting their own
businesses and self employment increased and these people worked at home. For
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people working at home telephone banking would be very beneficial as they
wouldn‘t have to spend time coming to the bank branch for services.
There was also an increase in competition through providing good convenient
services to customers as well as keeping the cost low. The cost of providing
telephone banking services was quite low when compared to the cost of providing
the same service through a branch. There has been research undertaken which
indicates that the cost of telephone bank transactions is lower than that of branch
banking transactions (Allen and Hamiltion, cited in Ahmed and Buttle (2002)).
Benefits:-
Low cost
There are a number of benefits provided by the CRM functions adopted by Frontier
Bank. Firstly it is the cost factor. The cost of providing the service is a benefit to the
bank. The cost of providing the service through call centres is cheaper than providing
the same service through a branch. The low cost benefit becomes more emphasized
as though the cost of providing the service has reduced, the quality of the service
remains the same or better. The customers are encouraged to use these superior
services through other benefits such as lower charges on services and higher interest
rates on the savings. This is because of the banks low cost of providing the service.
Reduction in customer complaints and efficiency.
The complaint management team which has been adopted by Frontier bank helps
them analyse the problems the customers report. The analysing through the help of
the operational function (complaint management) has helped the bank to come up
with standard answers to frequently asked questions. There is proof that the customer
complaints have reduced. The complaints had reduced from 93 in 1996 to 25 in the
59
first half of 1997. This shows that analysing the complaints help them provide a
better service to its customers.
Customer comfort
The benefit to the customer is comfort. A normal banking service would be to
provide the services through a branch. Through telephone banking the customers
could stay at home and enjoy the services provided by Frontier bank.
4.2.4 Question 3- What are the challenges of adopting

CRM?
Targeting customers and the use of inappropriate analytical
techniques
The first challenge in adopting a successful CRM function such as telephone banking
is to find out which customers to target this service to. Telephone banking services
are targeted to customers who are self employed and do businesses at home and it
was challenging to find which customers suited their product. It was challenging to
find which customers would be beneficial to the bank and would cause less trouble
to the bank. Even though they had analysed the customers using past records, it was
not so effective. Frontier Bank believed its screening process of finding ―good‖
customers was good but failed to do the job. There were no sufficient analytical
techniques used.
Under utilisation of the database
The telephone banking service is provided to all customers and the complaints from
customers could not be distinguished if it was from a profitable customer or not. This
could have been done if the database could have been updated and there could have
more information recorded in the database such as the customer behaviour and so on.
60
This is partly the responsibility of the employees who interact with the customers as
he/she is responsible in noting down such material.
Employee ability
The challenge in using the CRM function (Telephone Banking) is need to use the
service much more effectively. Frontier must use telephone banking to gain
knowledge about the customers and provide them with better services. There is
pressure on the bank to make full advantage of this function. The cost of the service
should be looked after too. Frontier Bank did not hire much staff in order to keep the
cost low therefore there is a challenge that the employees should be well trained to
undertake the various tasks. During a conversation with the customer the employees
must be able to keep note of important information of the customers‘ preferences and
so on. E.g. the type of travellers‘ cheque the customer prefers. Frontier did not have
any recording technology which they could listen to again.
4.2.5 Summary
The above analysis shows that there have been a number of reasons which provoked
Frontier Bank to adopt the CRM function which is Telephone banking. Firstly it‘s
the demand for it and the cost and benefits it has through it. There were certain
functions which were implemented but this did not help Frontier Bank to effectively
carry out the CRM strategy. There could have been other CRM functions which
could have been implemented and would be very useful. The benefits are that it uses
it to get to know more about its customers and customers benefit from it because it is
easily accessible and there is no hassle for the customer as he can do banking from
home. They are able to provide better services through complaint management. The
61
main challenge it faced was to use these functions effectively to gain the necessary
knowledge about its customers and analyse them in order to provide better services.
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4.3 Analysis on Parish National Bank
4.3.1 Introduction
This is a small community bank which operates in four parishes in the New Orleans
area. PNB is owned by a family who operate as the managers and hold over 50% of
the stock. PNB had certain goals such as growth over the long term. PNB in the year
2002 had $280 million asset and was expecting to grow to $500 million by the year
2007. They had the goal of providing credit quality and they were focussed on
making vigorous and effective developments in business. The management of PNB
believe in good relationships with its customers and try to provide products which
they think would provide a competitive advantage. The bank is focused on certain
developments such as web banking which will be discussed later and PNB targets
small businesses and small business employees. PNB competes with similar banks
which have almost the value of assets.
4.3.2Question 1- What CRM functions are crucial for the

Banking sector?
The function adopted by PNB is internet banking. This function falls under
collaborative CRM. The function adopted by PNB is collaborative CRM which is
internet based banking services and PNB has provided this service quite effectively.
PNB claim to provide products and services through online banking which the other
small banks have not provided. Functions such as e-register where it allows the input
of transactions before the checks and deposits are presented.
The direct mail campaign is one of the functions which have been used by PNB
successfully. This is an operational function of CRM. The new marketing approach
63
which PNB used in order to undertake aggressive marketing was done through a
direct mail campaign. CRM provides a marketing automation function which
consists of campaign execution. This would have helped PNB achieve success.
That is the ―market hunter software‖ programme. This function helped PNB target
its customers and indicated ―aggressive marketing‖ as it found potential customers to
the bank. This analytical function tracked deposits and disbursements from the banks
account.
There are certain functions which have not been implemented by PNB. There are
certain collaborative functions which could have been implemented by PNB such as
introducing more channels and contact management and so on. These collaborative
functions enable the bank to integrate with its customers and would help track and
gain more knowledge of its customers. PNB could use the internet banking service to
their benefit by using new CRM operations such as virtual shop assistants and online
availability checks. Analytical CRM functions have not been implemented. The
market hunter software is an analytical function but PNB has not implemented a
system where it could calculate the percentage of banks sales which relate to the
small businesses. It is very important to have up to date information which is
accurate therefore PNB could use this to track its customers and have an idea of what
the customer needs are. It does not have technology to analyse its performance with
other competitors as well. There are no feedback mechanisms at PNB. PNB does not
know what the customers are expecting the bank to invest on (new technology and so
on). Even though PNB uses collaborative CRM, that is Internet-based banking, it
does not make full use of it.
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4.3.3Question 2- What benefits does CRM provide
Banks?
Provoked
The banking industry in which PNB operates in is very competitive. As a result of
competition there have been a number of mergers and acquisitions. Regional and
local banks were reducing in number as they were looking for mergers and
acquisitions. This was mainly because of the large players in the industry and the
pressure to compete exerted by them. Smaller banks tend to go for mergers and
acquisitions with other sectors. This was also a result from low restrictions in not
allowing cross sector operations. This showed that there was increased competition.
There was pressure to provide many services by one bank. In other words one-stop
shopping. Customers were seeking banks which provided all services they expect in
order to save time and cost. This increased the competition as banks had to provide
more services to the customers and mainly small banks such as PNB which have a
small number of customer base.
Changes in technology have also been a major cause for the increase in competition.
Larger banks could afford the high cost technologies. Even automation of processes
which is an operational function of CRM could be easily adopted by larger banks.
Smaller banks had the option of growing quickly making the bank available for a
buy out at a good price or to survive by concentrating on target customers. That is, to
identify a certain group of customers who would be beneficial to PNB and provide
them with good quality products and services. This has provoked PNB to adopt
certain CRM technologies such as online Banking.
Benefits
65
Better relationship with customers
Firstly it is able to provide a good online banking service to its customers and has an
edge over other similar banks which do not provide such online facilities. CRM
strategies are used to enhance the relationships with the customers. PNB is superior
in this because of the exaggerated focus given on employee training to become
relationship oriented. That is they are trained to be polite and attract the customers
and treat those customers as guests.
Better marketing campaign
Through the market hunter software PNB found potential customers. This way they
could increase their marketing through the marketing campaigns they had been
undertaking. The direct mail campaign has won PNB customers at the expense of
other Banks. This is because of the effectiveness of the campaign.
Better services to customers
The online banking service provided by PNB, has benefited the customers too. That
is, the service is of high quality and PNB provides services which other small banks
do not. E.g. e-register allows the customers maintain check register from the banks
transaction register. The bank has certain goals such as to grow through opening new
branches, innovative products, web banking and emphasis on sales culture.
4.3.4 Question 3- What are the challenges in adopting

