CRM in Banking Industry

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K.C.COLLEGE

CRM IN BANKING INDUSTRY

INDEX

SR.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

TITLE Executive Summary Introduction To CRM CRM Process Framework CRM Companies Goals Of CRM CRM In Banks Types Of CRM In Banks Evolution Of CRM In Banking Sector Objectives Of CRM In Banks Need Of CRM In Banking Industry Benefits Of CRM In Banks CRM Strategies Adopted In Banking Sector CRM In Banks- Indian Scenario The Past, Present And Future Of CRM Customers As Competitors Challenges of CRM Importance Of CRM In Banking Industry Opportunities Of CRM Key Principles Of CRM CRM Success Factors CRM Implementation Process Impact Of CRM In Banking Industry Innovative Services In Banks Through CRM CRM Principles E-CRM Six E‘s Of E-CRM How Does E-CRM Works Case Study Conclusion Bibliography

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EXECUTIVE SUMMARY
CRM sustainable competitive advantage by being the best at understanding, communicating, and delivering, and developing existing customer relationships in addition to creating and keeping new customers. Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At 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 existing customer relationships in addition to creating and keeping new customers. So the concept of product life cycle is giving way to the concept of customer life cycle focusing on the development of product and services that anticipate the future need of the existing customers and creating additional services that extend existing customer relationships beyond transactions. CRM is a comprehensive approach for creating, maintaining and expanding customer relationship. It provides seamless co-ordination between customer service, marketing, information technology and other customer related functions. It integrates people, process and technology to maximize relationships with all the customers. It does not aim to build closer relationship with all customers, but it recommends that organizations take initiative to identify the most valuable customers by looking for their life time value. CRM means building an interdependent relationship with the customer in which each relies on the other for business solutions and successes. From the Bank‘s point of view, it the management process or approach of acquiring, retaining and growing. The pressures of competitive and dynamic markets have contributed to the growth of CRM in the Financial Service Sector.5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance and brokerage, and 125% in the consumer credit card market. Therefore, banks are now stressing on retaining customers and increasing market share.

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INTRODUCTION
CRM, or Customer relationship management, is a number of strategies and technologies that are used to build stronger relationships between companies and their customers. A company will store information that is related to their customers, and they will spend time analysing it so that it can be used for this purpose. Some of the methods connected with CRM are automated, and the purpose of this is to create marketing strategies which are targeted towards specific customers. The strategies used will be dependent on the information that is contained within the system. Customer relationship management is commonly used by corporations, and they will focus on maintaining strong relationship with their clients. There are a number of reasons why CRM has become so important in the last 10years. 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 able to build a relationship with their customers that can 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 CRM is more than just a technology. Customer relationship management could be better defined as being 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 of its policies, and it must be an important part of customer service and marketing. If this is not done, the CRM system will become a failure. There are a number of things the ideal CRM system should have. 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. It is also important for the CRM system to foster a philosophy that is oriented towards the customers. While this may sound like common sense, there are a sizeable number of companies that have failed to do it, and their businesses suffered as a result. With CRM, the customer is always right, and they are the most important factor in the success of the company. It is also important for the company to use measures that are dependent on their customers. This will greatly tip the odds of success in their favour. While CRM should not be viewed as a technology, it is important to realize that there are end to end processes that must be created so that customers can be properly served. In many cases, these processes will use computers and software. Customer support is directly connected to CRM. If a company fails to provide quality customer support, they have also failed with their CRM system. When a customer makes complaints, they must be handled quickly and efficiently. The company should also seek to make sure those mistakes are not repeated. When sales are made, they should be tracked so that the company can analyse them from various aspects. It is also important to understand the architecture of Customer relationship management. The architecture of CRM can be broken down into three categories, and these are collaborative, operational, and analytical. The collaborative aspect of CRM deals with communication between
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companies and their clients. The operational aspect of the architecture deals with the concept of making certain processes automated.

MEANING OF CRM : Customer Relationship Management is the establishment, development, maintenance and optimization of long term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At 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 sustainablecompetitiveadvantage by being the best at understanding, communicating, and delivering, anddeveloping existing customer relationships in addition to creating and keeping new customers. Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At 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 existing customer relationships in addition to creating and keeping new customers. So the concept of product life cycle is giving way to the concept of customer life cycle focusing on the development of products and services that anticipate the future need of the existing customers and creating additional services that extend existing customer relationships beyond transactions. CRM is a comprehensive approach for creating, maintaining and expanding customer relationship. It provides seamless co-ordination between customer service, marketing, information technology and other customer related functions.
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CRM PROCESS FRAMEWORK
A four stage relationship marketing process was developed by Atul Parvathiyar and Jagdish.N.Sheth. The model suggests that relationship marketing process comprises of four sub processes:  Formation Process  Management and Governance process  Performance Evaluation process  Relationship Evolution or enhancement process. Relationship Marketing Process Framework:

I. Formation Process of Relationship Marketing: The formation process of relationship marketing involves the decisions that must be made regarding the initiation of relationship marketing activities for a firm with respect to a specific group of customers or an individual customer with whom the customer wishes to engage in a cooperative and collaborative relationship. In the formation process, three important decision areas relate to defining the purpose (objectives) of engaging in relationship marketing, selecting parties (customer partners) for relationship marketing and developing program (relation activity scheme) for relationship marketing engagement.
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II. Management and Governance Process: Once a relationship marketing program is developed, the program as well as the individual relationship within it must be managed and governed. For mass market customers, the degree to which there is symmetry in the primary responsibility in deciding whether the customer or the program sponsoring company will be managing the relationship values with the size of the market. However, the programs directed at distributors and business customers, the management of the relationship require the involvement of both the parties. The degree to which these governance responsibilities are shared or managed independently depends on the perception of norms of governance processes among rational partners given the nature of their marketing program and the purpose of engaging in the relationship. Not all relationships are managed alike. However, several researchers have suggested appropriate governance norms for different hybrid relationships.Irrespective of whether relational partners undertake management and governance responsibilities independently or jointly, they must address several issues. These include decisions regarding role specification, communication, and common bonds, planning process, process alignment, employee motivation and monitoring procedures. III. Performance Evaluation Process: Companies need to undertake periodic assessment of the results of relationship marketing in order to evaluate whether or not programs are meeting expectations or whether or not they are sustainable in the long run. Performance evaluation is also useful because it allows firms to take corrective areas of relationship governance regarding continuation, modification or termination of relationship marketing programs. IV. Evolution Process of Relationship Marketing: Individual relationships and relationship marketing programs are likely to undergo change as they mature. Some evolution paths may be planned, whereas others will evolve naturally. In any case, the partners involved have to make several decisions about the evolution of their relationship marketing programs .These include the decisions regarding the continuation, termination, enhancement and modification of the relationship engagement. Several factors could affect any of these decisions. Among these factors, relationship performance and relationship satisfaction are likely to have the greatest impact in the evolution of relationship marketing programs. When performance is satisfactory, partners would be motivated to continue or enhance their relationship marketing program. When performance does not meet expectations, partners may consider terminating or modifying their relationship. When companies can chart out their relationship, they can engage in relatively systematic relationship marketing programs.

