BANKING

SECTOR .intriglucticut

o_CRM

There are a number of reasons why CRM has become so important in the last le} years.
The competition in the global market has become highly competitive, and it has become
easier for customers to switch companies if they are not happy with the service they
receive. One of the primary goals of CRM is to maintain clients. When it is used
effectively, a company will be build a relationship with their customers that can
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last a lifetime. Customer relationship management tools will generally come in the form
of software. Each software program may vary in the way it approaches CRM, It is
important to realize that CR.M is more than just a technology.
Customer relationship management could be better defined as being a methodology, an
approach that a company will use to achieve their goals. It should be directly connected
to the philosophy of the company. It must guide all or its policies, and it must be an
important part ofcustomer service and marketing. It should allow the company to find the
factors that interest their customers the most. A company must realize that it is impossible
for them to succeed if they do not cater to the desires and needs of their customers_
Customer relationship management is a powerful system that will allow them to do this,
The architecture CR.M can he broken down into three categories, and these are
collaborative, operational, and analytical. The collaborative aspect of CRIM deals with
communication between companies and their clients, The operational aspect of the
 architecture deals with the concept of making certain processes automated. The analytical
aspect of CRM architecture deals with analyzing customer information and using if for
business intelligence purposes. Each one of these elements are critical for the success of a CRM
system. A company must learn how to use all three properly. and when they do this
proficiently, they will be able to build strong customer relationships and ensure their
profits for a long period of time, As more businesses continue to compete on a global level,
it will become more important for them to use successful Customer relationship man ag •n
nt lc chn rqu es.

NTEANING OFSRM

Customer Relationship Management is the establishment. development, maintenance and

optimization of long-inn mutually valuable relationships between consumers and the
oreanizations. Successful customer relationship management focuses on understanding the
need and desires or the customers and is achieved by placing these needs at the heart of the
business by interating them with the organization+s strategy, people. technology and
business processes.

Al the heart of a perfect CRM strategy is the creation of mutual value for all the parties
involved in the business process. It is about creating a sustainable competitive advantage by
being the best at understanding, communicating, and delivering, and developing exist in
customer relationships in addition to creating and keeping new customers.

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te approach to the selling
"Customer Relationship Management (CRM) is a co-ordina
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process allowing the various operational. customer contact and sa
functions of an organization to function as a whole."

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Customer relationship management helps ban s
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ain insight of consumer behavior and their
resources. These factors allow them to g values. If
provide better customer service, help sales
CBI works better than the bank can staff close deals
ducts more effectively, make call centers more
faster, cross sell pro efficient, discover new
plify marketing and sales processes and increasing
customers, sim
consumer revenue. It could not happen with just buying software and installing into the
system. In this the bank must decide as what type of customer information that they are
asking. IL has to further decide as to what they intend to do with the information_ After all
these after that the banks decide and run a mode! considered by them simply the best.
Efficiently dealing with all the customers and providing them what they actually need
increases the customer satisfaction. If the customer is satisfied they will always be loyal to
the bank and will remain with the same bank forever resulting in increasing customer base
and ultimately enhancing net growth of banking business_ Installing a CRM system ca.n
definitely improve the situation and help in challenging the new ways of marketing and
business in an efficient manner.. Hence in the era of business every organization should
be recommended to have a full-fledged CRNI system to cope up with all the business
needs. CR11 is a powerful management tool that can be used to exploit sales potential
and maximize the value of the customer to the bank_ Generally. CR,1.1 integrates various
components of a business such as sales, marketing. IT and accounting. This strategy
may not increase a business's profit today or tomorrow. but it will add customer loyalty to
the business_ In the long run, CR1 1 produces continuous scrutiny alike bank's business
relationship with the customer, thereby increasmj the valu ..............of his business_
Although. CRM is known to be a relatively new method. in managing customer loyalty, it
has been used previously by retail businesses for many years_ The core objective of
modern CR5,1 methodology is to help businesses to use technology and human re.sources to
gain a better view of customer behavior, With this, a business can hope to achieve
better customer service, make call centers more efficient, cross-sell products more
effectively, simplify marketing and sales processes, identify new customers and increase
customer revenues. As an example. banks may keep track of a customer's life stays in
order to market appropriate banking products, such as mortgages or credit curds to their
customers al the appropriate lime, The next stage is to look into the different methods or
gathering customers', where and how this data is stored and how it is currently being
used. For instance, banks may interact with customers, in a countless ways via mails,
mails, call centers, marketing and advertising. The collected data may flow between
operational (such as sales and slack systems) and analytical systems that can help sort
through these records to identify patterns. Business analysts can then browse through the
data to obtain an in-depth view of each customer and identity areas where better seRiees
are required.