and using CRM?
Lack of understanding and choosing appropriate CRM functions
The first crucial challenge is the doubt in which technology to adopt. PNB does not
know what to do with the current technology it has or what new technology to invest
66
in. PNB does not have a clear strategy as to what it wants. PNB cannot implement all
the CRM functions but could choose which ones it wants to implement. This is not
easy as PNB has no clear goal as far as the technological needs are concerned. It
does not know what further developments could be done to its current ―Web Based
Financial services‖. PNB has been consulting other marketing firms in order to help
them take a decision on the technological path but has not agreed upon any.
Secondly PNB does not have a feedback system which is crucial when focussing on
target customers. The feedback system would give PNB knowledge of the
customers‘ needs and wants and customers would be able to give their opinion on
whatever steps PNB takes. The challenge here is that PNB needs to know which
technological development the customers would prefer. Certain technological
advancements may seem attractive to implement but the acceptance by the customers
could be very low. They might view the development as unnecessary and annoying
one. Moreover choosing the correct function is very important to the management as
PNB would have to manage its resources very carefully as it has limited resources.
This challenge is associated with the costs of the technology.
Customer service choice
The only challenge for the customer is to choose the service it wants from the bank.
This is because PNB charges for its services and it is quite expensive for the
customers. If the customer does not use a particular service then it is not necessary
for the customer to pay for the service. The challenge here for the customers is to
analyse the benefits of the service.
Lack of users of technology
PNB faced certain problems with obtaining feedback from customers. This was
partly because of the lack of users of complicated technology. PNB believed that
67
there were many users who did not know to use most of the technologies which
otherwise could have been implemented and would have helped get feedback from
customers.
Lack of resources
There has been a lack of resources at PNB. There is a lack of resources to compete in
a highly competitive market. This has slowed down the growth rate of PNB. In a
highly competitive market, PNB needs enough resources so that it could implement
technologies which would cost a lot too.
4.3.5 Summary
The above analysis of PNB indicates that there has not been much CRM technology
implemented by PNB. PNB has been craving for growth because of competition.
This in turn has made PNB seek technologies which would enhance their
performance and they believe it is through good relationships with its customers.
Good relationships with customers could be achieved through CRM. The most
effective function of CRM which has been adopted by PNB is the enhanced online
Banking services. It has been providing a good service to its customer even though it
has not utilised the information gained through online banking to gain knowledge
about its customers. PNB is seeking to implement technology and strategies which
would help get feedback from customers. The main challenge for PNB has been
choosing which CRM function to implement. This decision is crucial for a small
bank like PNB because of the limited resources it has.
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4.4 Analysis on First European Bank
4.4.1 Introduction
The following analysis is on a European Bank. The name of the Bank was not
revealed and the name used in the case study was First European Bank. For the
following analysis the same name would be used and as an abbreviation of First
European Bank (EB). The data present in the case study was gathered by the authors
through in depth interviews with senior employees at EB and the independent
consulting company which helped them design and implement CRM. EB falls under
a global financial group which operate in more than 60 countries and employs more
than 100000.
4.4.2 Question 1- What CRM functions are crucial for the

Banking sector?
EB implemented a real-time database. This was implemented in order to gain an
understanding of its customers. The bank has a number of channels of
communication through its distribution network. The database is updated using
collaborative functions of CRM. The various channels are used to collect important
information and are stored in the database for later reference. EB has implemented a
data store called ―datamart‖ where in depth details of the customers are stored.
EB adopted was analytical functions. This is where the data collected through the
various channels are analysed. EB has created a ―Client system information
programme‖. This function is used to ―stock, extract and analyse‖ data in order to
spot a trend in the customers‘ behaviour. The customer behaviour trend would help
EB to adapt its marketing strategy accordingly. The data collected would be stored in
the data warehouse and the analysis takes place here. The analysis is through the use
69
of complicated algorithms which find a relationship and predicts the next move of
the client.
They have implemented the function of home and self banking, and even a complaint
handling interface. The home and self banking functions are collaborative functions
which enhances the communication between the customers and EB. The complaint
management function is more of an operational function. That is, it is service
automation where the complaints are managed much efficiently. Through this EB
could get feedback from its customers and provide better services to its customers.
There are certain functions which have not been adopted such as the operational
CRM functions like marketing automation and sales automation. The marketing
automation would allow them to focus on providing the customers with adequate
information about the products and so on. The sales automation deals with the
automation of all the sales activities with the customers. These functions may not
seem appealing to EB.
4.4.3 Question 2- What benefits does CRM provide

Banks?
Provoked:-
Firstly it is the marketing aspect which has been changing. There has been a big
change in the way marketing is done. That is the physical distance, time, markets and
competition is changing the way any industry does marketing. There is more
emphasis on services and product services; there is increased focus on loyalty and
the value of customers; and IT plays a major role in any industry, especially the ones
70
which have a lot of interaction with the customers. It is mainly IT which has
impacted the way marketing is done. E.g. IT has increased the communication
channels for a company and this would allow more knowledge to be transferred and
this knowledge could be used for different purposes in the company. EB would have
been influenced by such factors.
There is increasing awareness that it is the customer market which is very important
and that any company would be able to survive only with strong relationships with
its customers. This has provoked EB to adopt CRM.
EB shifted from a mass market to a CRM market. That is, it was crucial to
understand the customers in order to retain them. Retaining customers was very
important for any bank and providing them with the services which they want is
essential. This needs learning about the customers and the only way was to adopt
CRM. EB also thinks CRM would help them set up a mixture of distribution
channels to the customers.
Benefits
Better means of gathering information
Firstly the use of various distributions channels such as agencies, call centres and so
on provides the bank to gather information about the customers. There will be
gathering of information which the back office could use to provide better services to
the customers.
Better understanding of customers
The database in which the customer information is stored helps EB to segment the
customers according to their behaviours which they could not do before the
implementation of the database system. EB is able to provide individual customers
71
with specific services the customers would want at different time periods of their
life.
Better services to customers and more customers attracted
The database helps the identification of customer profiles which provides EB the
ability to analyse its customers and EB could segment the customers according to
various categories. This way they could target the profitable customers and satisfy
them by providing them with tailor-made services and therefore retain these
customers. By keeping these customers happy the benefit is that these customers
would bring in new customers to EB.
Customer convenience
Online banking is very convenient for the customers as they could do banking from
home. The customers are given the opportunity to understand the bank‘s products
and services through the client service. Call centres have been successful for EB as
the customers are satisfied because they do not have to waste time talking to the
wrong department for the wrong problem as they would be directed according to
their needs.

and using CRM?
Choosing appropriate functions
Firstly before implementation EB had a number of CRM functions which it had
decided to implement. These functions will have to fit into EB‘s mission and
objectives. There could always be inappropriate functions which will not fit the
company‘s goals. Choosing functions is a challenge for EB.
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Communication and Resistance to change
EB should control the focus of its employees. EB should monitor the employees‘
activities in the process of implementing CRM. This is because resistance to change
would result in the implementation and usage of CRM unsuccessful. The new vision
of EB should be well communicated to the employees and the employees should be
focussed on it. This is a challenge to the employees too. Change management needs
to be carried out effectively. There are certain challenges in change management
such as establishing the need to change, communicating the clear vision, the top
management needs to be well engaged in the implementation process and change
process. The employees need to be included in the change process and the
performance needs to be measured.
Capacity of technology and maintenance
EB should update its IT tools too. This is because of the success CRM brings to the
Bank through new customers or new information about the customers‘ needs to be
maintained. There should be consistent updating of data. Outdated data is of no use
to EB. This needs EB to have up to date technology which could accommodate large
information and help analyse them. This is a challenge in using CRM successfully.
Moreover there are certain processes which the technology might not be able to carry
out. E.g. there could be technology which is set to send out standardized emails to
customers, but it might lack the ability to send out specific emails to customers who
require specific answers. Even though technology provides many automated
processes, it has a limit to what it can do.
Employee ability
Using call centres is very beneficial to EB but it should make profit from those call
centres. The challenge is to convince the callers to buy the latest products and direct
73
them to less expensive distribution channels. The challenge is among the employees.
They should have the skills to convince the customers into buying the products and
services.
4.4.5Summary
EB has implemented most CRM functions which it thinks is necessary. The benefits
have been realised pretty quickly especially with the collection of information and
analysing it. This helps them retain its customers and keep them satisfied. However
there are a number of challenges it faced. The biggest challenge is change
management for EB. If the change management is carried out in a systemic manner
and the CRM system updated constantly then the project would be a success for EB.
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4.5 Analysis on HSBC
4.5.1 Introduction
HSBC is a well known Bank which operates worldwide. The HSBC in UK was
initiated by an acquisition by Hong Kong and Shanghai Banking Corporation of
Midland Bank Plc. HSBC has always been adopting a CRM strategy. In the 1950‘s
to the 1970‘s there have been CRM strategies adopted by HSBC through assigning a
bank manager for each customer in order to deal with their financial needs. These
show there have been efforts to focus on its customers in order to enhance the
relationship with its customers. HSBC has adopted a strategy which was customer
centric in 1999. This strategy had a considerable CRM initiative. The following
analysis is on the ―local HSBC‖ where CRM techniques have been implemented in
order to reach a global standard. The global HSBC standard would be to offer the
customers with standardized features to do banking.