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CRM COMPANIES

The Top 10 CRM Manufactures Are: SR.NO 1 2 3 4 5 6 7 8 9 10 COMPANY Microsoft Sage software SAP America Inc. Parature Inc. Entellium Maximizer software Netsuite Inc. Oncontact software ADAPT Software Applications Exact Software North America COMPANY NAME Microsoft Dynamics CRM 3.0 Sales Logix CRM SAP Business One CRM Parature Entellium CRM Maximizer Enterprise CRM Net Suite CRM+ Oncontact V ADAPT CRM E- Synergy

The Price of Playing: 2020software.com SR.NO 1 2 3 4 5 6 7 8 9 10 COMPANY Microsoft Dynamics CRM 3 Sales Logix CRM SAP Business One CRM Parature Entellium CRM Maximizer Enterprise CRM NetSuite CRM+ Oncontact V ADAPT CRM E- Synergy COMPANY PRICE $ 5,000 to $50,000 $ 6,000 + install $ 11,250 + $ 3,000 install $5,000 + install $50 to $60 per user / month $ 499/ user +$7,500 install $ 2,000 to $100,000 $ 1,000 to $1,500 $1,500/ user + $1,200 install $ 5,000 + install

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A little about the top 5 companies: Microsoft: Microsoft‘s Dynamics CRM 3.0 is a CRM system that fully integrates with Microsoft office. For example, from Outlook employees can access Microsoft CRM sales, marketing and customer service modules to make sales decisions, market products, solve problems and get strategic views of the business. Microsoft.com Sage Software: Award-winning Sales Logix is the customer relationship management solution that enables small to medium-sized businesses to acquire, retain and develop profitable customer relationships. Have more than 250,000 users at 7,000 companies worldwide. Saleslogix.com SAP America Inc: SAP Business One is an integrated, affordable, business management solution it provides a true and unified view of operations across customer relationship management, manufacturing and finance. Simple to use yet powerful, SAP Business One puts business users in charge, arming you with the critical, up-to-the minute information sapamerica.com ParatureInc: Performance, security, customization…this is the foundation of a Parature solution. Combining award-winning usability, integrated functionality and global capabilities, Parature applications have earned the trust of over 3,000,000 users. Parature.com Maximizer Software: For over 10 years, Maximizer Enterprise has remained the chosen CRM solution for small to mid-sized businesses. Proven, award winning and flexible enough to meet the needs of companies in any industry, Maximizer Enterprise CRM helps attract prospects, win new customers and increase repeat business – at an affordable price. Maximizer.com

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GOALS OF CRM
Implementing customer relationship management can be costly undertaking. Organisations spent lot of money scrutinizing vendors, buying the right CRM software, hiring, consultant, training employees, etc. The only way in which company can actually measure its success is it establish CRM goals prior to the implementation as in this way it is able to determine whether or not it has successfully implemented CRM. Despite the fact of industry have different business aspects they share common CRM goals. Some of the commonly Established CRM Objectives are as follows: 1) Increase in Customer Service: Establishing customer loyalty as one of your top CRM goals is absolutely fundamental to CRM successful implementation .For this task it is essential that the whole organization realize that they play a part in this goal. This objective cannot be achieved with the help of a few employees only. Customers need feel that they have received excellent service. This ensures their continued patronage. This is by far one of the most essential goals of customer relationship management. Customer retention and brand loyalty is absolutely essential to ensure success. Undoubtedly it is far harder to gain a new customer than to actually keep one. Customer service is the pivotal point around which CRM revolves. 2) Increasing Efficiency: One of the most important goals of CRM is the increase in organization efficiency and effectiveness. This is almost always adopted by every organization. It is necessitated by the fact that increase in efficiency is required to boost success. CRM achieves this through cost reduction and customer retention. Adequate CRM training achieves this goal. 3) Lowering Operating Costs: CRM goals also include the reduction of costs of operation. This goal should be clearly established and conveyed to all those involved in the CRM implementation process. CRM manages to reduce operating costs through a workforce management system. This helps to maximize skills and thus reduce cost. These reduced costs enable an organization to achieve greater efficiency. If cost reduction is management's objective then the CRM implementation should be carried out in such a way that this is achieved. Throughout the process maximum reduction in costs should be adhered to in order to meet this particular CRM goal. 4) Aiding the Marketing Department: Another goal of CRM is generally aiding the marketing department in all its efforts. This includes marketing campaigns, sales promotions etc. If this is fixated as one of the goals of CRM, then it should be communicated to those involved. This goal is fundamental as it boosts sales indirectly thereby increasing the profitability.

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CUSTOMER RELATIONSHIP MANAGEMENT IN BANKS
INTRODUCTION: Today, customers have more power in deciding their bank of choice. Consequently, keeping existing customers, as well as attracting new ones, is critical concern for banks. Customer satisfaction is an important variable in evaluation and control in a bank marketing management. Poor customer satisfaction will lead to a decline in customer loyalty, and given the extended offerings from the competitors, customers can easily switch banks. Banksneed to leverage effectively on their customer relationships and make better use of customer information across the institution. Competition in the financial services industry has intensified in recent years,owing to events such as technology changes and financial industry deregulation.Conventional banking distribution has been gradually supplemented by the emerging use of electronic banking. Many bank customers prefer using ATMs or a website rather than visiting a branch, while technology has also reduced barriers to entry for new customers. CRM--A POWERFUL TOOL: CRM is powerful management tools that can be used to exploit sales potential and maximize the value of the customer to the bank. Generally, CRM 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 term, CRM produces continuous scrutiny of the bank's business relationship with the customer, thereby increasing the value of the Customer‘s 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 CRM methodology is to help businesses to use technology and human resources to gain a better view of customer behaviour. With this, a business can hope to achieve better customer service, make callcenters 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 stages in order to market appropriate banking products, such as mortgages or credit cards to their customers at the appropriate time. The next stage is to look into the different methods customers' information are gathered, 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, emails, callcenters, marketing and advertising. The collected data may flow between operational systems (such as sales and stock 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 identify areas where better services are required.

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CRM AND BANKS: One of the banks' greatest assets is their knowledge of their customers. Banks canuse this asset and turn it into key competitive advantage by retaining those customers who represent the highest lifetime value and profitability. Banks can develop customer relationships across a broad spectrum of touch points such as at bank branches, kiosks,ATMs, internet, electronic banking and call centres.CRM is not a new phenomenon in the industry. Over the years, banks have invested heavily in CRM, especially in developing callcenters, which, in the past, were designed to improve the process of inbound calls. In future, callcenters will evolve to encompass more than just cost reduction and improved efficiency. According to Gartner Group, more than 80 per cent of all US banks will develop their callcenters as alternative delivery channels and revenue centers, to be used for the delivery of existing products and services. But to be successful, a bank needs more than the ability to handle customer service calls. It needs a comprehensive CRM strategy in which all departments within the bank are integrated.Implementing a CRM in banking industry can be very challenging. CRM next optimizes existing customer strategies and makes them future-proof without affecting your bank's flexibility, unlike other banking CRM systems. Our banking solution helps to increase customer satisfaction and boost revenues by streamlining processes on a powerful technology platform which enables transformation from a product centric to a customer centric organization.

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TYPES OF CRM IN BANKS
CRM ARCHITECTURE: Customer Relationship Management (CRM) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner. In many cases, an enterprise builds a database about its customers. This database describes relationships in sufficient entail so that management, salespeople, and customer service reps can access information; match customer needs with product plans and offerings; remind customers of service requirements; know what other products a customer had purchased, etc. Each plays an important role in Customer relationship management and a company that wants to success must understand the importance of using these three components successfully. The Customer relationship management architecture can be broken down into three categories. 1. OPERATIONAL CRM : Operational CRM deals with the automation of certain business processes. Examples of business processes that are connected to operational CRM are marketing and sales. When a connection is made to a customer, the information related to this interaction will be automatically stored in a database, and the company can pull up specific information on that customer when it is needed. Operational CRM can further be broken down into three components. These components are Enterprise marketing automation, Customer service automation, and Sale force automation. The Enterprise marketing automation will give the company information about the business climate, and it will also provide them with crucial data on their competitors, as trends within the industry and other important variables. As the name implies, Enterprise marketing automation deals with strategies accompany can use to strengthen their marketing tactics. Customer service and support will automate specific processes that are connected to service. An example of this could be item returns or customer complaints. Sales force automation will be responsible for automating some of the company's sales task An example of tasks that SFA would automate is demographics, customer needs, and accounting management. A number of corporations will use callcenters to store data on their customers. Once the customer makes a call, the customer service representative can provide them with relevant information. Many companies will also automate processes such as allowing customers to access their accounts. 2. ANALYTICAL CRM: The next important part of CRM architecture is Analytical CRM. As the name suggests, Analytical CRM deals with analysing data that is collected by the company. This data will be analysed so that the company can enhance its customer servicecapabilities. By enhancing its customer service capability, a company will build a stronger relationship with its customers. There are a number of common ways that Analytical CRM is used to achieve this. A number of companies will use the data they've collected and analysed to cross-sell products to their customers, as well as retaining customers that may normally switch to another company. Analytical CRM can also be used to provide important information to customerswithin a short period of time. In addition to building stronger relationships withcustomers, Analytical CRM can be an important tool for fraud prevention and detection. It can analyse the patterns of sales, inventory, and profits in order to find any patterns that are not
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consistent. Analytical CRM is also important when it comes to both product development and risk management. It is important to realize that Analytical CRM is an on-going process. The company may need to alter its strategies or methods based on the information that is analysed through this process. 3. COLLABORATIVE CRM: The third important aspect of CRM architecture is Collaborative CRM.Collaborative CRM is important because it places an emphasis on the interactions that accompany will make with its customers. These interactions could be personal, or they could come through mediums such as the telephone or the Internet. Collaborative CRM will give companies a powerful form of communication that will utilize multipletechnologies.It will also be responsible for providing services over the Internet so that the costs of the service can be reduced. When interactions are made with customers, Collaborative CRM will allow the company to provide them with useful information. At the highest-level, CRM should be an important part of all interactions that a company makes with itscustomers.When this done, a company can become highly successful. The goal of CRM is to find out what customers need, and to make sure those needs are filled. Once a company is making interactions with their customers, they can collect and analyse information. This information can be used to strengthen interactions.