Broadly, three types of CRNI are adopted by banks:

1) Operation CILM — ln this, CRNI software are used to track and efficiently organize
inbound and outbound interactions with customers including the management of
marketing campaigns and call centers. Operational CRNi supports frontline processes in
sales. marketing and customer senice. automafing communications and interactions with
the customers. They record contact history and store valuable customer in to
ensure a consistent picture of customer's relationship i‘vith the bank that can be retrieved
by staff as per requirement.

2) Analytical CR.NI — It is about analyzing customer information for better addressing

marketing and customer Seri. ice objectives and deliver the richt message to the right
customer at the right time through the right channel. It involves the use of data analysis to
extract knowledge For optimizing customer relationships. The major benefit; of
Analytical CR11 to banks are:

Customer Retention

(b) Fraud Detection

(c) Optimizing marketing efforts as per custo.mer lire time Value

(d) Credit Risk Analysis

(el Segmentation and targeting

(ft Development of customized new products matching the specific preferences and
priorities of customers.

3) Collaborative CR11 — These involve systerm facilitating customers to perform

services on their own through a variety of communication and interactive channels_ It
brings people process and data together and enables channeling of data and information
appropriately to bank staff for proactive decision making and enhanced informed
Ensinmer service and stinnort acliviiies_ It provides a means ni informaiinn sliarino ita all
concerned in timely manner and includes customer as a creator of service. The major
benefits of collaborative CRM to banks are

(a) Providing efficient customer communication across a variety of channels

(b) Online services to reduce customer service costs

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

Thus. CRM can be understood as a catalyst enabling transformation of Banldng

from traditional 'Transactional banking' to 'Relationship Banking' by use of technology,

Nittil of CRNi_jo banks.

Unlike in the past, the banks today arc market driven and market responsive. With the
entry of new players and multiple channels, customers (both corporate and retail) have
become more discerning and less "loyal" to banks_ This makes it imperative that banks
provide best possible products and services to ensure customer satisfaction. To address
the challenge of retention of customers. there have been active efforts in the banking
circles to switch over to customer-centric business model. The success of such a modc.1
depends upon the approach adopted by banks with respect to customer data management
and customer relationship management. Over the years, Indian banks have expanded to
cover a large geographic & functional area to meet the developmental needs. They have
been managing a world of information about customers - their profiles, location, etc.
They have a close relationship with their customers and a good knowledge of their needs,
requirements and cash positions. Achieving customer focus requires leveraging existing
customer information to gain a deeper insight into the relationship a customer has with
the institution, and improving customer service-related processes so that the services are
quick, error free and convenient for the customers. As is proved by the experience, banks
are now realizing that one of their best assets for building profitable customer
relationships especially in a developing; country like India is the branch- branches are in
fact a key channel for customer retention and profit growth in rural and semi-urban set
up. However, to maximize the value of this resource, our banks need to transform
their branches from transaction processing centers into customer-centric service centers.
This transformation would help them achieve bottom line business benefits by retaining
the most profitable customers. Branches could also be used to inform and educate
eustorriers about other, more efficient channels. to advise on and sell new financial
instruments like consumer loans, insurance products, mutual fund products, etc. There is a
growing realization among Indian bags that it no longer pays to have a
"transaction- based" operating model_ There are active efforts to develop a relationship-
oriented model of operations focusing on custorner-eentric services. The big,est
challenge our banks face today is to establish customer intimacy without which all other
efforts towards operational excellence arc meaningless_ The banks need to ensure through
their services that the customers come back to them. This is because a major chunk of
income for most of the banks comes from existing customers, rather than from new
customers. Customer relationship management (CRM) solutions, if implemented and
integrated correctly, can help significantly in improving customer satisfaction levels.
Data warehousing can help in providing better transaction experiences for customers over
different transaction channels. This is because data warehousing helps bring all the
transactions coming from different channels under the same roof. Data mining helps
banks analyze and measure customer transaction patterns and behavior. This can help a
lot in improving service levels and finding new business opportunities.

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Customer relationships are becoming even more important for hanks as market conditions
get harder. Competition is increasing. margins arc eroding. customers are becoming more
demanding and the life-cycles of products and services are shortening dramatically. All
these forces make it necessary for hanks to intensify the relationship with their customers
and offer them the sendees they need via the channels they prefer.

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tion in order to
Cl vimanages to places the customer at the focal point of the organiza
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cater to his needs, satisfy him and thus maximize the profits of the org
it with people, tech
CRM understands the needs of the customer and integrates nology,
the organization and
resources and business, It focuses on the existing data available in
uses it to improve its relationship with customers. CRM uses information and
 analytical tools to secure customer focus. Thus ii is co-mph:lel). essential that banks
implement CRM in order to secure this.

