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CRM in Banking

Project on

Customer Relationship Management

A study on Union bank of India

In partial fulfilment of requirement for the

Award of Degree of M.Com

Subject

Marketing Strategies& PlansSubmitted B!

Miss S!!MA "A#R!$A

Roll "o. #$

M.Com. %art & I' Seme(ter

)nder the *uidance of

Prof Mr Prakash Mulchandani

SM" C%A'I(AI %IMA"%MA# MASU)%AI C*##!+!

)+,AS"A*AR & -/00#

UI,!RSI"- *. MUM(AI

/012 3 /014

/



CRM in Banking

Department of Commerce

Certifcate

This is to certify that, Ms. SEEMA.M.TALREJA of M.Com.-I, Sem.-I (Roll No. - 36), has

successfully completed the project titled “CUSTOMER RELATIONSHIP

MANAGEMENT” under my guidance for the Academic Year 2015-16. The information

submitted is true and original as per my knowledge.

Prof. Prakash N. Mulchandani

(Project Guide)

Prof. Gopi Shamnani Dr. Padma V. Deshmukh

(Coordinator, M. Com Course) ( I/C Principal)

External Examiner



CRM in Banking

'!C#ARA"I*

I' Ms. SEEMA.M.TALREJA

(tudent of SM1. C,A"DIBAI ,IMA1MA+MA"S)2,A"I C3++4*4' )+,AS"A*AR (tud!ing in M.Com %art & I' 5Seme(ter

& I67 I hereb! declare that I ha8e completed thi( project on “CUSTOMER

RELATIONSHIP MANEGEMENT” for the subject “Marketing Strategies & Plans”

in the academic !ear0/9:/$.1he information (ubmitted i( true and original to the be(t

of m! knowledge

;;;;;;;;;;;;;;;

S44MA.M 1A+R4<A

#



CRM in Banking

AC2"3=+4*4M4"1

1o li(t who all ha8e helped me i( difficult becau(e the! are (o numerou( and the

depth i( (o enormou(.

I would like to acknowledge the following a( being ideali(tic channel( and fre(h

dimen(ion( in the completion of thi( project

I take thi( opportunit! to thank the Uni5ersity of Mumbai forgi8ing me chance

to do thi( project.

I would like thank m! Principal6 'r Padma , 'eshmukh for pro8iding the

nece((ar! facilitie( required for completion of thi( project.

I would al(o like to e>pre(( m! (incere gratitude toward( m! project guide ProfMr Prakash Mulchandani who(e guidance and care made the project

(ucce((ful.

I would like to thank m! college library' for ha8ing pro8ided ?ariou( reference

book( and maga@ine( related to m! project.

+a(t but not the lea(t' I would like to thank almight! *od' m! parent(' and

m! friend( who helped me gather the(e data and ha8e (at with me for hour(

di(cu((ing about the project.

-



CRM in Banking

Inde7

CHAPTER NO TOPICPAGENO

1Customer relationship management

introduction

1.1 what is CRM 10-12

1.2 Meaning and defning CRM 13

1.3 Emergence o CRM 14-15

1.4 CRM in Indian ban 1!-1"

1.5 #eed o CRM in ban 1$-22

1.! %b&ecti'e o CRM in bans 23-24

1.( )enefts o CRM 25-2(

2 CRM process frame8ork 2"

./ CRM formation proce(( 2$-30

. A framework for (ucce((ful CRM 31-32

.# Relation(hip management and go8ernance proce(( 33

.- Relational performance and e8aluation proce(( 34-35

.9 2e! principal( of CRM 3!-3(

.$ Cu(tomer retention 3"-41

. Building CRM 42-44

3 !9 CRM 45

#./ 4:CRM in bank( 4!-4(

#.2e! feature( of e:CRM 4"-4$

#. Benefit( of e:CRM to BA"2S and C)S13M4RS 50

4 Case study 51

)nion bank of India 52-5!

9



CRM in Banking

5 Sugge(tion('inding('conclu(ion and Bibliograph! 5(-!0

*bjecti5es

• 1o (tud! cu(tomer relation(hip management of )nion bank of India

• 1o find general working of bank and how (taff member( re(pon(e to

cu(tomer.

#imitations

• 1he project i( onl! limited to the (tud! of CRM of onl! one bank .

• CRM of other bank( are not di(clo(ed.

• CRM (trategie( of bank( are not compared with each other.

• 1ime' length' and depth of the (tud! are limited a( per the requirement( of

college

Scope

• 1he project begin( with a brief mention of what CRM i( and it( need and

importance in bank(. It further goe( on to (how the CRM (trateg! of )nion bank of India.