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EVOLUTION OF CRM IN BANKING SECTOR
Regulation and technological improvements are responsible for the vast majority of innovations in banking over the past quarter century. The introduction of personal computers and the proliferation of ATMs in the1970s captured bank management‘s attention. The regulatory changes in the 1980s fueled much of the industry‘s growth, then downsizing as bankers focused on amassing market presence which resulted in significant merger activity. Recent technological improvements are at the root of bankers‘ focus as well as a target for their significant investment dollars today. In fact, according to recent projections, bankers and their financial service company would spend almost $7 billion this year on CRM and increase that by 14 % each year for the next several years. What drove many bankers to invest in ATMs was the promise of reduced branch cost, since customers would use them instead of a branch to transact business. But what was discovered is that the financial impact of ATMs is a marginal increase in fee income substantially offset by the cost of significant increases in the number of customer transactions. The value proposition, however, was a significant increase in that intangible called customer satisfaction. The increase in customer satisfaction has translated to loyalty that resulted in higher customer retention and growing franchise value. Internet banking, a product of the 1990s, shows similar characteristics. Again, bankers invested believing that the Internet was a lower-cost delivery channel and a way to increase sales. Studies have now shown, however, that the primary value of offering Internet banking services lies in the increased retention of highly valued customer segments. Again, the intangible called customer satisfaction drives the value proposition. CRM is not another ATM or Internet bank. It is not a checking account, a stock or a mortgage. CRM is primarily driven by the innovation of technology, but unlike other technological innovations, CRM has power to help bankers quickly and directly improve customer satisfaction. CRM is an added dimension to ensure that what the customer expects is consistent with what the bank is prepared to deliver. One expert in bank CRM initiatives recently said that CRM is an approach that is less focused on providing the right services to the customer than attracting customers who are the right fit for what the bank has to offer. Further, the primary value of CRM is its potential as a customer retention tools.

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OBJECTIVES OF CRM IN BANKS
The idea of CRM is that it helps businesses use technology and human resources gain insight into the behaviour of customers and the value of those customers. If it works as hoped, a business can: provide better customer service, make call centers more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues. It doesn't happen by simply buying software and installing it. For CRM to be truly effective an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. CRM, the technology, along with human resources of the banks, enables the banks to analyse the behaviour of customer and their values. And the main area for focusing are as are the name suggest customer, relationship and management of relationship and the main objective to implemented CRM in business strategy are: • To simplify marketing and sales process • To make callcenters more efficient • To provide better customer service • To discover new customers and increase customer revenue • To cross sell products more effectively The CRM processes should fully support the basic steps of customer life cycle.The basic steps are: • Attracting present and new customers • Acquiring new customers • Serving the customers • Finally, retaining the customers. In today's increasingly competitive environment, maximizing organic growth through sales momentum has become a priority for Banks and Financial institutions. To build this momentum banks are focusing on Customer relationship management initiatives to improve: • Customer satisfaction and loyalty. • Customer insight/ 360º view of customer • Speed to market for products and service • Increase products-to-customer ratio • Improve up sales and cross sales • Capitalizing on New market opportunities

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NEED OF CRM IN BANKING INDUSTRY
Over time, retail bank customers tend to increase their holding of the other products from across the range of financial products / services available. Long-term customers are more likely to become a referral source. The longer a relationship continues, the better a bank can understand the customer and his/her needs & preferences, and so greater the opportunity to tailor products and services and cross-sell the product / service range. Customers in long-term relationships are more comfortable with the service, the organization, methods and procedures. This helps reduce operating cost and costs arising out of customer error, Intense Competition There is intense competition among the Private Sector Banks, Public Sector Banks and Foreign Banks and they are all taking steps to attract and retain the customers. New technologies, research facilities, globalization of services, the flood of new products and the concept of all the facilities under one roof to provide better customer service leading to customer delight. Well Informed Customers the Customers in Banking Industry today are well informed. With the introduction of new technology, the world has become like a small village. Thus, if a Bank wants to have more customers, it should develop a good relationship with its present customers and try to maintain the same in the future also. Decline in Brand Loyalty In the present scenario, brand loyalty is on decline. The customers are switching over frequently to avail the better facilities from other banks. Newer and superior products and services are being introduced continuously in the market. Thus, the banks have to upgrade their products, improve customer service and create bonds of trusts through proper care of customer needs and regular communications. With the help of CRM, strong customer loyalty and a good image for the organization can be developed. Improved Customer Retention In the intensely competitive banking industry, retention of existing customers is vital, which can be achieved through the process of CRM. With increased number of banks, products and services and practically nil switching costs, customers are easily switching banks whenever they find better services and products. Banks are finding it tough to get new customers, and more importantly, retain existing customers. According to a research by Reichheld and Sasser in the Harvard Business Review, 5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance and brokerage, and 125% in the consumer credit card market. Therefore, banks are now stressing on retaining customers and increasing market share.

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BENEFITS OF CRM IN BANKS
Benefits of CRM can be categorized into three groups namely: Benefits for customers, benefits for employees and benefits for banks. (i) Benefits for Customers: With up-to-date customer information, Banks can offer more personalized services. For example 24 Hours banking. omer events and requirements e.g., Education Loans and Tourism Loans. (ii) Benefits for Employees : meet customer expectations. rs. ve higher satisfaction ratings. (iii) Benefits for Banks : relationships and make better decisions.

-selling.

A greater focus on Customer Relationship Management (CRM) is the only way the banking industry can protect its market share and boost growth. A successful CRM strategy aims at understanding the needs of the customer and integrating them with the organization‘s strategy, people, technology and business process. Therefore, one of the best ways of launching a CRM initiative is to start with what the organization is doing now and working out what should be done to improve its interface with its customers. Then and only then, should it link to an IT solution. It does not happen simply by buying the software and installing it. For CRM to be truly effective, it requires a well-thought-out initiative involving strategy, people, technology, and processes. Above all, it requires the realization that the CRM philosophy of doing business should be adopted incrementally with an iterative approach to learn at every stage of development. Most widely accepted classification of Customer Relationship Management (CRM) systems includes operational, analytical, collaborative and e-CRM. While operational, collaborative, and e-CRM has received a significant interest among practitioners and scholars, but analytical CRM has been mostly neglected by them. The major function of analytical CRM is to support strategic customer information provision and customer knowledge acquisition to help achieve the final goal of CRM which is to enhance customer profitability. Customer profitability is the difference between revenue and costs.