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CRM enables banks to give employee's better training that helps them face customers
easily. It achieves better infrastruk:turc and ultimately contributes to better overall
performance. The byproducts of CRM banking solutions are customer acquisition.
retention and profitability. Banks that don't implement CRM will undoubtedly find
themselves with lesser profitability coupled with a sharp declirr in the minim of
customers.

Satisfurd Cnitniners

It is important to make a customer reel as if he 1 she is the only one - 11115 Will go a long
‘vay in satisfying and retaining them. Bankers need a return on investment and it has been
proved that increase in customer satisfaction more than contributes a fair share to ROl.
The main value of CRM banking lies in satisfaction and increased retention of customers.

f entralibctilannaalion

CRNI banking solutions manage to clearly integrate people, processes and technology.
CRM banking provides banks "kith a holistic view of all bank transactions and customer
information as well and stores it in a single data warehouse where it can be studied later,

CRN1 Banking. 1511lia an -

Banking CRM software meets the needs of banks of all sizes in le= of mining the
at banks that
required accuracy and understanding of customers. Merely assuming th arc
h
considerably smaller in size have a better customer approach and are able to deal wit
their customers in a better manner is wrong.

They are just as much in need of CRM aid as the others. Smal l banks on account !Dia
ution to profits is directly
limited arnouril of money have had to realize that a large contrib the
bank delivers exactly what
result of good customer service. atm makes sure that the the
customer expects.

CusinnErSterczalion
 CRM enables a bank to see which customers are costing them and which are bringing
benefits, CRM provides them with the required analytical tools that will help them focus on
the importance of segregating these two and doing what is required to avail of the
maximum returns. After this segregation is done CRM easily enables banks to increase
their communication and cross-selling to their customers effectively and efficiently.
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CRM solution supports the creation of demand generation through multi-channel and
multi-wave campaigns. The sedation ensures the bank's marketing message is
appropriately personalized and targeted towards the most suitable segment of prospects.
This optimizes marketing efforts and results in greater conversion of prospects
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The solution presents a unified 360P iiiew of the customer, allowing single point access to all
the relationships the customer has forged with the bank. This along with robust
customer analytics effectively supports true relationship banking` providing, a robust
framework for cross-sell opportunities_ CRM solution also integrates with other white
labeled solutions to facilitate contextual and personalized customer engagement, with a
keen focus on right-talk driven right-sell.

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rocesses and business activities,

CRM solution supports business automation for p
ss time. Straight through proc'essin2 abilities
eliminating manual tasks and reducing proce enhance
d processing time, increasing output and enabling
reduction in turnaround an speedy completion
ultilingual Web-based single repository of information
of tasks. The m enables remotely located
to collaborate and transact seamlessly.
bankers
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r ing new-generation technologies, finacle CRM solution is
A Web-based solution leve ag future-proof
an he seamlessly integrated with other enterprise applications_ With a d
and c robust architecture an
proven scalabilitv. it ensures protection for the bank's technology
investments.
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Banks need to is enii fy caSiOMerS, tailor products and services to meet their needs and sell
these producis them. achieves this through Campaign Management by analyzing data
from banks internal applications or by importing dab from external applications to
evaluate customer profitability and designing. comprehensive customer profiles in terms of
individual lifesiyle preferences. income levels and other related criteria.

Based on these profiles. banks can identify the mom lucrative customers and customer
segments, and execute targeted. personalized multi-channel marketing campaigns to
reach these customers and maximize the lifetime value or thosc rchnionsh

Customer Information Cabal Mallon.

Instead of customer in being stored in prmluel centric silos. (for e.g. separate
databases of savings account & credit card customers). with CRM Ow information k
stored in a customer centric manner covering ail the 1014100N or the bank. CRM
integrates various channels to deliver a heist of Seery ices to eusiolucrs., whik aiding the
functioning of the bank.

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Central repository for products, pricing and competitive information, i1.5 well as internal
trainine material. sales presentations. proposal templates and mark ct ing collatcral.

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This means whoever the bank speaks irrespective of whether the communication is
from sales, finance or support. the bank is awa.re of the interaction. Removal of
inconsistencies of data makes the client interaction processes smooth and efficient. thus
leading to enhanced customer satisfaction.

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CRM can provide a single view where Sales Mangers and agents can gel all Ib a most up-
to-date information in one place, including opportunity, account. news, and expense
report information. This would make sales decision fast and consistent.