$



CRM in Banking

Methodology of study

Data for the project i( obtained in two wa!( primar! (ource and (econdar!

(ource.

• Primary source9

1he re(earcher collected primar! data b! preparing que(tionnaire and

inter8iewed manager' (taff and cu(tomer of )nion bank of India and 2apol co:

operati8e bank Mulund =e(t branch.

• Secondary source9

Secondar! data for the project ha( been gathered from 8ariou( CRM book( and

internet.



CRM in Banking

!:!CU"I,! SUMMAR-

Cu(tomer relation(hip management i( a broad approach for creating'

maintaining and e>panding cu(tomer relation(hip(. CRM i( the bu(ine((

(trateg! that aim( to under(tand' anticipate' manage and per(onali@e the need(

of an organi@ation( current and potential cu(tomer(. At the heart of a perfect

(trateg! i( the creation of mutual 8alue for all partie( in8ol8ed in the bu(ine((

proce((. It i( about creating a (u(tainable competiti8e ad8antage b! being the

be(t at under(tanding' communicating' and deli8ering and de8eloping e>i(ting

cu(tomer relation(hip( in addition to creating and keeping new cu(tomer(. So

the concept of product life c!cle i( gi8ing wa! to the concept of cu(tomer life

c!cle focu(ing on the de8elopment of product( and (er8ice( that anticipate the

future need of the e>i(ting cu(tomer( and creating additional (er8ice( that

e>tend e>i(ting cu(tomer relation(hip( be!ond tran(action

1he inten(e competition which bank( ha8e come to face' both a( a con(equence

of growth of non:banking financial in(titution( a( well a( (ecuriti@ation ha(

created the fear of high ri(k and ha( increa(ed the attention toward( Cu(tomer

Relation(hip Management.

Cu(tomer relation(hip management 5CRM6 i( a multifaceted proce((' mediated

b! a (et of information technologie( that focu(e( on creating two:wa!

e>change( with cu(tomer( (o that firm( ha8e an intimate knowledge of their

need(' want(' and bu!ing pattern(. In thi( wa!' CRM i( intended to help

companie( under(tand' a( well a( anticipate' the need( of current and potential

cu(tomer(.

1he project i( a detail (tud! of %roce(( In8ol8ed in %lanning of Cu(tomer

Relation(hip Management and "eed for Cu(tomer Relation(hip Management.



CRM in Banking

E



CRM in Banking

Chapter 1


Introduction

/0



CRM in Banking

11

;%A" IS CUS"*M!R R!#A"*S%IP MAA+!M!"<

CRM' or Cu(tomer Relation(hip Management' i( a compan!:wide bu(ine((

(trateg! de(igned to reduce co(t( and increa(e profitabilit! b! (olidif!ing

cu(tomer lo!alt!. 1rue CRM bring( together information from all data (ource(

within an organi@ation 5and where appropriate' from out(ide the organi@ation6 to

gi8e one' holi(tic 8iew of each cu(tomer in real time. 1hi( allow( cu(tomer

facing emplo!ee( in (uch area( a( (ale(' cu(tomer (upport' and marketing to

make quick !et informed deci(ion( on e8er!thing from cro((:(elling and up:

(elling opportunitie( to target marketing (trategie( to competiti8e po(itioning

tactic(.

3nce thought of a( a t!pe of (oftware' CRM ha( e8ol8ed into a cu(tomer:centric

philo(oph! that mu(t permeate an entire organi@ation. 1here are three ke!

element( to a (ucce((ful CRM initiati8e people' proce((' and technolog!. 1he

people throughout a compan!:from the C43 to each and e8er! cu(tomer (er8ice

rep:need to bu! in to and (upport CRM. A compan!F( bu(ine(( proce((e( mu(t

be reengineered to bol(ter it( CRM initiati8e' often from the 8iew of' how canthi( proce(( better (er8e the cu(tomerG irm( mu(t (elect the right technolog! to

dri8e the(e impro8ed proce((e(' pro8ide the be(t data to the emplo!ee(' and be

ea(! enough to operate that u(er( wonFt balk. If one of the(e three foundation( i(

not (ound' the entire CRM (tructure will crumble.

ItF( a (trateg! u(ed to learn more about cu(tomer(F need( and beha8ior( in order

to de8elop (tronger relation(hip( with them. After all' good cu(tomer

relation(hip( are at the heart of bu(ine(( (ucce((. 1here are man! technological

//



CRM in Banking

A component to CRM' but thinking about CRM in primaril! technological term(

i( a mi(take. 1he more u(eful wa! to think about CRM i( a( a proce(( that will

help bring together lot( of piece( of information about cu(tomer(' (ale('

marketing effecti8ene((' re(pon(i8ene(( and market trend(. If cu(tomer

relation(hip( are the heart of bu(ine(( (ucce((' then CRM i( the 8al8e the pump(

a compan!F( life blood. A( (uch' CRM i( be(t (uited to help bu(ine((e( u(e

people' proce((e(' and technolog! to gain in(ight into the beha8iour and 8alue of

cu(tomer(.