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CRM STRATEGIES ADOPTED IN BANKING SECTOR
 One-Stop Financial Supermarket: Right service is offered to right customers. Faced with growing complexity in financial products, more and more customers are expressing a needed for a "trusted financial advisor" to help manage their financial affairs. As the primary financial services provides to most consumers, banks are particularly well positioned to capitalize on this needed, which promotes a greater receptivity to the one stop shopping concept. The ATM can be accessed around the clock and safety is also more. The number of customer transaction is increased and it is used at any place. There are no of credit cards offering variety of services according to their nature and it help them to raise easy credit facilities and proof to disputes in legal case. Master card is a card of master money card. Some banks issue one some the other. Banks are replacing plain old ATM to this card which help the customer to use even in restaurants and gas stations. Smart cards are a card with chip technology contains all the information about its holders. Smart card replaces and does the work of all the cards. High memory, portability and reliability make the smart cards more useful for the customers. The stock exchanges dealing are done through Demat and Remat A/C. In the developing countries like India the customer's awareness towards this product is in growing stage. Ancillary services like e-broking. e-shopping and on-line ticket booking are also enjoyed by few customers.  Increasing the Number of Delivery Channels to the Customers: Banks have realized that shifting customer access to lower cost channels can help in bring down the operating cost. These channels are used not only to improve service but also to divert traffic from branches. It is a fact that the cost of the transactions over the delivery channel is lower than doing the transactions through branches. The ATM and Net Banking Services enable Non-Stop Banking -Convenience Banking 24 hours access to cash -365 days of the year without any additional cost burden to the customer. The Real Time Gross Settlement (RTGS) Scheme is being implemented in a phased a manner after which the collection of cheques will be smooth and quicker. The CBS (Core Banking Solution) implementation will lead to instant collection of outstation cheques without delay. Customer to the Branch is moved to Customer to the Bank in major cities and it has reduced time to non-entity. The use of Plastic money has increased in sky rocketed pace as a result of which the transaction have become easier and speedier without actual use of cash. The concept of Virtual Banking has also gained ground.  Customer Value Management: CRM solutions if implemented and integrated correctly can help significantly in improving customer satisfaction levels with accrued benefits. Data warehousing can help in providing better transaction experiences for customer over different transaction channels. The data mining helps banks analyse and measure customer transaction patterns and behaviours'. This can help a lot in improving service levels and finding new business opportunities. The main thrust of CRM is to develop new products, render value creation, gain market leadership and spread risks and vulnerabilities besides facing competition. Any bank would have a huge customer
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base that it would not be able to monitor it manually in order to find out various customer behaviour trends and patterns. It is essential to attract, retain and grow customer base with effective management of the information about the customers and enhance the relationship with them. The value proposition however a significant increases in that intangible called customer satisfaction. The increase in customer satisfaction has translated to loyalty those results in higher customer retention and growing franchise value. Unless the banks understand the needs of the customer, best technology products benefiting the customer cannot be designed. Hence the CRM and technology go hand in hand supplementing each other needs and convenience. Once the customer needs are understood and technology product orientation becomes easy for value creation process. As the banking industry thrives on the services rendered, it becomes necessary to imbibe the "PQRST" strategy to maintain CRM, where P: Peace of mind for the customer Q: Quality of service rendered, which should commensurate to the expectations of the customer R: Respect to be given to the customer irrespective of his economic background S: Sincerity in the discharge of duties to the customers, with a personal touch T: Time bound-which plays a vital role for the customer to have a pleasant experience In experiencing "PRIDE" while dealing with customers where P: Personal involvement is taken up by the agency R: Leading to responsibility for the actions of the team members I: In D: Delivering E: Excellence in the service rendered Still some drawbacks are in CRM implementation due to various reasons might not have the desired results. There could be a lack of commitment from people within the Banking industry to the implementation of a CRM solution. Adapting to a customer-focused approach may require a cultural change. There is a danger that relationships with customers will break down somewhere along the line, unless everyone in the business is committed to viewing their operations from the customers' perspective. The result is customer dissatisfaction and eventual loss of revenue. Poor communication can prevent buy-in. In order to make CRM work, all the relevant people in your business must know what information you need and how to use it. Weak leadership could cause problems for any CRM implementation plan. The onus is on management to lead by example and push for a customer focus on every project. If a proposed plan isn't right for your customers, don't do it. Send your teams back to the drawing board to come up with a solution that will work. In the cut-throat competition,now the banks moved to the next era CRM+ which provides 360 degree view of all customer data and customer interaction.

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CRM IN BANKS – INDIAN SCENARIO
One industry best suited for the implementation of CRM is the Indianbanking and financial service, which has the highest growth potential andaccounts for 22% of CRM license revenue in 2002. Banks such as ICICI bank, HDFC bank and Citibank are using CRM products. ICICI bank, in fact, has won the DM review World Class Solution Award in 2003 in thebusiness intelligence category for its Teradata enterprise data warehousesolutions.However, CRM market in India is still in a nascent stage. Indian bankshaven‘t yet seen big results from CRM solutions, probably because ofimproper implementation. Being short – sighted, they have adopted newtechnology without a clear understanding of how to integrate it with theexisting system and processes. Indian Banking Industry should aim to formulate strategies incorporatingpeople, processes and technology issues. In accordance with the strategies, current and future IT initiatives can be formulated, prioritizing the related activities and their feasibility. Once this is done, implementation in a phased manner will definitely lead to organization‘ssuccess in achieving the goals.

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THE PAST, PRESENT AND THE FUTURE OF CRM
THE PAST 1960’s:-The era of mass marketing. 1970’s:-Saw the beginning of segmentation, direct mail campaigns and clearly telemarketing. 1980’s:- Where niche marketing made millionaires of those who were best at it. 1990’s:- Relationship marketing, the explosion of telemarketing and callcenters all setup to develop relationships with the customers, the recognition of the true value of retention and the use of lifetime value as a business case. It is possible to draw further information definition of marketing and direct marketing. MARKETING:―Determining the needs and want of target markets and deliv ering the desired satisfaction more efficiently and effectively than the competition.‖ DIRECT MARKETING:―The planned recording, analysis and tracking of customers direct response behaviour over time…in order to develop future marketing strategies for l ong term customer loyalty and to ensure continued business growth.‖

THE PRESENT
The key differences between the concepts of marketing and direct marketing is that CRM is about change throughout the organization (focused around customer) and that technology developments are enabling the concept. What we are finding is that the organizations are now moving through several stages of CRM.

STAGE SATISFACTION BASED

STATE RE-ACTIVE

CULTURE Meet customer needs. Respond to complaints. Minimal evaluation of customer service level. Evaluate customer perception. Identify customer retention factors. Evaluate customer needs. Continuous improvements.

PREFORMANCE BASED

PRO-ACTIVE

COMMITMENT BASED
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THE FUTURE
        Customers will play a significant role in managing relationships service models will continue to change (skills, remuneration, volume, transaction types) The web will create globalization but will replace the need for people, at least not for the foreseeable future. Technology will consolidate (fixed and mobile telephone, email/ web/ecommerce). Develop end to end customer processes. Make the best possible use of customer information – particularly when you are transacting with them. Be interactive. Use your people. Recognize customer individuality.

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CUSTOMER AS COMPETITORS
Although managers can regard the customer as a source of competence, they also have to face the reality that the customers are becoming their competitors. Customer can extract value in ways that were unimaginable even three years ago. In the traditional marketplace, companies had far better access to information than individual consumers did. That allowed companies to set prices based on their cost or their perception of the value of their products & services to their customers. But thanks to the internet, customer & companies now have much the same information available to them, & there has been a consequent shift in power. Armed with knowledge, customers are much more willing to negotiate terms & prices with companies. It‘s perfectly feasible for a customer to approach a bank & say, ―I will always leave a $5,000 balance in the bank. These are the services I want free in return for this commitment.‖ In some cases, customers even assess their own lifetime value to a company & use the knowledge to bargain for better terms. It‘s not just the way that consumer judge & negotiate the prices for the product that‘s changing; it‘s the price setting mechanism itself. Customer will pay according to her needs rather than according to the companies need. Managers everywhere will have to get used to the idea that they are price takers as well as price makers.