Banking sector:
The ―Clearwater‖ strategy which was implemented by HSBC had pointed out a
number of downfalls. Therefore there were a number of functions or upgrades to the
current processes which helped HSBC local.
The first function to be enhanced is the database. The customer database was
updated to maintain customer history for individual customers through automation as
well as manual input. This is a collaborative function of CRM. There was contact
management function which was implemented and this helps recording of customer
75
data at the customer contact point through any channel. It helped maintain records of
the history of each customer.
There were Analytical functions implemented. This helped HSBC to analyse the
customer data which was recorded into the database and segment them into various
categories. Some of the categories were most profitable customers, customers who
contact the bank most number of times and so on. This was not possible before the
implementation of CRM. The analysis allowed HSBC to target its customers.
HSBC had implemented operational function which is complaint management and
marketing automation such as campaign planning and execution and controlling.
Complaint management was a function which helped gather complaints from the
customers and categorize them accordingly. Marketing automation which dealt with
the marketing campaign helped HSBC to develop campaigns according to customer
preferences and would use it to market its products and services.
HSBC had not implemented any other operational function such as sales automation.
However, this function may not be of much use to HSBC.

Banks?
Provoked:-
The first was the burden on the employees to have up to date information about its
customers. The employees had the burden of asking customers to verify the details
HSBC had about them. This they believed would keep customer information updated
and the employees had to market their products and services when there was contact
with the customers. This is both time consuming for the customer and the employee
has a very big burden on him/her to do all this in a very short time. This led to the
76
decrease in performance of the employee too. This has provoked HSBC to
implement CRM.
There was no targeting of customers. There was no information about the customers
which was good enough to segment them. This was a problem as HSBC did not
know which product or service would be suitable to which customer. The targeting
of customers was done on an intuition and experience of employees. This would
have provoked HSBC to adopt CRM.
Since HSBC had no way of targeting the customers and no way of recording the
customer information HSBC had the tendency to ask the customers to update
information which was at times targeted at the same customer. There was the
problem of trying to sell the products and services to the same customer. This would
lead to customer dissatisfaction. To avoid this HSBC would implement CRM which
helps store data about its customers.
There was the usage of new e-commerce techniques. That is the usage of various
channels such as TV-Banking and Internet Banking. These channels had been used
in banking as new techniques which would increase the strength of the relationship
with customers as they were able to do banking at various places and with
convenience. This has provoked HSBC to adopt CRM.
Benefits
Better information of customers and better targeting of
customers.
The first benefit was that HSBC was able to target its customers. Before the
implementation of CRM it could not target its customers as there was no information
about customers maintained. After the enhancement of the database HSBC was able
77
to use the information and analyse them and segment its customers. HSBC was able
to maintain history of the customers and it was all maintained at one place. There
was access to the data which made the employees aware of what the customers‘
history was. This enabled HSBC to sell its products and services to customers who
would be interested in those services and not sell them to customers who aren‘t
profitable to HSBC.
Updated information
The bank was able to encourage the customers to use the channels such as Internet
Banking and TV-banking. The Bank could encourage the customers to use these
channels for Banking and the customers could provide feedback. The encouragement
of using these channels means that the customers could view their details, do
banking and could update their information. HSBC did not have to worry about the
customer information being outdated and they did not have to spend money or time
on updating these details.
Strengthen relationships with customers
By encouraging the use of multichannel to use the Banking services HSBC could
strengthen their relationships with the customers. HSBC provided ways of getting
feedback from customers. The customers were given the opportunity to easily give
feedback to HSBC. This increases the relationship with its customers.
Personalized services which customers enjoyed
The customers of HSBC enjoyed the availability of information which was made
possible through the implementation of CRM and enjoyed the personalised services
from HSBC. The customers would enjoy the new online facilities which will satisfy
them.
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4.5.4Question 3- What are the challenges of adopting
CRM?
Organisational restructuring
HSBC has to change the organisation to match. For the CRM implementation to be
successful HSBC had to reorganize. It required the reorganisation of its business, IT
and marketing and the challenge in making the whole organisation customer-
focused. The change in organisational structure is very important as CRM would be
successful only if the whole organisation is focused and are able to carry out the new
processes which will be changed after the implementation of CRM functions.
Choosing appropriate functions and Capacity of technology
There is a challenge in implementing the suitable technology. HSBC had
implemented certain technologies and not implementing all the technologies which
were available. This has however reduced the CRM capabilities. The restriction in
the technologies would reflect in some functions not being able to undertake certain
processes. HSBC was more focused on not letting IT lead its processes. It was
careful realising that more technology does not mean it is better.
Customer satisfaction
There are certain challenges which will affect the customers of HSBC. They are
obtaining data from customers without dissatisfying them. HSBC may ask the
customer to provide information which they may feel is unnecessary. HSBC will
have to interact with its customers and the challenge to HSBC is that they should
convince the customers that they are providing a number of functions which will be
very useful.
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Cost of further development
HSBC has a lot of potential of developing the CRM functions. However, there is a
barrier of cost. The cost of further developments needs to be considered. There is no
point in investing in some functions which might not provide much benefit.
Therefore HSBC need to assess in functional options.
4.5.5 Summary
The above show that the main functions which were implemented are the
collaborative function and analytical function and operational functions. These
functions provided benefits such as better knowledge about its customers and could
target its customers. The employees had better access to information about the
customers which helped them increase their performance and satisfy the customers.
The challenges HSBC faced was the organisational change and the appropriate
technology to be used. There were general challenges in making the customer aware
of the new functions, products and services.
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4.6 Analysis on Greek Bank
4.6.1 Introduction
The following analysis is on a Greek Bank. The name used for this analysis would
be Greek Bank (GB). GB was established in 1991 by a team of Greek entrepreneurs.
The group had a vision of creating a bank which is modern, flexible and satisfies the
needs of the customers. The GB group had 64 branches, 4 bank centres and 7
affiliates in 2006. The bank has a number of goals which includes providing
customers better services. GB has implemented CRM. The following is a discussion
about the functions it had implemented, the benefits and the challenges it faced.

Banking sector?
There was the implementation of a new call centre. This is a collaborative CRM
function. Through the call centre GB could provide services to its customers much
efficiently and at a lower cost. GB through its call centre was able to provide voice
banking. This is where recorded phrases are used to communicate with the
customers. It was able to provide phone banking services. This way the customers of
GB could be served more frequently and increasing the strength of the relationship
with the customers.
The main function which was implemented is a ―unique platform‖ to integrate the
data and information. The unique platform included the adoption of a data storage
system (CRM server). There was implementation of collaborative functions such as
contact management where customer details were stored. There is the use of
operational functions such as service automation where the employees are able to
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access data about the customers, such as history, and could use it to provide efficient
services to its customers.
GB had adopted customer interaction centre. The contact channels are brought
together and all information are integrated. This enables GB to provide day to day
services such as transactions to its customers and the branches could deal with more
specific problems.
GB had implemented voice banking which is an operational function. This function
is service automation. E.g. if a customer wants more information about a particular
service or if he/she wants to do a transaction this would help them choose an option
over the voice banking service and this would lead them to the appropriate
department. This is a much efficient method of providing services.
GB had not implemented any Analytical functions of CRM. It had not implemented
any functions which help them to distinguish its customers. GB had focussed more
on providing efficient services to all customers mainly through the call centre where
most operations were shifted to from the branches. GB has an opportunity in the
future to implement such analytical functions.