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CRM in Banking

1/

'efining CRM

Cu(tomer Relation(hip Marketing i( a practice that encompa((e( all marketing

acti8itie( directed toward e(tabli(hing' de8eloping' and maintaining (ucce((ful

cu(tomer relation(hip(. 1he focu( of relation(hip marketing i( on de8eloping

long:term relation(hip( and impro8ing corporate performance through cu(tomer

lo!alt! and cu(tomer retention.

Cu(tomer Relation(hip Management 5CRM6 a( the name (ugge(t(' the primar!

focal point i( placed on the cu(tomer. 1he ke! objecti8e i( to increa(e cu(tomer

8alue o8er time b! increa(ing cu(tomer lo!alt!. If a compan! de8elop( better cu(tomer relation(hip(' it al(o impro8e( bu(ine(( proce((e( a( well a( it( profit(.

In general' CRM i( a more efficient automated method u(ed to connect and

impro8e all area( of bu(ine(( to focu( on creating (trong cu(tomer relation(hip(.

All force( are coupled together to (a8e' impro8e' and acquire greater bu(ine(( to

cu(tomer relation(hip(. 1he mo(t common area( of bu(ine(( that are po(iti8el!

affected include marketing' (ale(' and cu(tomer (er8ice (trategie(.

CRM help( create time efficienc! and (a8ing( on both (ide( of the bu(ine((

(pectrum. 1hrough correct implementation and u(e of CRM (olution('

companie( gain a better under(tanding of their (tronge(t and weake(t area( and

how the! can impro8e upon the(e. 1herefore' cu(tomer( gain better product( and

(er8ice( from their bu(ine((e( of choice. In order to achie8e better in(ight on

CRM' it i( e((ential to con(ider all of it( component(.

/#



CRM in Banking

CRM9 Meaning

Cu(tomer relation(hip management 5CRM6 i( a bu(ine(( (trateg! that (pan( !our

entire organi@ation from front office to back:office. It i( a commitment !ou

make to put cu(tomer( at the heart of !our enterpri(e. 1he right CRM (trateg!

and (olution( can help !ou (ecurel!' reliabl! and con(i(tentl! delight !our

cu(tomer( e8er! time the! interact with !our bu(ine(( b! empowering them with

an!time' an!where' and an! channel acce(( to accurate information and more

per(onali@ed (er8ice. Reach more cu(tomer( more effecti8el!' increa(e cu(tomer

retention and boo(t cu(tomer lo!alt! b! le8eraging opportunitie( to up:(ell and

cro((:(ell and dri8ing repeat bu(ine(( at lower co(t Dri8e impro8ement( in

bu(ine(( performance b! pro8iding !our cu(tomer( with the abilit! to acce((

more information through (elf:(er8ice and a((i(ted:(er8ice capabilitie( when it

i( con8enient for them. 4nable 8irtuali@ation in !our enterpri(e a( more of !our

people and re(ource( e>tend be!ond !our office( and around the world Balance

(ophi(ticated functionalit! with rapid implementation and effecti8e (upport for a

fa(ter return on !our CRM in8e(tment. 1oda!( cu(tomer( face a growing range

of choice( in the product( and (er8ice( the! can bu!. 1he! ba(e their choice( on

their perception of qualit!' 8alue' and (er8ice. 4ach Con(umer ha( a (pecific

beha8iour. But bu!ing habit( are (ometime( difficult to under(tand. 1herefore

companie( alwa!( want to gain (ome in(ight about con(umer beha8iour and

habit( in order to better control thi( beha8iour. ,a8ing an impact on con(umer

beha8iour mean( being able to change con(umer( perception of the product or

(er8ice' to e(tabli(h a relation between the compan! and it( client(.

/-



CRM in Banking

1=

"%! !M!R+!C! *. CRM >

1he de8eloping cu(tomer relation(hip management ha( hi(torical antecedent(

going back into the pre:indu(trial era. In the recent !ear( howe8er (e8eral

factor( ha8e contributed to the rapid de8elopment and e8olution of CRM. 1he(e

include the growing de:intermediation proce(( in man! indu(trie( due to the

ad8ent of (ophi(ticated computer and telecommunication technologie( that allow

producer( to directl! interact with the end cu(tomer(.