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CHALLENGES OF CRM
 Cross-Organizational Participation One of the greatest challenges of CRM is that a company-wide CRM program inherently involves participation from members of departments across the entire organization. This stimulates cooperation and communication, but putting this into practice is difficult. The website CRM Info line stated in 2010 that "only one in every six companies that have installed CRM have been successful." This demonstrates the challenge in getting all departments and employees on board with CRM, which is necessary for long-term success.  Technology Stigma One of the most often cited challenges for companies implementing CRM is the common misconception that CRM is technology-driven, or worse, that it is simply a technology. CRM is supported by a technological infrastructure, including software solutions used to gather, analyse and interpret customer data. However, these technological capabilities alone do nothing to make companies successful.Bo Chip man, a senior director of account management, indicated in his May 2010 "Direct Marketing News" article that CRM requires a clear and thoughtful strategy with cross-organizational integration.  Data Security Just like many other software systems, the CRM solution brings the challenge of managing consumer data. If a company chooses a CRM solution that is hosted by another company, the company needs to be even surer that consumer data and company data are secure.  Integration Another challenge is how the CRM solution is integrated with existing software systems that automate other functions in the organization. For example, the company may use a database solution to manage all accounting functions. If the CRM solution can interface with the company's accounting software system, more data analysis can be performed, according to Norton. However, the organization must manage the cost of initial integration, maintenance costs and future updates.  Financial Returns One challenge for businesses that invest in a CRM solution is how to measure financial gains, according to Dana Norton of Tech Republic. Norton compares this dilemma to an earlier dilemma for finding the ROI for enterprise resource planning (ERP). If a company is going to pump thousands or millions of dollars into CRM software, the financial analysts in the organization should beable to show how the company is generating more profits from tracking customer data.

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IMPORTANCE OF CRM IN BANKING INDUSTRY
CRM is an acronym for Customer Relationship Management. CRM is implemented to enhance customer relationships by learning about the customers' demands and buying patterns.Customer relationship management, or CRM, is very important to the banking industry.  Goal The primary goal of CRM is to help companies realize the customers' needs and their value.  Profit CRM can help a business boost its profit margin by meeting customers' needs with the correct products and services.  Customer Service CRM helps a business understand its customers very well.  Increase in sales CRM enables sales people to close deals more rapidly by empowering them with information about customers' needs.  Insight CRM helps you to evaluate your customers and their needs pertaining to your business.  Customer Satisfaction Delivering a better total customer experience has been a primary goal of CRM programs. In banking, this caused bankers to add ATM machines and Internet banking. The result was improved customer retention and loyalty. These results prompted more banks to explore the benefits of a CRM program.  Bundling Bundling of services has become common in financial services. Banks not only want to retain customers but try to leverage relationships through bundling of services. CRM solutions help banks maintain individual views of customer accounts in order to offer the best customer value, to offer upgrades and additional financial products, and to analyse customer data for relationship-building and marketing.  Customer Benefits For many customers, a strong banking relationship is as vital as any other business relationship they maintain. This gives CRM-driven banks an advantage in that customers want the benefits of a solid relationship.

OPPORTUNITIES OF CRM
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Customer Resource Management (CRM) is a type of software solution that businesses use to track information about customers. Some challenges and opportunities arise from finding a return on investment (ROI) for the cost of hiring an IT company to develop a CRM solution.  Predictability Norton touches on one benefit of using the CRM solution. The company should be able to use its system to forecast what loyal customers are going to buy in terms of future products or services. Tracking customers through CRM gives the company a specific target audience for its marketing and advertising campaigns. How will the company use its customer data to bring specific messages to people who will buy?  Sales Strategies Christian Espinoza highlights another opportunity for companies that use a CRM solution. On the sales side of the organization, the management team can use data reports pulled from the CRM to design new selling strategies. For example, they can decide how their sales employees will use contact information for existing and former customers to generate new sales, especially after the initial rollout of a new product.

KEY PRINCIPLES OF CRM
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A good CRM solution should allow for:  DIFFERENTIATING CUSTOMERS Most CRM systems allow for very little freedom to customize to specific industry verticals. Since the customer‘s needs emerge from the products and offerings of the industry, CRM system should respond to the customer needs. Understanding each customer becomes particularly important. And the same customers‘ reaction to a cellular company operator may be quite different as compared to a car dealer. Besides for the same product or a service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer. CRM needs to understand while differentiating customers is : Sensitivities, Tastes, Preferences and Personalities.  Lifestyle and age.  Culture, background and education.  Physical and physiological characteristics.  DIFFERENTIATING OFFERINGS CRM solution needs to differentiate between a low value customer anda high value customer:  Low value customer requiring high value customer offerings.  Low value customer with potential to become high value in near future.  High value customer requiring high and low value service.  KEEP EXISTING CUSTOMERS Grading customers from very satisfied to very disappointed shall help the organization in always improving its customer satisfaction levels and scores. As the satisfaction level for each customer improves so shall the customer retention with the organization.  MAXIMIZING LIFE TIME VALUE By identifying life stage and life trigger points by customer, marketerscan maximize share of the purchase potential.  INCREASE LOYALTY It is an endeavour of ant corporate to see that its customers are advocatefor the company and its products. Any company will like its mindshare status from being a suspect to being an advocate. Suspect-----prospect-----customer client----supporter-----advocate.Customers have to invest in terms of its product and service offerings toits customers. It has to innovate and meet the very needs of its customersso that remain as advocates on the loyalty curve. Referral sales invariably are low cost high margin sales. It has also the implication of being not ―on time scale‖. Besides, referral sales are likelyto induce more satisfaction.

CRM SUCCESS FACTORS
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While clear intention fuels the power of CRM, there are several other success factors to consider. Organizations that implement CRM with a strong return on investment share these characteristics. 1.Strong internal partnerships around the CRM strategy: CRM is a way of doing business that touches all areas of your organization. This means that you and your management peers need to form strong internal partnerships around CRM. Let them know that you appreciate what they have done. Let them know what data you have to offer and help them understand how you plan to use the data you request from them. 2. Employees at all levels and all areas accurately collect information for the CRM system: Employees are most likely to complyappropriately with your CRM system when they understandwhat information is to be captured and why it is important. Theyare also more likely to trust and use CRM data when they know how and why it was collected. 3. CRM tools are customer- and employee- friendly: CRM tools should be integrated into your systems as seamlessly as possible, making them a natural part of the customer service interaction. 4. Report out only the data you use, and use the data you report: Just because your CRM tool can run a report doesn‘t mean it should. Refer back to your CRM strategy, and then run the data you will actually use. And share that data with your team. 5. Don’t go high-tech when low-tech will do: Organizations that successfully implement CRM look for the simplest solution when implementing their CRM strategy. A low-tech solution that works for the people who actually use it is more effective than a high tech solution that is cumbersome, costly and apt to be discarded or inconsistently implemented.

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CRM IMPLEMENTATION PROCESS
Implementing an improved CRM can increase productivity. The implementation of a new customer relationship management (CRM) system can have wide-ranging benefits for any organization. Preparation, installation, customization and training form the bulk of work when installing or upgrading a CRM.  Data Part of the CRM implementation process involves identifying the data that must be transferred or recorded to the new system. This allows proper setup of the database before entering new information and makes it easier to transfer data from one database to another if necessary.  Installation Implementing a CRM can result in a complex installation process involving server and client computers. It may also involve integrating the CRM system to the broader enterprise resource planning (ERP) system. Customizing the database according to an organization's requirements takes place once basic installation is complete.  Training The last part of the CRM implementation process involves training users on the new system. Without proper training, the CRM will fall out of use and into disrepair, making the implementation process futile.

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IMPACT OF CRM IN BANKING INDUSTRY
In the Post liberalization the banking industry was adopting push strategy in selling their products and the importance is not given in serving the customers. But in progressive liberalization, the Narashima committee has implemented sea-changes in the banking reform in 1991. Banking Industry revolves around three basic features being: 1. Intangibility: Unlike a product which can be seen and benefits derived accordingly, the banking industry thrives practically on the quality of the services rendered. The experience of the customer determines the growth of the business. 2. Variability: The present day customer is impatient and is highly demanding and dos not compromise on the quality of the service rendered, as he expects that high cost equals high quality and vice versa. 3. Satisfiers: Unlike the manufacturing industry that wholly depends on the tangibility and extrinsic factors, the service industry is totally dependent on the intrinsic and extrinsic factors, which have a close earring on the core benefits.It is obvious from these features that the customer is the fulcrum for the banking industry and any initiative adopted for its growth is to be aimed at, for and through the customer. And the banks to be competitive it build up a strong CRM by convergence model in the financial industry and financial liberalization.CRM about a business strategy, which drives changes in the banking and work processes, enabled by information technology. Banking institution must initially develop a strategy to understand and anticipate the need of the current and potential customer base.