Banks?
Provoked
GB believed that CRM would provide the edge to succeed. GB in 2002 had a small
customer base which they could not satisfy. GB provided inefficient services where
the customer had to wait in long queues in the branches. Customers were highly
disappointed with GB‘s inefficiency. They had high operating costs which they
could not keep low. This provoked GB to implement technologies which helped
them improve their efficiency.
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GB was seeking to offer services through other channels. Before the implementation
of CRM, the call centre served customers with only one service which was the
account balances. This had to change and GB believed that implementing CRM
would be the best solution.
Benefits
Reduced costs
Cost of providing services through a call centre is much less than the cost of
providing services through a branch. Through the use of CRM, GB is able to provide
most of the services via a call centre. Before the implementation of CRM, GB had to
provide most of the services through the branch which was not only time consuming
but costly too. The cost factor is a benefit of using CRM. The increasing demand of
the services are managed well by as the cost of operating is low. There was no need
to hire more employees even though the calls increased. This was because the
employees were well equipped to provide quick responses to customers. The unique
platform also requires less integration and it needs less expenditure on maintenance.
Better services to customers and strengthen relationship with
customers.
GB could enhance its relationships with its customers as it provides them alternative
ways of banking. GB after implementing CRM could provide services through other
media such as telephone banking which is much more convenient to the customers.
The call centres were improved with better technology and new applications which
would allow GB to serve its customers better. The call centres were equipped to
provide services which they were not able to provide before CRM implementation.
This in turn would create customer satisfaction and enhance the relationship with the
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customers. The employees from other operations could be transferred to the sales
department which dealt with providing better services to customers.
Reduced complexity of the system
The complexity of the bank was reduced. Through CRM, GB could create a common
platform where there was only one contact point. This reduced the need for
integration technologies. There was efficiency in the operations. The unique platform
reduced the complexity of maintaining the system. All information was stored at one
point and that was where the information was referred to when providing the service
to the customers. This reduced confusion.
Employees better equipped with information.
The employees benefit from better information. This is because of the CRM
functions which were implemented such as contact management and so on. The
employees had the capability to provide better services because they were well
equipped with all the information and technology they required. The customers were
served quickly even though the number of calls increased. This was because of the
efficiency CRM created and customers enjoyed 24 hours services from GB. This was
because GB provided services through IVR and voice Banking.
Room for improvement
The unique platform provided the bank an opportunity where the system was able to
assist new applications which would be implemented later. There was opportunity to
build on the CRM activities GB is currently undertaking.
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and using CRM?
Need for good consultants
The need for specialised personnel or consultancy in order to implement the various
functions successfully was a challenge. GB needs advice and help in implementing
and using the various applications. The consultants in Greece were not experienced
enough. GB had to hire from abroad as this was an important issue. There should be
access to ―best business practices‖ when it comes to implementation. This is because
CRM implementation cannot be done without any consultancy and GB should be
directed towards the best practices available in implementation.
Organisational Restructuring and choosing appropriate
functions
The integration of the existing system is a challenge. The existing systems in the
bank need to be integrated into the new system which required technology to support
it. This would have been a task for GB as they would have to restructure the
organisation implement the new technology. GB would have to choose the
appropriate functions to implement too.
Good project team and organized project
There should be a good project team, perfect programming and a well organized
project. There should be good communication with the consultants and between the
project team. Working together is very important and this is a challenge GB would
have faced. The project needs to be organised in such a way that all the existing
systems could be implemented. CRM is an ongoing process which has to be
organised very well.
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Keeping costs low
The implementation of CRM functions would provide benefits such as low cost after
implementation. However, the cost of implementing CRM, would have to be looked
after.
4.6.5Summary
The above analysis shows that the CRM functions were implemented in order to
make the call centre efficient so that GB could provide better services to its
customers. GB had implemented certain collaborative and operational functions but
has not implemented Analytical functions. The main reason that provoked GB to
adopt CRM is the relationship with its customers. GB was more concerned about its
customers‘ satisfaction. The challenge was to have a good project team and to have
experienced consultants. GB required support in the implementation of CRM.
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4.7 Analysis on Bank of Tokyo Mitsubishi
4.7.1 Introduction
This case study analysis is based in the Japanese Bank. The name of the Bank is
Bank of Tokyo Mitsubishi (BTM). This Bank operates in India and it considers
interacting personally with customers would be the best strategy to retain its
customers and to provide them with good services. They believe that satisfied
customers bring in other customers to the Bank. BTM provides its services mainly to
two types of customers who are Embassy and Joint Venture Accounts. This Bank
was formed by the joint venture of the Bank of Tokyo and Bank of Mitsubishi. The
bank had realised that CRM systems would be beneficial to the retail financial
services. BTM is a retail bank with in excess of 6 million customers which
implemented the first phase of a CRM system.

Banking sector:
They had developed 2 systems in order to implement the multi channel environment
in the Bank. That is, Marketing database which includes Customer Data storage and
Prediction of Customer Behaviour. These functions are analytical functions of CRM.
These functions are developed in order to gain a better understanding of customers.
The data about customers and their preferences are stored in the customer data
storage for later reference and the Full view of customer-bank relationship indicates
which customers have been ―good‖ in dealing with their transactions and other
services from the bank. This would help the employees who are serving the customer
as they would know the history of the customer. This is a service automation
function of CRM. The prediction of customer behaviour would help BTM
distinguish between the ―good‖ and profitable customers and the ones which are not.
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The second development is Geographic Marketing (MAGO). This includes of
Penetration Analysis, Market Research, Presence surveys, Network Analyses and
Micro-Marketing. These functions are Analytical Functions. These functions help
BTM understand the customers ―micro‖ environment.
BTM has implemented certain programmes where the marketing campaign is
created. This function is an operational function which is marketing automation. This
has helped BTM to target its customers and market its products and services in a
more orderly manner.
BTM has implemented Analytical functions as a first step in implementing CRM.
These initial implementations of functions demand certain other technological
developments which will enhance the effectiveness of the current CRM functions
implemented. BTM demands both collaborative and operational functions of CRM
which would be helpful to achieve its goal. Collaborative functions would help
manage the contacts. E-CRM/ Internet have not been implemented by BTM. This is
because they do not provide online services to its customers. BTM should consider
the various channels through which it could provide services to its customers.
Certain Operational functions have not been implemented. E.g. Complaint
management has not been implemented and there are further analytical tools which
the current CRM functions demand. There are a number of requirements which
would be beneficial to improve the ―branch environment‖ and the ―new centralized
marketing system‖.
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Banks?
Provoked
The decision to implement CRM is because of the knowledge that CRM is crucial
for surviving. CRM is known to provide higher profits through the automation of
services where the relationship with the customers could be strengthened. BTM
believes through CRM, they could increase the bonding with its customers and while
providing them better services they could increase the profits through the low costs
of managing its relationships with the customers.
From a Marketing point of view it was necessary to implement CRM in order to
overcome competition. Retail banking has moved from segment marketing where a
range of products are targeted at specific customers, to banks dealing with customers
individually. Each customer is served with care by providing them with financial
services according to their needs. BTM believes that introducing CRM technologies
could be the solution to overcome this challenge of serving the customers‘ individual
needs.
CRM provides BTM with new communication channels. The sector demands new
channels as it enhances flexibility in providing its services. That is the customers
could be served according to their wishes as CRM provides many channels to
provide services to its customers.
BTM believes that a successful CRM implementation would help them achieve a
better understanding of the customers. This is because of the increased interactions
with its customers.
There are barriers to new entrance. BTM thinks that a CRM technology
implementation would increase their ability to provide the services the customers‘
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demand which is very important in order to stand out from its competitors. Moreover
its objective through CRM was to improve its Direct Marketing effectiveness.
Benefits
Better understanding of customer preferences
The Data mining techniques have provided advantages such as targeting the right
customers and better knowledge about the customers‘ needs. This will result in BTM
being able to provide services according to the customers‘ requests.
Better segmenting of customers and analyse customer behaviour
Segmentation analysis helps identify profitable segments which BTM was not able
to do before the implementation of such functions. BTM was able to understand
customer behaviour and to use that understanding as segmentation models and then
communicate with the target customers to make further developments to the services.
Through the initial phase of CRM implementation BTM has increased the
effectiveness of the direct marketing activities through market analysis and other
functions. Moreover BTM has achieved the skills base which is needed to implement
further CRM functions.