1he recent (ucce(( of 3n:line banking' Charle( Schwab and Merr!ll +!nch(

3n:line in8e(tment program(' direct (elling of book(' automobile(' in(urance

etc. on the internet all atlea(t to the growing con(umer intere(t in maintaining

direct relation(hip with marketer(. 1he de:intermediation proce(( and

con(equent pre8alence of Cu(tomer Relation(hip Management i( al(o due to the

growth of the (er8ice econom!.

Another force dri8ing the adoption of cu(tomer relation(hip management ha(

been the total qualit! mo8ement. =hen companie( embraced 1otal Hualit!

Mo8ement philo(oph! to impro8e qualit! and reduce co(t' it become nece((ar!

to in8ol8e (upplier( and cu(tomer( in implementing the program at all le8el( of

the 8alue chain. 1hi( needed clo(e working relation(hip( with cu(tomer('

(upplier( and other member( of the marketing infra(tructure. 3ther program(

(uch a( <u(t in 1ime and Material re(ource planning al(o made the u(e of

interdependent relation(hip( between (upplier( and cu(tomer(.

Similarl! in the current era of h!pe:competition' marketer( are forced to be

more concerned with cu(tomer retention lo!alt!. A( (e8eral (tudie( indicated'

/9



CRM in Banking

retaining cu(tomer i( le(( e>pen(i8e and perhap( a more (u(tainable competiti8e

ad8antage than acquiring new one(. Marketer( are reali@ing that it co(t( le(( to

retain cu(tomer( than to compete for new one(. 1oda! man! large internationall!

oriented companie( are tr!ing to become global b! integrating their worldwide

operation. 1o achie8e thi( the! are (eeking cooperati8e and collaborati8e

(olution( for global operation( from their 8endor( in(tead of merel! engaging in

tran(actional acti8itie( with them. Such cu(tomer( need make it imperati8e for

marketer( intere(ted in the bu(ine(( of companie( who are global to adopt

Cu(tomer relation(hip management program(' particularl! global account

management program(. *lobal account management i( conceptuall! (imilar to

national account management program( e>cept that the! ha8e to be global in

(cope and thi( the! are more comple>. Managing cu(tomer relation(hip around

the world call( for e>ternal and internal partnering acti8itie(' including

partnering acro(( firm( worldwide organi@ation(.

/$



CRM in Banking

1?

Customer

Relationship

Management in

Indian bank >

Indian bank( had pre(umed that their

operation( were cu(tomer:centric' (impl! becau(e the! had cu(tomer(. 1he(e

bank( ruled the roo(t' protected b! regulation( that did not allow free entr! into

the (ector. And to their credit' when the banking (ector wa( opened up' the!

(ur8i8ed b! adapting quickl! for long to the new rule( of the game.

Man! managed to po(t profit(. or them an une>pected bonan@a came from

go8ernment bond( in which mo(t were hugel! in8e(ted.

Ironicall!' the Re(er8e Bank of IndiaF( mo8e( to cut aggre((i8el! the intere(t

rate( after /EEE' pu(hed up the price( of bond(. So bank( had a windfall doing

almo(t nothing. 1he bond profit(' like manna from hea8en' impro8ed the

balance:(heet( of all bank( irre(pecti8e of their core performance.

,owe8er' the era of la@! banking i( (oon to end. 1he me(h of rule( that propped

up the Indian banking indu(tr! i( now being di(mantled rapidl!.

/



CRM in Banking

According to a RBI road:map' India will ha8e a competiti8e banking market

after 00E. A( one of the mo(t attracti8e emerging market de(tination(' India

will (ee foreign bank( come in' what with more freedom to come in' grow and

acquire.

1herefore' it i( imperati8e that Indian bank( wake up to thi( realit! and re:focu(

on their core a((et the cu(tomer. A greater focu( on Cu(tomer Relation(hip

Management 5CRM6 i( the onl! wa! the banking indu(tr! can protect it( market

(hare and boo(t growth.

CRM would al(o make Indian banker( reali@e that the purpo(e of their bu(ine((

i( to Jcreate and keep a cu(tomerJ and to J8iew the entire bu(ine(( proce(( a(

con(i(ting of a tightl! integrated effort to di(co8er' create' and (ati(f! cu(tomer

need(.J

=hat i( CRM' and what will it deli8er to the bank(G CRM i(' probabl!' one of

the lea(t clearl! defined bu(ine(( acron!m(' a( there i( no (ingle definition for it.

It i( probabl! ea(ier to (a! what CRM i( not. )nfortunatel!' CRM ha( al(o

become a mi(nomer for a range of (olution( from I1 8endor(' each pro8iding it(

own (pin on the idea.