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INNOVATIVE SERVICES IN BANKS THROUGH CRM
Banks have made several innovations by using the CRM System such as:           The introduction of ATMs. Biometric ATMs. Single Window Service. Teller System. Internet Banking Introduction of Plastic Money: Credit Card, Debit Card, Smart Card. Mobile and E-Mail Alerts Electronic Cash Introduction of two in one Accounts. Introduction of new loan schemes as per the customer‘s needs viz. Education Loans,Marriage Loans, Housing Loans, Personal Loans, Vehicle Loans, Furniture Loans,Renovation Loans and Tourism Loans.

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CRM PRINCIPLES
The main principles of CRM can be grouped into seven guiding factors: 1. Customer focus The first and foremost important guiding principle in CRM is customer focus. Who is customer? This question is very fundamental. Customer is a person or group of persons who receives the product or service—the final output of a process or group of processes. A customer is the final arbiter of quality, value and price of a product or service. A satisfied customer only assigns value to a service, on the contrary, to a dissatisfied customer a product or service has no value, even if the concerned service or product has been designed with lot of effort, energy and cost after a thorough planning. A satisfied customer motivates his fellow members to go in for the service or product that he has already acquired. But a dissatisfied customer always counsels his friends, and fellow members not to go to banks where his experience proved to be wrong or other-wise. So customer‘s delight or customer‘s satisfaction is the essence of any CRM program. 2. Leadership Persuasion, judgment and decision-making abilities are the main attributes of quality leadership. When there is a slight chance of getting a business but the client ishe sitting or in a fix, or not in a position to decide properly, it should be followed up by the relationship manager by patient hearing, mild counselling and to stand by theside of the prospective client to help clear his doubts and to make him feel happy byrealizing that he is going in the right direction and he is very right in choosing hisrequirements.The following points may be found helpful in this regard:(a) It is to be communicated to all employees that all customers should be given a proper hearing and it should be supported from all levels. (b) Ways and means should be identified and practiced of getting and staying closer to customers. (c) Proper respect should be extended to the customers. All relevant in format is on should be collected from them with humble and polite approach. Proper value should be given to their feedback. (d) There should be proper re-action to the information and feedback provided by the customers in designing, developing and providing desired products at affordable cost. 3. Process approach A process transforms an input into desired output by the use of resources, energies and time. In producing an output there may one single process or a group of interrelated processes. In case of inter-related processes, often the output from one process directly forms the input tothe next for effective functioning of an organization, it has to identify and manage numerous linked activities with the help of different processes for accomplishing its goal. Proper attention should be given to the following points: (a) All processes should be de-signed keeping in view the requirements and desires of the customers, within the policy, resource availability, strategy of the company. (b) All processes should meet the legal and statutory requirements to perform the activity or deliver the product or service.

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(c) Time involved in processing should be minimum with least waiting timeto the customers. If required delegation of authority and assignment of account-ability at various executive levels should be addressed, revised and fine - tuned to meet the requirements. (d) All the processes should be properly integrated to meet the goal congruence and should not function at cross-purpose. (e) There should be in built control mechanism for ease of measuring, reviewing and taking corrective action. 4. System approach Customer‘s requirement is one level of commitment. That level implies a system that is reactive and provides to customers what they want but the target should be to achieve more and to exceed the customer‘s expectation to accommodate future requirement and to build a cushion against the competitors‘ attributes. CRM denotes the management of the entire system and is not confined to only one or the other sub-systems or functional departments. CRM is based on a system approach to management. Its primary objective is to increase value to customers on a continuous basis by designing and improving organizational processes and systems on on going basis. Meeting each sub-system may have its own goal but the goal and objectives of all sub-systems are to be integrated to achieve the overall goal. There may be one sub-system to acknowledge the customer‘s order, a separate one to deliver the product within the delivery schedule, another sub-system to comply with the complaints of the customers etc. but all directed to accomplish the goal —value to the customers. The total system as a whole should decide what product to make or what service to offer, what should be the quality involved, what should be the price, what markets and customers to target upon and similar other issues. 5. Involvement of people The fundamentals of CRM bear the genes of customer relationship through involvement of people, i.e., the work-force at the disposal of the organization. The whole gamut of CRM is f or the people, of the people and by the people. People involvement at all levels is essential for the success of a CRM program. The bank managers and staff must be in a position to exploit the concept of customer relationship completely. Customer relation may be defined as that dimension of relationship marketing that seeks and ensures customer loyalty by fulfilling promises and continuing to satisfy customer‘s wants and needs so that defection is zero. It comprises of three levels of relationships; financial relationship, social relationship and structural relationship. The main focus of financial relationship is frequency marketing programs based on financial incentives such as reduction of processing fees, lower rate of commitment charges, organization of loan meal on special occasions etc. A social relationship program revolves round a social bonding between company and its customers and establishes brand loyalty. Bankers, nowadays, make house calls, offer different services outside their for-mal activities, share the feelings and emotions of clients and even send clients flowers on birthdays and anniversaries. A marketing relation with the middleman and interested groups is developed in inside-outmanned mainly based on software, which would help in data warehousing, data mining and data analysis. The optimization of structural relationship lies in the replacement of physical resources by total service replacement. Drawing of moneythrough ATMs instead of physical presence in the branch for withdrawal of cash throughcheques or withdrawal forms may be sited as
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example. To obtain the full benefits of people involvement, the human resource management should focus on employee empowerment, productivity linked rewardand zero defeat service oriented training and total quality management. 6. Mutually beneficial customer relationship The relationship with the customer should be based on a mutually beneficial relationship. A bank should not concentrate its attention towards earning ofProfits only, but focus should be directed to customer‘s wealth creation or value enhancement with the motto of earning through service. As an example we can talk of a savings account that‘s ‗fixed up‘ to give you more interest. It ensures that any balance in your savings account above a certain amount, say, Rs3,000 automatically gets transferred to a fixeddeposit to give you higher returns, which will be swept back into your savings account, when you need it. Sometimes, other benefits are also extended, such as, free personal accident insurance coverage along with fixed deposit scheme above a certain amount and above certain term. Banks are no more restricting their activities to deposit and advances; rather they work with the mot-to of offering ‗Integrated Total Package Solutions to all needs of a customer. Banks have gone to the extent of booking cinema tickets, paying utility bills, school fees etc. for the ease of their clients who are very busy and do not find time for such work. Many of such activities are not profitable in terms of time and efforts spend by the bank. But banks are carrying out such services for mutual benefits, which pays in the long run. Wealthy individuals are in the habit of placing all sorts of demands on their private bankers and a bank has to respond to such requests not me rely for income generation but as a gesture of goodwill and at times such activities add a considerable percentage to a bank‘s fee based income. According to an estimate, a bank can earn Rs35, 000 to Rs100,000 per annum for a good customer. But generally it is found that earnings start after the first two- three years of dealing with the customer. In a mature relation-ship, such fee-based income is a regular feature and is very much crucial in today‘s banking where interest spread is getting reduced due to competition and fee based income can increase the bot tom line. But in many instances, the expenses in terms of time, effort, recognizing individual‘s needs and offering a customised investment solution are high. Retention of customers and building a long lasting relationship is the main criteria under this concept. 7. Continual improvement Another objective of CRM is the efforts towards continuous improvement in the customer relationship through the provision of value added services at favourable cost. Business processes in the areas of finance, system integration, human resource management etc. are to be automated and optimized with an into increase the efficiency and effectiveness of operations. The most effective way of improvement lies in innovation and change management. Today‘s successf ul organizations must stimulate and foster innovation and master the art of change. Organizations that maintain their flexibility, spontaneity and unpredictability, continually improve their quality and, beat their competitors to the market place with a constant stream of innovative products and services, will Bethe winners. The major areas to be targeted are: (i) Improving the effectiveness of marketing. (ii) Implementing multichannel trigger driven marketing. (iii) Implementing a strategic analysis capability to support strategic decision making.

ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT
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E-CRM is an integrated online sales, marketing and service strategy that is used to identify, attract and retain an organization‘s customers. It describes improved and increased communication between an organization and its clients by creating and enhancing customer interaction through innovative technology. E-CRM provides a high degree of self service to the customers, using the internet technologies, by understanding customer‘s needs and personal preferences. E -CRM integrates all the communication from and to the customer from various channels both, the traditional and latest technology based. For e.g., if the customer prefers to use emails and not telephone, the organization will ensure this while dealing with the customer.E-CRM (Electronic Customer Relationship Management) expands the traditional CRM techniques by integrating new electronic channels, such as Web, wireless, and voice technologies and combines it with e-business applications into the overall enterprise CRM strategy. The goal is to drive consistency within all channels relative to sales, customer service and marketing initiatives to achieve a flawless customer experience and maximize customer satisfaction, customer loyalty and revenue. Therefore, it is just an expanded, integrated version of CRM. Thus, Old CRM + Internet = e-CRM. Designed for fronted as well as backend applications through ERP, data mart and data warehouse. Here, browser is the customer‘s portal to e CRM.They make companies close to the customer. Provide best interaction between marketing, sales, service and support.Eliminates and reduces the disconnections between customer and company.The e-CRM or electronic customer relationship management encompasses all the CRM functions with the use of the net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms of managing relationships with customers making use of information technology (IT). E-CRM is enterprises using IT to integrate internal organization resources and external "marketing" strategies to understand and fulfil their customer‘s needs. Comparing with traditional CRM, the integrated information for e-CRM intraorganizational collaboration can be more efficient to communicate with customers.

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THE SIX “E’s” OF E-CRM
1. Electronic channels: New electronic channels such as the web and personalized e-messaging have become the medium for fast, interactive and economic communication, challenging companies to keep pace with this increased velocity. E-CRM thrives on these electronic channels. 2. Enterprise: Through E-CRM a company gains the means to touch and a shape a customer‘s experience through sales, services and corner offices whose occupants need to understand and assess customer behaviour. 3. Empowerment: E-CRM strategies must be structured to accommodate consumers who now have the power to decide when and how to communicate with the company. Through, which channel, at what frequency? An E-CRM solution must be structured to deliver timely pertinent, valuable information that a customer accepts in exchange of his/her attention. 4. Economics: An E-CRM strategy ideally should concentrate on customer economics, which drive smart asset-allocation decisions, directing efforts at individuals likely to provide the greatest return on customer communication initiatives. 5. Evaluation: Understanding customer economics relies on a company‘s ability to attribute customer behaviour to market programs, evaluate customer interactions along various customer touch point channel, and compare anticipated ROI against actual returns through customer analytic reporting. 6. External information: The E-CRM solution should be able to gain leverage information from such sources as third party information networks and web page profiler application.

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HOW DOES E-CRM WORK
In today‘s world, customers interact with an organization via multiple communication channels – the World Wide Web, call centers, field sales people, dealers and partner networks. Many organizations also have multiple lines of business that interact with the same customers. E-CRM system enables customers to do business with the organization the way the customer wants – anytime, via any channels, in any language or currency – and to make customers feel that they are dealing with a single, unified organization that recognizes them every step of the way. The E-CRM system does this by creating a central repository for customer records and providing a portal on each employee‘s computer system allowing access to customer information by any member of the organization at any time. Through this system, ECRM gives you the ability to know more about customers, products and performance results using real time information across your business.Personalized views based on purchase are possible. System is designed around the customers need. Enterprise wide portals are designed and not limited to a single department. System implementation requires less time and cost.They make companies close to the customers. Provide best interaction between marketing, sales, service and support.Eliminates and reduces the disconnections between customer and company.Several CRM software packages exist that can help companies in deploying CRM activities. Besides choosing one of these packages, companies can also choose to design and build their own solutions. In order to implement CRM in an effective way, one needs to consider the following factors:
    

Create a customer-focused culture in the organization. Adopt customer-based managers to assess satisfaction. Develop an end-to-end process to serve customers. Recommend questions to be asked to help a customer solve a problem. Track all aspects of selling to customers, as well as prospects.

CRM solutions are more effective once they are being implemented in other information systems used by the company. Examples are transaction processing system(TPS) to process data real-time, which can then be sent to the sales and finance departments in order to recalculate inventory and financial position quick and accurately. Once this information is transferred back to the CRM software and services it could prevent customers from placing an order in the belief that an item is in stock while it is not. E-CRM strategy components: When enterprises integrate their customer information, there are three e-CRM strategy components: 1. Operational: Because of sharing information, the processes in business should make customer‘s need as first and seamlessly implement. This avoids multiple times to bother customers and redundant process. 2. Analytical: Analysis helps company maintain a long-term relationship with customers.
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3. Collaborative: Due to improved communication technology, different departments in company implement (intraorganizational) or work with business partners (interorganizational) more efficiently by sharing information.

As the Internet is becoming more and more important in business life, many companies consider it as an opportunity to reduce customer-service costs, tighten customer relationships and most important, further personalize marketing messages and enable mass customization. ECRM is being adopted by companies because it increases customer loyalty and customer retention by improving customer satisfaction, one of the objectives of e-CRM. E-loyalty results in long-term profits for online retailers because they incur less costs of recruiting new customers, plus they have an increase in customer retention. Together with the creation of sales force automation (SFA), where electronic methods were used to gather data and analyse customer information, the trend of the upcoming Internet can be seen as the foundation of what we know as e-CRM today. As we implement e-CRM process, there are three steps life cycle: 1. Data collection: About customers preference information for actively (answer knowledge) and passively (surfing record) ways via website, email, questionnaire. 2. Data aggregation: Filter and analysis for firm‘s specific needs to fulfill their customers. 3. Customer interaction: According to customer‘s need, company provide the proper feedback them. E-CRM can be defined as activities to manage customer relationships by using theInternet, web browsers or other electronic touch points. The challenge hereby is to offer communication and information on the right topic, in the right amount, and at the right time that fits the customer‘s specific needs.

CASE STUDY: STANDARD CHARTERED CRM BANKING ON
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CUSTOMER RELATION
· THE COMPANY Standard Chartered Bank has over 2.2 million retail customers and over 1.3 million credit card customers nationwide. Its products and services include cash management, custody, lending, foreign exchange, interest rate management, and debt capital markets. · IMPEDIMENT Standard Chartered Bank (SCB) previously used Online Transaction Processing (OLTP) system, which facilitated and managed transaction oriented applications. The system was reliable but provided little scope for in-depth customer analysis, which is the key to survive in the fiercely competitive financial marketplace. THE NEED The bank realized that it needed to go a step further and deploy a solution which it can use to analyse the huge volumes of data captured by its OLTP systems. The bank needed to manage and analyse the huge volumes of data captured by its OLTP systems. It had to get the right information, to the right people, at the right time, in order to carry out a number of critical business activities and provide excellent customer service. · RESOLUTION The bank's IT team looked at the business requirement in detail and deduced that the organization needed a data warehousing and analytical solution that would help analyse customer data to enable fact-based decision making in areas ranging from acquisition and risk management to cross-selling and portfolio management. The bank created a team of 25 people in Bangalore and called it a Business Intelligence Unit. This unit was responsible for deriving and implementing strategies to analyse and exploit customer data. The company evaluated a number of solutions and SAS was chosen as the preferred solution partner and SCB today relies on SAS solutions across Asia for its customer analytics. · THE SOLUTION SCB decided to go for SAS Customizable CRM Solutions to address its business needs. SCB uses SAS Customizable CRM Solution to adopt a truly customer centric approach to manage its business. It means that fundamental decisions on strategy and resource allocation must be based on a detailed and accurate understanding of customers and the overall market. · · THE BENEFITS The bank can now exploit changing and widening markets; implement a customercentric approach; concentrate on financial budgeting, cost control, and risk management; and figure out new ways to minimize costs, while increasing profitability and shareholder value.