CRM?
Resistance to change
Firstly it is the resistance to change. For a successful implementation of CRM there
should be committed people. That is the people using the CRM function should
know the benefit of implementing the functions. People across organizational
boundaries should be coordinated and have a bonding amongst each other. This
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relationship within organisational people will enhance the trust between and in return
would teach them the skills to create strong relationships with the customers.
Employee awareness of the whole system
The employees should know what is happening in the whole company when it comes
to the implementation of CRM. The employees must be able to visualize the whole
system. This helps in the employee knowing how they would affect the customers
through CRM. The employees would be able to understand how the functions
implemented would help their efficiency in providing services to the customers.
Good project team and coordination between them
There should be commitment in the project team. This is because without
commitment the CRM system would not be implemented effectively. The
implementation of CRM would be done through a cross functional approach. This
requires support from other functional areas and other departments which will have
an effect on the implementation.
Need for good consultants and employee ability
BTM requires the help of CRM consultants who have the experience in the industry.
Without the consultants BTM will not be able to carry out the project effectively.
CRM also demands the users and the implementers to develop certain skills in order
to use the functions effectively. The functions might be intricate to comprehend.
Innovation
The other challenge is that when people realise the problems affecting them, they
tend to look for alternatives which are innovative as well as effective. The bank must
be able to provide new things to the customers. To achieve successful CRM the bank
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should use its new technologies and come up with new ideas to provide services to
its customers.
BTM is looking to implement the new requirements and CRM functions cannot be
implemented in one go. It‘s an ongoing process as the systems will have to updated
and well maintained. Overall the bank should create a suitable environment, culture
and attitudes of employees towards the implementation of CRM. They should have a
clear business focus. CRM even requires the skills in employees to serve the
customers better and so on.
4.7.5 Summary
BTM have implemented a number of functions which are more of analytical
functions which is used to analyse the customers, market and so on. These functions
have provided them with benefits such as understanding the customers better and
BTM has been able to target its customers better. However it is still in the process of
implementing CRM. The further functions which will be implemented later would
help them carry out the analysis much more effectively. The crucial challenge BTM
currently faces is the resistance to change. If the employees are able to understand
their role in the firm and if there is commitment within the employees as well as the
project team the CRM functions should be implemented successfully and using the
CRM functions would be efficient.
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4.8 Analysis on Fine-Equity Bank
4.8.1 Introduction
The following analysis is on a Korean retail bank named Fine-Equity Bank (FEB).
FEB is a bank which has implemented CRM successfully. It had implemented a
number of functions and it implemented them in two phases. The first one was the
assimilation of functional resources and capabilities to enhance its business
processes. The second one was incorporating human resources into the system. FEB
wanted to transform itself into a customer centric bank and wanted to satisfy the
customers. FEB had been carrying out CRM before the new ―enterprise wide CRM
strategy‖ but it was not effective.

Banking sector:
They first developed an Enterprise Customer Data Store (ECDS). The data store was
updated using Collaborative functions of CRM. Collaborative functions such as
customer management are used to update the data store. This function helped
distinguish between the most profitable customers and the not. It also helped the
event-based one to one marketing.
FEB implemented a number of analytical functions. FEB had been looking to
implement an analytical framework. The framework was to develop analytical
technology which would be made parallel with the customer life cycle. It
implemented ―customer profile analysis, customer profit analysis, customer
dynamics analysis, customer group analysis, product/ service profile analysis,
product/service profit analysis, product dynamics analysis, organisation profile
analysis, and channel analysis‖. The above analytical techniques give FEB the
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opportunity to not only analyse customers but also its products, organisation and
channels. This provides FEB to figure which channel and organisation is making
profits.
The other CRM functions which were implemented were the operational functions.
The functions are an event based response system and Sales Force Automation
(SFA). This would be a medium where it would deliver the CRM plan to the
customer. The CRM plan is obtained from the knowledge about its customers and
through analysing the information. The event based response system helps FEB to
organize itself to deliver a response for each critical event from a customer. A
response strategy is automatically derived, using the event-based response system,
for the problems the customer has. The Sales Force Automation provided FEB with
customer knowledge and provided ways to carry out the sales activities efficiently.
SFA also helped to feed the customer complaints, praises and suggestions, into the
ECDS. SFA also consists of the collaborative function which is contact management.
After the initial phase of implementation there were a number of functions which the
organisation demanded. The CRM function which measured the extent to which the
employee used the new CRM was implemented. This is a service analytical function.

Banks?
Provoked
FEB had implemented CRM to become a more customer centric bank. There are
many reasons as to why FEB was concerned about satisfying the customers. Firstly it
was the competition in the financial industry. There was the deregulation of the
industry and the diversified needs and of the customers. This changed the way banks
did their business. They became more customer-focused and wanted to satisfy the
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customer. Many firms started to invest in CRM. This would have provoked FEB to
implement CRM.
Prior to the implementation of CRM, the IT FEB had been using was inefficient.
There was no integration of the various systems FEB had. Technologically FEB had
the difficulty in integrating all the data which was gathered through the various
channels. Each channel had been operating as a separate entity and there were
different formats of information. It was time consuming to integrate customer data.
Therefore there was no ―good‖ information about the customers. The marketing
campaigns undertaken by FEB could not be carried out effectively. Only certain
information from certain channels was analysed and was not accurate.
The employees had a tough time in having the responsibility of marketing the
products and services to the customers. The employees even had to target the
appropriate customers with the lack of information about them and this led to a
decrease in their performance. The employees had to plan the marketing campaign
and execution. A successful CRM implementation would reduce the burden on the
employees and increase their performance.
The inefficiency in the whole system of FEB provoked the implementation of
enterprise-wide CRM strategy. FEB‘s focus of customer-centric or a customer
knowledge based organisation was not attainable with such low quality and ill
organised business practices and technology. An enterprise wide CRM
implementation which consists of the various functions mentioned in the earlier
section would help FEB achieve their objective.
Benefits
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Efficiency
The concept of one to one marketing which was carried out earlier before the
implementation of CRM was inefficient. There was no organised manner in which
FEB could market its products. CRM has helped in the planning, execution and
analysing. The cost of operating has reduced. As the project manager explains, the
workload of each branch has reduced because of inefficient jobs such as repetition of
jobs being removed.
Increased organisational performance
The customer defection rate has decreased by a large margin and this benefit is
believed to be the cause of the better CRM practices which have been employed.
CRM has enabled the bank to target its customers better and more effectively.
Better information of customers
The integration of customer information through the data store (ECDS), helped to
spot customers who are profitable. All information gathered through the channels is
integrated in the new data store and this provides better information about the
customers to FEB. This ensures a better understanding of the customers.
Better sharing of information and better marketing
The integration of all the information has provided FEB the opportunity to better
manage its customer management processes. The information shared throughout the
Bank would be the same and there is no false information and is available to all the
employees. This provides a basis for FEB to manage its customer processes
efficiently. FEB is able to identify any major events which will affect their
profitability. The new data model has a number of components such as ―customer,
product/service, service management, organisation management, contract
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management and interaction management. All these provide the ability of event-
based one-to-one marketing.
Better understanding of customers, products, org and channels
The various analytical functions provide FEB a better understanding about its
customers, products, organisation and the channels. These analytical functions are
very useful for FEB as it allows them to target the customers who are most profitable
and it enables them to find which products or service has been successful and
profitable and it also gives a new dimension to the analysis, which is the cost
effectiveness of each organisation and channel.
Better responses to customers
The operational functions implemented provide benefits such as better responses to
customers. The customer events such as the opening of the accounts, their birthdays
and so on are important to FEB. All these events have a significant effect on the
profitability of FEB. Therefore FEB is required to send appropriate messages to the
specific customers and this requires quick responses from FEB. Before the
implementation of operational functions such as event-based response system, FEB
could not gather such information and could not deliver the massages on time. The
event based response system automatically identifies an event and generates a
response strategy and delivers them to the customer through the channels.
Effective sales activity
The sales force automation function (SFA) provided FEB effective sales activity to
be undertaken. The gathering of voices of complaints and suggestions and so on,
have provided the opportunity to learn about its customers. There is reduction in
operating costs as most of the operations are automated.
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Better services to customers
The customers feedback, good or bad, is fed back into the data store which helps in
analysing what was good or what was bad and this will help FEB to plan its next
marketing campaign accordingly. This helps to provide better services to customers.

CRM?
These challenges arose after the implementation functional resources and
capabilities.
Resistance to Change:-
Employee satisfaction
FEB found that even though there was good commitment from the top management
and good IT, the employee satisfaction and organisational alignment was low.
Employee satisfaction was the biggest issue in achieving success in the
implementation and usage of CRM.
There has been research indicating that a CRM initiative is likely to become
successful with ease in a small organisation than in a big organisation. FEB cannot
implement CRM as a mere technological solution but it should implement CRM as a
business strategy which has technological components. For this to happen FEB
should involve its employees as they would be the medium through which the
customers would be communicated. If the employees are not happy about using the
CRM functions then the CRM implementation is unsuccessful.
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Resistance to share information
Employees had the resistance to share the customer knowledge. The private bankers
who had been serving particular customers had a lot of information about the
customers and were not willing to disclose them. The employees (private bankers)
were following the old style of carrying out the processes. These employees had
valuable information about certain important customers who are very profitable to
FEB. Employees not willing to share customer information made it hard for FEB to
implement a CRM strategy for the long term.
Unwillingness to use CRM functions
The employees at the front desk tended to adopt the old method and did not use the
functions where it provided sufficient information about a customer and so on. This
was a challenge to FEB as these attitudes would only show that the CRM initiative
was useless.
FEB had failed to address any rewards to employees for using the new CRM
functions. There was no performance evaluation. This had an adverse effect on the
employees which provoked them not to use the new system.
Organisational restructuring
There were problems in the operations by different departments. The CRM team
emphasized on spending more time on customers to deliver the needs and wants
while the Customer Satisfaction team emphasized on reducing the average queuing
time. These were conflicting.
Communication Approach
FEB also faced a problem with the implementation approach. That is the employees
were not satisfied with the top down approach which they considered authoritative.
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Taking the above challenges FEB faced at the initial phase it had taken a number of
efforts to incorporate its human resources and it has succeeded.
4.8.5 Summary
The above analysis shows that there were a number of things such as competition
which provoked FEB to adopt CRM. The benefits were better understanding of
customers and the better delivery of services to customers. The challenges FEB
faced are employee satisfaction and the integration of human resources in to the
CRM strategy. This has been dealt with quite well. Employee satisfaction is very
crucial in any project, especially with CRM where the employees would be closely
involved in the CRM operations.
4.9 Summary
All of the case studies analysed provide different answers and to the checklist
questions. They have used all different functions. The banks are of different sizes
and the each bank deals with different customers. The above analysis shows the
different benefits and challenges each bank faced. This would help to derive
conclusions as the mix of case studies used is very vast. That different banks
operating in different areas and of different sizes are analysed.
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5 Chapter Five-Discussion
5.1 Question 1
Table 4:-Functions used by each bank
The above diagram shows the different CRM functions that have been adopted by
the seven different Banks. There are certain functions which have not been adopted
by any of the banks while certain functions have been adopted by almost all the
banks.
Analytical functions help banks to understand better about the aspect they are
analysing. There are a number of analytical functions such as marketing, sales,
service, customer and contact management. None of the banks have implemented
sales analytical function. This may be because of the sales activites of the bank may
not be a tangible one. The sales activity could be opening up a new bank account
from a new customer. What matters to the bank is the service provided to the
customer after the opening of the account.
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FEB has implemented service analytical functions and this is to analyse the extent to
which the employee used the new CRM. FEB had to adopt this function as it had to
convince its employees to use the new CRM functions and this may have not been
the case for the other banks.
Sales automation function has not been adopted by any of the banks. Sales
automation consists of order management, sales force support and product
configuration (CIO, 2006). These functions of CRM may not be useful as they are
functions which may be useful for a manufacturing firm or a firm which sells
products.
The internet has been used by many banks. Using the internet for CRM functions has
been quite low in banks. The eCRM/internet function has been adopted only by one
bank which is Parish National Bank. This function provides the benefit of planning
online catalogues and so on. This is however a good function for organisations where
they undertake online sales. Most banks provide online banking services to
customer. However, research indicates that most of them do not use such internet
based CRM functions.
The marketing analytical function of CRM has been used only by two of the Banks.
Parish National Bank and Bank of Tokyo Mitsubishi use marketing analytical
function. PNB uses ―market hunter software‖ which helps assess the market and to
find new customers to the banks. Bank of Tokyo Mitsubishi uses various techniques
such as penetration analysis and so on. These help the bank to analyse its customer
environment and analyse its competitors‘ ability and its own environment. Research
indicates that marketing analysis is not given much importance by most of the banks
analysed. This may be because the banks which do not use marketing analysis could
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be all well established or could be concentrating on retaining its customers and not
on the competitors‘ ability and so on.
Marketing Automation has been used by three banks, Parish National Bank, HSBC
and Bank of Tokyo Mitsubishi. Marketing automation deals with the marketing
activities and helps in the marketing campaign. It helps through the management of
campaigns. This function is important as it helps planning, execution, and
controlling the campaign. However the majority of the banks analysed have not
implemented this function and do not consider it that important.
Contact management has also been adopted by only three of the banks. This also
indicates that most of the banks have not considered this as important. However, the
banks which have implemented are HSBC, Bank of Tokyo Mitsubishi, and Fine-
Equity Bank. Implementing the contact management function has provided an
important benefit to these three Banks, which is maintaining the customer details in
an orderly manner.
The customer interaction centre has been implemented by three banks. These banks
have brought in most of the customer service contact channels so that it could be
served from unit and they believe it would increase their efficiency. However, this
function has not been adopted by most of the Banks analysed.
Customer Analytical techniques have been adopted by most of the banks. Only the
Greek Bank and the Parish National Bank have not implemented this function. This
function is crucial to the banking sector as it was found in this research. The Banking
sector requires information about its customer and the information will have to be
analysed in order to find what their needs and wants are. Customer analysis, such as
customer behaviour and so on, is very important for the banking sector. The banks
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are looking to retain its customer and even attract new customers. Undertaking a
customer analysis would help the banks achieve their objective.
Service Automation has been used by all the banks except for Parish National Bank.
Most of the banks use complaint management which is service automation function
of CRM. the complaint management helps in organising the complaints accordingly
into categories which could be used by the banks to assess. The customer complaint
is a feedback about a particular service provided by the bank. The bank requires this
information in order to provide the customers a better service. The organizing of the
complaints helps in the bank to look into the most important issue and could provide
solutions. Certain complaints may be in demand of another service which could be
provided by the bank. For this complaint management is very important. Most banks
even use the helpdesk function which is service automation where the customer calls
could be transferred to the appropriate department or personnel to deal with the
requests. Therefore service automation is important for the banking sector.
Overall the two most important functions of CRM which would be useful to the
banking sector would be the operational service automation and the customer
analysis function. According to the research the functions which have not been
implemented by any of the bank is the Sales Automation and the Sales Analytical
function.
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5.2 Question 2
What are the benefits of using CRM?
Table 5:- What provoked the banks to implement CRM
What provoked the Banks to use CRM?
From the analysis it was found that there were many reasons to why CRM was
adopted. The banks had implemented CRM believing it would solve the problems
they faced. The most frequent reason as to why CRM was adopted was competition.
All the banks faced competition from various perspectives. Frontier Bank faced
competition in providing convenient services to the customers. there were a number
of customers who were undertaking their business from home and Frontier bank had
to provide these customers a service such as telephone banking in order to increase
their customer base. Parish National Bank faced immense competition from other
large banks in the area since the large banks could invest in more technology as they
had the capital which made them even more superior. EB faced competition when
the marketing approach of any industry had been changing. There were a number of
Banks which was looking to satisfy the customers with the help of technology. There
105
were increased communication channels which IT provided the banks and EB was
forced to adopt such technologies. HSBC was faced with the technological
advancement too. There were a number of e-commerce techniques which the major
players in the industry had adopted and this has forced HSBC to use such
technology.
Bank of Tokyo Mitsubishi (BTM) faced competition from a marketing perspective.
The banking industry was striving to satisfy the needs of the individual customers
and BTM believed the solution would be to implement CRM. Fine-Equity Bank in
Korea faced competition as there was deregulation in the financial industry. The
banks became more customer-focused and the competition to provide them better
services increased. There have been a number of reasons as to why the competition
has increased in the banking industry such as increased availability in technology
and deregulation in the industry and so on. The competition has provoked the banks
to adopt CRM.
The other reason was to target customers. Banks, due to increased competition, have
changed the marketing approach. That is they are looking to target customers whom
they think would be profitable to them. Targeting customers requires a number of
functional abilities such as customer analysis and so on. CRM technologies provide
such functions and this would have provoked the banks to adopt CRM. Targeting
customers was very important to banks such as PNB as they are looking to survive in
the industry. The banks need to target their customers so that they could provide
better services to them and retain those customers.
The banks were faced with the problem of providing better services to customers.
This was one of the reasons as to why they adopted CRM. PNB faced customers
106
who were looking for ―one-stop shopping‖. HSBC faced customers who were quite
disappointed as they provided with services which they did not like. The Greek Bank
had customers who had to wait in long queues before being served at the branch.
Fine-Equity Bank was faced with the inefficiency in the customer information they
had. They had trouble integrating the customer information which they had gathered
from different channels and this affected the level of service provided to the
customer. The banks analysed faced a number of inefficiency factors and other
demands which they had to fulfil through the use of technology. Therefore CRM was
adopted in order to provide customers with better and more efficient services.
Certain banks such as HSBC and FEB were forced to adopt CRM as their employees
level of performance decreased. The employees had to carry out certain CRM
activities such as updating the customer information and marketing the products and
services. FEB‘s employee had the responsibility to target the appropriate customers
when marketing the products too. And the employees did not have sufficient
information about the customers. This decreased their performance and therefore the
Banks had adopted CRM functions which helped the employee have sufficient
information and helped market the products much effectively.
Certain banks such as Frontier bank, GB and BTM have adopted CRM for the
benefit of low cost. That is the adoption of CRM produces efficiency and this in turn
reduces the cost of operating. Therefore increase in profits. The relationship with the
customers is enhanced by CRM functions and this reduces the cost of maintaining
those relationships.
Overall the analysis showed that most of the banks had adopted CRM because of
increased competition, the lack of ability to target customers and inefficiency in
107
providing services to the customers. CRM provides the banks with an opportunity to
overcome such problems.
What are the benefits of using CRM?
Figure 8:- Benefits
Benefits
Internal Benefits External Benefits
Operational Managerial Strategic
There are a number of benefits which have been realised using CRM. The banks
analysed have benefited from different advantages and the following is a summary of
those benefits categorised into internal and external benefits.
Internal Benefits:-
The benefits realised by the bank are operational, managerial and strategic.
Operational Benefits:-
The operational benefits are benefits which realised through the increase in the
operational efficiency. The operational benefit most banks realised was the provision
108
of better services to customers (Chen and Popovich, 2003). The banks had the
opportunity to provide better services to customers. PNB provided online banking
services which its competitors did not. EB provided tailor made services to
customers. EB was able to do that because it was able to spot out which customers
were profitable using CRM functions and was able to provide those customers with
such benefits. GB provided alternative ways to do banking to the customers such as
telephone banking. FEB through its ability to feed the suggestions or complaints
from customers back into the system could use them to enhance the services
provided to the customers. The benefit of providing better services to customers is
very crucial as it satisfies the customers which are important for banks.
The cost of providing services to customers was reduced with the use of CRM.
Frontier Bank enjoyed the low operating cost in the new call centre through which it
provided services. GB provided most of the services through its call centre. The call
centre did not require additional employees but provided higher quality services to
customers than a normal branch would.
The employees were better equipped with customer information (Microsft
Dynamics, 2008) to provide better services and the employees could increase their
personal performance too. The burden on employees to multi task had reduced. The
employees did not have to update information as the customers were given the
opportunity to do that on their own. GB through its contact management function
could integrate all relevant customer information and the employees had access to
this information. They could provide better services to customers as they had better
information about the customers.
109
The banks were able to respond to customers better. Frontier bank could provide
standardized answers to common questions from customers. FEB enjoyed the
automation of the response system (event-based response system) as it helped
respond better and more effectively.
There were certain other operational benefits such as the ability to update the system
in the future.
Managerial Benefits:-
The most common managerial benefit all banks had was better understanding of the
customers. The CRM function provided a number of benefits such as integration of
the customer information gathered and predicting customer behaviour. This has
provided banks better knowledge about its customers. The database adopted by most
banks such as EB, HSBC and FEB have provided the bank with better information
about its customers through the integration of the information. The history of the
customers are well organised and this helps the banks. The information was
accessible by all the relevant people and the information shared was the same.
The information about customers was used to target them. Through analytical
techniques the customer data are analysed in order to find their behaviour, their
needs and wants. This could be used to target the customers. The most profitable
customers could be targeted (Reed, 1997). The customers could be segmented using
the analytical tools. Banks such as PNB, EB, HSBC, GB, BOTM and FEB have
realised this benefits. FEB used more superior analytical techniques such as
―organisation profile analysis, and channel analysis‖. These provided much in depth
knowledge about the organisation and the channels which helped FEB to find the
cost effectiveness of them.
110
The marketing campaigns have been effective. The information gathered are
analysed and the use of marketing automation techniques the marketing of products
have been successful. The market analysis technique used by PNB has provided
them opportunity to market the products and services to specific customers which
has brought them new customers to the bank. FEB has benefitted from the analytical
techniques and has helped its event-based one-to-one marketing programme.
There are certain other benefits such as the reduction in the complexity of the
organisation. GB benefited from the reduction in technology needed to integrate
information as it had implemented a unique platform which enabled all information
to be stored in one location. There were better means of gathering information. EB
used a number of distribution channels and gathered information through those
channels.
Strategic benefits:-
The strategic benefits were strengthening the relationship with the customers and
retaining them. Providing better services to customers who are most profitable is a
benefit to the banks. PNB satisfied their customers by providing them online
services. HSBC enhanced their relationship by encouraging the customers to use the
different channels of communication. The enhancement in the relationship has been
mentioned by Adolf and Hooda (1997). The targeting of customers who are most
profitable has helped banks to focus on those customers so that they could provide
better services to them and retain them. Satisfied customers are likely to stay with
the bank. And those customers‘ needs and wants can be fulfilled through gaining
knowledge about their preferences. FEB has benefited from the decrease in the rate
111
of defection of customers. Customer retention is another benefit from using CRM
(Microsft Dynamics, 2008).
External Benefits:-
The external benefits in this investigation would be the benefits to the customers.
The customers have two main benefits. Firstly it is the convenience of doing
banking. Frontier Bank provides telephone banking where the customer could do
banking over the phone staying at home. This is convenient for the customers. PNB
provides online banking and so does EB which also provides services through call
centres. The customer could get any service from using the call centre.
The other benefit to the customer was the personalized service provided to them.
Banks have moved their focus to a customer centric one. They are focussing more on
providing services which satisfy the customers‘ needs and wants. Due to the better
understanding of the customer preference, which the banks undertake through CRM
functions, the banks are able to provide the customers with what they want. HSBC
provided the customers personalized services which the customers enjoyed. FEB
provided one to one marketing services to customers. The customers were dealt with
individually. Wherever possible the banks tried to fulfil their individual needs.
Overall the internal benefits were the increase in efficiency in the operations of the
banks. There was better understanding of the customers and the banks were able to
target the customers better. For the long term the banks had the benefit of retaining
customers as they had enhanced the relationship with the customers by providing
better services to them. The customers enjoyed convenience and the personalised
services which the bank provided.
112
5.3 Question 3
What are the challenges in adopting and using CRM?
The barriers faced by each bank have been analysed and the most common barriers
all the banks faced are as follows.
Figure 9:- Challenges
Challenges/
barriers
Management User/employee Technical Challenges to