QUESTIONS:
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My discussion regarding CRM in Banking was with Ms.ShyamalaBorkar, Head, Client Services Group - India Commercial Banking, Standard Chartered. It was an enlightening experience for me. She gave me all the valuable information regarding the various CRM strategies adopted by SCB and the various techniques adopted by the bank to manage its customers effectively. 1. What are the CRM Strategies that Standard Chartered Bank follows? Why is it essential? --To address the drawback of the current query system, we are going from the manual to the web based system as a part of SCB group strategy, which is user friendly, and easy to access. 2. How do you segment and identify your customers? --Basically we have three segments of customers they being PLATINUM, KEY and CORE. Also based on their A/C No. We use some caller verification code, Address, PAN card No. etc. as it is easy to identify them. We have (CIC) Client Identification Code which is unique. 3. Is customer satisfaction a part of your banks vision? --Yes, our vision is to have customer delight and ―To be a service partner with our clients delivering simply first class service‖. We believe in going beyond Call of Duty. 4. Strategies followed to enhance customer loyalty --Segregation of services based on KEY and CORE client segments, such as customized services and normal services. We have · Dedicated telephone No. for KEY clients, · Dedicated key service managers, · Proactive calling with clients, · Specialized services. 5. Do you maintain a complaint management / feedback system? --Yes, it is very imperative. Our Complaint and Feedback system is called as COMMAND. SCB tracks all complaints on a daily basis. We have (TAT) Turn Around Time which enables us to solve the complaints within 8hrs time. 6. Do you regularly make up an inventory of all the needs and expectations of your customers? --Yes, this happens during monthly service review visits and feedback from our sales team.

7. Do you know what it costs when you lose a customer? --We believe in a well-built strategy that helps SCB to retain its existing customers. Hence SCB does not lose a customer time and again. It is about 0.1%.

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8. Do you have an up-to-date databank in which all characteristics of your customers are registered? --Yes, our system is a core system which covers all the profile and characteristics of our clients and it is stored in this system. It is based on · Nature of business · Authorized signatory · Source of business · Line of business 9. Are customer complaints replied to within a day and solved within a day or two? Does top level management also personally handle complaints of your customers? --Yes, SCB has (TAT) Turn Around Time with the help of which complaints are solved within 8 working hours. 95% of complaints are solved within 8hrs and 5% are Holding Reply as they are investigation related but are solved within 2 days‘ time. --Yes, all the employees are involved in complaint management process and personally handle the complaints of customers and are registered in the Command system. 10. Do you identify where improvements are needed from then customers perspective? --Yes, we do. Improvement areas are identified by the way of · Service review & Customer visits · Command system · Feedback from sales team

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ICICI BANK
Introduction: ―With the overall improvement in the ETL process made possible by Power center, we benefited from greater data immediacy for business users and more reliable information, which resulted in quicker analysis and timely reporting.‖ —Gurnam Saini, Assistant General Manager, ICICI Bank. ICICI Bank is India‘s second -largest bank, with total assets of about U.S. $79 billion and profit of U.S.$715 million for the fiscal year ended March 31, 2007. Headquartered in Mumbai, India, it has 950 branches and more than 3,600 ATMs, with a customer base of more than 25 million. The bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka, and Dubai International Finance Centre, and representative offices in the United States, United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia, and Indonesia. The Challenge: Eliminate costly, manual scripting techniques to integrate data from eight different source systems into data warehouse and improve developer productivity, data integrity, data load performance, and flexibility to add new Sources INFORMATICA SOLUTION. Informatica Power Center® ICICI Bank deployed PowerCenter in 2003 as it embarked on the next phase of its warehouse, which would add data from five new sources, in addition to the initial three sources of retail banking, credit cards, and securities information. Under an aggressive 10-month schedule, a team of data warehouse consultants and ICICI Bank developers designed, tested, and deployed PowerCenter to source data from the new systems, including ATM and Internet transactions, loans, and bonds. PowerCenter‘s intuitive GUI development environment and prebuilt functionality helped streamline development processes, particularly for such complex transformations as precomputed aggregates. With the component-based reusability of PowerCenter, developers could design mappings faster than they could with the previous manual scripting approach. ―With PL/SQL and BTEQ scripting, it used to take a long time to make any changes in the extracts or the field that needed to be added,‖ said GurnamSaini, Assistant General Manager. ―PowerCenter has given us the capability to rapidly make changes and improved our flexibility to respond to new data demands from business or IT as they arise.‖ In all, developers designed in PowerCenter more than 1,500 source system mappings that are grouped together in a single workflow and run in parallel to accelerate load times.

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BENEFITS PROVIDED TO CUSTOMERS FOR BETER CUSTOMER RETENSION: NO 1 2 3 4 5 6 7 PARTICULARS Cash payment Receipt of cash For issuance of demand draft Payment of demand drafts Payment of fixed deposit receipts Opening of an account% Collection of cheques: -Local - Outstation Statement of accounts(request for duplicate) TIME TAKEN Up to 15 minutes Up to 15 minutes Up to 10 minutes Up to 15 minutes 20 to 25 minutes 25 to 30 minutes Normally within 4 days Normally within 21 Days Within 3 working days

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ICICI Bank wins the Best CRM Project for providing relationship managers with a better view of the client and pro-actively contacting customers using their preferred channels. ICICI Bank also wins a second award, Best CRM Project, with its partner CDC. CRM Solutions for implementing architecture that allows for access by multiple users in the bank's network. The CRM is also integrated with the bank's SMS gateway, the telephony systems and the bank's email server for a multi-channel approach to CRM communication. The solution leverages on the existing customer base and provides the relationship managers with a 360 degree view of the customer. The system makes suggestions on possible additional revenue areas and disseminates the information to interested parties and other business lines that may be better equipped to service them. "ICICI Bank's CRM capabilities are greatly enhanced by this solution as they can pro-actively reach out to its customers based on their behavioural and transactional patterns," Kapfer says. Over 50 financial institutions from 15 countries across the Asia Pacific, Gulf region and Central Asia were evaluated as part of the Technology Implementation Awards Programme 2011

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CONCLUSION
It used to be that one could think of marketing as totally separate from the rest of the business enterprise. But with the advent of CRM or One- To- One marketing or loyalty, the dynamics have changed. CRM involves knowing your customers individually and having some mechanism for interacting with them or hearing from them, and customizing your business for them. One of the benefits of CRM is that it would make a company‘s customers more loyal. Every time a company interacts with the customer, the company customizes its service to be a bit more closely suited to the customer needs. Moreover the companies are making the product more and more valuable to the customer. The relationship with the customer is developing in its own context. The challenge for the banks is to work towards ensuring that the customers prefer their products and services vis-à-vis that of their competitors. The key is to develop and nurture a close relationship with customers by understanding their needs and preferences and catering to their requirements. That not only means listening carefully to what customers have to say, but also following through with an improved organizational approach. The banking industry in India has undergone volatile changes during the last decade and one of the major areas of change has been Customer Service. Customers of today demand ―UNIVERSAL BANKING‖. ‗Dog Eats Dog‘ competition in banking has almost made CRM an in evitable solution. It has been called a strategic tool that combines business processes, technology, employees and information across an enterprise to attract and retain profitable customers. Despite this, the jury is still out on whether CRM has fulfilled its promises. Has CRM in India been reduced to an empty buzzword that‘s tossed around so that a company appears to be keeping up with the industry? Not entirely, because organisations like Standard Chartered Bank, ICICI Lombard, BPL Telecom and Air-India have successfully used these tools— and benefited. The challenge that lies ahead for banks is Four Fold 1. They need to satisfy customer needs that are complex and difficult to manage. 2. They need to face up to increased competition from within the sector and from new entrants coming into the financial services market. 3. They need to address the demands based on supply chain. 4. They must continually invent new products and services in the light of envisaged changes.

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BIBLIOGRAPHY
BOOKS REFFERED:  CRM by KRISTIN ANDERSON & CAROL  KERR Harvard Business Review ON CRM  CRM XIII STD TEXT BOOK

WEBSITE: 1) www.crmguru.com 2) www.crmnext.com 3) www.crmadvocate.com 4) www.crmtoday.com 5) www.eHow.com 6) www.scribd.com MAGAZINES: 1) The Week 2) Business Today NEWSPAPERS: 1) Economic

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