Challenges Challenges Challenges the customers
Management barriers:-
Resistance to change has been faced by some of the banks analysed. That is the lack
of effective change management. This has been discussed by Kale (2004). EB
addressed this problem and undertook certain steps to undertake change
management. BTM also faced this challenge. The employees operating in different
organisational borders need to corporate and the relationship between the employees
should be good. The employees of the bank need to be satisfied. The banks need to
make efforts to communicate the whole implementation benefit and how important
the employees are to the CRM project. FEB faced a number of challenges such as the
employee not willing to use the new CRM functions as they saw no personal benefits
in using them. The employees were not willing to share information about customers
113
too. The CRM project becomes useless if the employees who utilise it are not willing
to use it and not willing to change.
CRM implementation requires the banks to change in the way they operate. Gartner
report says there should be re-engineering of the processes. There should be the
change in organisational structure. HSBC faced this challenge as it had to change its
business, IT and marketing structure. This is mainly because of the change in the
focus of the whole Bank. GB had to incorporate the new technology into the existing
system. The change to focusing on individual customers requires banks to reorganise
and incorporate CRM practices into them. FEB faced problems between different
departments. One department encouraged spending more time with the customers
while the other was more concerned about the waiting time in the queue. This
needed reorganisation.
There was the need for a good project team. There should be commitment from the
project team and senior management (Martiny, 1998). If there is no commitment, the
implementation of CRM would not be successful. The project team has to coordinate
well and plan the implementation process clearly. CRM implementation is done
throughout the cross functional areas. The project team need to incorporate all the
different functional areas that will be affected by the new CRM initiative. The
project team is also responsible for planning the project. They should consider the
budget too. Therefore a committed project team is very important.
There were other challenges such as the employee not liking the communication
approach. That is the top down approach which FEB adopted. The employees
considered the approach very demanding. FEB had to adopt another approach to
incorporate the human resources.
114
Technical barriers:-
The most common challenge was choosing the appropriate functions to be
implemented. Frontier Bank did not implement appropriate technologies which
would have helped them analyse its customers. PNB did not know which
technology to implement. It did not know how to enhance its current web based
financial services. PNB did not have a clear strategy and therefore had confusions in
which technology to implement. Poor objectives of a bank would lead to failure
(media.techtarget.com). EB and GB faced the task of incorporating the functions into
its existing system. Inappropriate functions would not fit into the banks‘ objectives.
There are a number of CRM functions which are available but the banks need to
choose which function would help them achieve their goals.
The technology implemented could do tasks only up to a certain extent. Technology
becomes outdated quite fast. The maintenance of the technology implemented should
be good. EB needed to have up to date information about its customers and the
customer base increased. The technology at EB needs to be updated to hold more
information. HSBC had implemented certain technologies which could perform only
certain activities and this restricts the operations carried out. If the banks decide on
implementing new technology the costs of further development has to be considered.
User/employee barriers:-
The employees face a challenge too. That is the employees should have the
multitasking ability. They should be able to use the functions efficiently. The
employees at Frontier and EB should be able to sell their services over the phone.
Simultaneously they should be able to undertake notes on the customer preferences.
115
Barriers to the customer:-
The lack of users of technology was a challenge to the bank as well as the customers.
The bank could not provide customers services through channels which the customer
might think is too complicated. The customers had to learn the new technologies in
order to enjoy the services. E.g. the online services would be useful to the customer
only if the customer is computer literate.
Other Challenges:-
There should also be good consultants. CRM is a complex technology which
requires the help of professional who are experienced and have the knowledge about
the CRM systems. GB faced problems with the CRM consultants available in
Greece. They did not have enough experience. The consultants could advice the bank
on which CRM functions to implement and how to implement.
116
6 Chapter Six- Conclusion
6.1 Introduction
This section would summarise the whole investigation undertaken. The research
question will be looked at and the answer summarised. The recommendations and
future areas of study are explained in this chapter.
6.2 Conclusion
This study has been undertaken to investigate the benefits and challenges of using
CRM in the Banking sector. Firstly an in depth literature review was undertaken in
order to understand Customer Relationship Management. There has been research in
this area of study and various authors addressed the benefits and challenges in using
CRM. Even though there a number of benefits using CRM the challenges addressed
are critical to the success of CRM. This study looked at the benefits and challenges
the banking industry would face using CRM. In order to carry out this investigation
effectively a set of questions (checklist) was prepared and answered using seven case
studies of different Banks which have implemented CRM. There were a number of
findings from the case studies. It was found that the most common functions which
were used by the banking sector were the Operational Service Automation and the
Customer Analysis functions. The most common benefits were the efficiency in the
operations within the bank, better understanding and targeting of customers,
retaining customers and the customers enjoyed services which were catered to their
individual services. There were a number of challenges in using CRM which was
found. The important challenges were resistance to change, need for a good project
team and good consultants, challenge in choosing the correct functions to implement
117
and the need to change the organisational structure. These were the main challenges
faced by most of the banks analysed. There were certain other challenges which were
found such as the capability of the technology and the employees‘ ability to use
those functions effectively. It could be concluded that these are the most important
benefits and challenges a banking sector would face.
6.3 Recommendations
The investigation carried out put forward a number of aspects to concentrate on.
Firstly, the change management factor needs to be focussed on. The employees must
be well communicated about the CRM project. The employees need to be involved
in the implementation process, and they should be aware of how they would affect
the CRM project. For this there should be good communication between the project
team, the senior management and the employees.
There should be a good project team who should have enough experience and
knowledge about CRM. The project team should include people from the various
departments where the CRM implemented would have an effect on. There should be
good consultants too. They should have an in depth knowledge about CRM and
about the banking sector. Before implementing any functions of CRM, the bank
should communicate with its consulting team.
The bank should decide on its goals and objectives and according to this the
functions it is going to implement should be decided upon. The bank should decide
on the functions and communicate with the consultants too. The organisational
structure needs to be changed in order to adapt to the new CRM processes. This
should be well communicated with the employees. The employees need to be well
trained to use the CRM functions effectively and they could be rewarded too.
118
If these challenges are addressed then the implementation and using of CRM would
be successful.
6.4 Areas for further study
Even though this investigation has looked into the challenges, there is not much
literature or case studies which address the challenges faced by the banks while
using CRM. CRM, as mentioned earlier, cannot be implemented in one go. It has to
be implemented in a step by step process. The challenges in implementing CRM
have been investigated in this study but there are more challenges which the banks
may face. Most of the research addresses issues in implementing CRM but little on
issues in using CRM. There may be a number of challenges banks might face using
the CRM functions. This has been the limitation of my study. Even though the case
studies mention about the maintenance issues there may be other problems the bank
may face.
This investigation uses seven case studies. There are not many case studies which
could be used as there is not much study on Banks using CRM and this has been
another limitation of my study. Further research into the area of CRM in the banking
sector should reveal some more benefits and challenges of using CRM.
Word Count- 25998
119
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8 Appendix
Links to case studies
Frontier Bank
http://www.emeraldinsight.com/journals.htm?articleid=855048&show=html
Parish National Bank(PNB)
http://www.emeraldinsight.com/journals.htm?articleid=856846&show=html
European Bank (EB)- First Link
http://scholar.google.co.uk/scholar?hl=en&q=Customer+relationship+management%3A+the
+case+of+a+European+bank&btnG=Search&as_sdt=2000&as_ylo=&as_vis=0
HSBC:-
http://docsdrive.com/pdfs/medwelljournals/pjssci/2005/418-427.pdf
Greek Bank (GB)
http://homepages.wmich.edu/~balik/VSE/GreeceFeb06.pdf
Bank of Tokyo Mitsubishi (BOTM)-
http://gbr.sagepub.com/content/3/1/99.full.pdf+html
Retail Bank in Korea -FEB
http://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6V8S-4WTHS22-1-
T&_cdi=5878&_user=128590&_pii=S016792360900150X&_origin=search&_coverDate=0
1%2F31%2F2010&_sk=999519997&view=c&wchp=dGLbVtb-
zSkWA&md5=43c40f745d3e30580cce2a566c31f576&ie=/sdarticle.pdf
125

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Athangarajah THANGARAJAH 090132670

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An Investigation into the Benefits and Challenges in adopting

and using CRM in the Banking Sector

A study submitted in partial fulfilment

THE UNIVERSITY OF SHEFFIELD

Arun Prasad Thangarajah

support given to me.

time on assisting me and giving me advice on this project.

carry out this project.

whenever I needed it the most.

Figure 1- Classification of CRM Functionality ................................................................. 21

Table 1- Benefits of CRM .................................................................................................... 27

introduction to Customer Relationship Management is given. This is done in

question and objectives of this investigation. The methodology used to investigate

structure of the dissertation.

1.2 Introduction to CRM

business environment has been changing continuously from new technology to

changes in customer needs and wants.

changing needs of the customers. That is Customer Relationship Management

10 years and has allowed them to invest in ―relationship-fostering Technologies‖.

to be spent on CRM by financial institutions. This shows the importance given to

CRM by financial institutions such as banks.

as CRM provides opportunities to reduce transactions carried out and ensures

efficiency, cost saving and opportunities to survive in a highly competitive market.

the CRM in banks.

1.3 Problem Statement

profitable interactions with customers and simultaneously making interactions

friendlier through individualization. According to Microsoft CRM is used to

―maximize the profitability of existing customer relationships while driving

efficiency improvements and cost savings‖.

According to Dr. Griffin.T et al (2008), 70% of CRM fails in the implementation

of the Information Systems implementation failed. It is necessary to comprehend that

challenges in achieving a successful CRM implementation and benefits. Successful

implementation needs technical support, organisational capabilities and will, to

achieve the long term goals.

SAS (2001) explains that organisations should consider certain business

requirements before adopting CRM. That is to ―create a Customer-Focused

Profitability of Each Customer Relationship, Understand How to Attract and Keep

Your Best Customers, Maximize Rate of Return on Marketing Campaigns‖ (SAS,

1.4 Research question and objectives

number of questions which would help answer the topic. That is

 What CRM functions are crucial for the banking sector?

 Why banks adopted CRM/what benefits does CRM provide banks?

interpreted as push-button software. Torggler. M (2009) states that there is diversity

functions, including sales and marketing, such as Service, Partner channel

management, Interaction centre, Web channel, Business communications

management, Real-time offer management and Trade promotion management. All

crucial to the Banking sector.

they provide a return on investment.

As explained earlier there a number of factors which lead to failures of CRM in a

and challenges in adopting and using CRM

In summary the objectives of this study could be put forward as follows.

 Conduct an extensive literature review on CRM.

 To create a checklist to answer the research question in different parts

 To explore which functions are useful to the banking sector

 To explore the challenges and difficulties banks encounter when adopting

and using CRM.

1.5 Research Methodology

in an organised manner as follows. Firstly an in depth literature review about CRM

findings for the research questions.

1.6 Structure of Dissertation

description of how the research question is going to be answered.

undertaken on this topic by other authors is discussed.

all the case studies is analysed.