CRM i( 8ariou(l! mi(under(tood a( a fanc! (ale( (trateg!' an e>pen(i8e

(oftware product' or e8en a new method of data collection. It i( none of the(e.

/



CRM in Banking

CRM i( a (imple philo(oph! that place( the cu(tomer at the heart of a bu(ine((

organi@ation( proce((e(' acti8itie( and culture to impro8e hi( (ati(faction of

(er8ice and' in turn' ma>imi@e the profit( for the organi@ation.

A (ucce((ful CRM (trateg! aim( at under(tanding the need( of the cu(tomer andintegrating them with the organi@ation( (trateg!' people' and technolog! and

bu(ine(( proce((

1herefore' one of the be(t wa!( of launching a CRM initiati8e i( to (tart with

what the organi@ation i( doing now and working out what (hould be done to

impro8e it( interface with it( cu(tomer(. 1hen and onl! then' (hould it link to an

I1 (olution.

=hile thi( ma! (ound quite (traightforward' for large organi@ation( it can be a

mammoth ta(k unle(( a gradual (tep:b!:(tep proce(( i( adopted.

It doe( not happen (impl! b! bu!ing the (oftware and in(talling it. or CRM to

be trul! effecti8e' it require( a well:thought:out initiati8e in8ol8ing (trateg!'

people' technolog!' and proce((e(. Abo8e all' it require( the reali@ation that the

CRM philo(oph! of doing bu(ine(( (hould be adopted incrementall! with an

iterati8e approach to learn at e8er! (tage of de8elopment.

3nl! time will tell how Indian bank( embrace the CRM philo(oph! and take on

the competition from foreign entitie(.

/E



CRM in Banking

12

eed of CRM in banks

CRM primaril! cater( to all interaction( with the cu(tomer( or potential

cu(tomer(' acro(( multiple touch point( including the Internet' bank branch' call

centre' field organi@ation and other di(tribution channel(.

CRM can help banks in follo8ing 8ays>

1 Campaign Management & Bank( need to identif! cu(tomer(' tailor product(

and (er8ice( to meet their need( and (ell the(e product( to them. CRM achie8e(

thi( through Campaign Management b! anal!@ing data from bank( internal

application( or b! importing data from e>ternal application( to e8aluate

cu(tomer profitabilit! and de(igning comprehen(i8e cu(tomer profile( in term(

of indi8idual life(t!le preference(' income le8el( and other related criteria.

Ba(ed on the(e profile(' bank( can identif! the mo(t lucrati8e cu(tomer( and

cu(tomer (egment(' and e>ecute targeted' per(onali@ed multi:channel marketing

0



CRM in Banking

campaign( to reach the(e cu(tomer( and ma>imi@e the lifetime 8alue of tho(e

relation(hip(.

/ Customer Information Consolidation : In(tead of cu(tomer information being

(tored in product centric (ilo(' 5for e.g. (eparate databa(e( of (a8ing( account K

credit card cu(tomer(6' with CRM the information i( (tored in a cu(tomer centric

manner co8ering all the product( of the bank. CRM integrate( 8ariou( channel(

to deli8er a ho(t of (er8ice( to cu(tomer(' while aiding the functioning of the

bank.

= Marketing !ncyclopedia : Central repo(itor! for product(' pricing and

competiti8e information' a( well a( internal training material' (ale(

pre(entation(' propo(al template( and marketing collateral.

? =409degree 5ie8 of company & 1hi( mean( whoe8er the bank (peak( to'

irre(pecti8e of whether the communication i( from (ale(' finance or (upport' the

bank i( aware of the interaction. Remo8al of incon(i(tencie( of data make( the

client interaction proce((e( (mooth and efficient' thu( leading to enhanced

cu(tomer (ati(faction.

2 Personali@ed sales home page & CRM can pro8ide a (ingle 8iew where Sale(

Manger( and agent( can get all the mo(t up:to:date information in one place'

including opportunit!' account' new(' and e>pen(e report information. 1hi(would make (ale( deci(ion fa(t and con(i(tent.

4 #ead and *pportunity Management : 1he(e enable organi@ation( to

effecti8el! manage lead( and opportunitie( and track the lead( through deal

clo(ure' the required follow:up and interaction with the pro(pect(.

/



CRM in Banking

Acti5ity Management & It help( manager( to a((ign and track the acti8itie( of

8ariou( member(. 1hu( impro8ed tran(parenc! lead( to impro8ed efficienc!.

B Contact Centre & It enable( cu(tomer (er8ice agent to pro8ide uniform (er8ice

acro(( multiple channel( (uch a( phone' Internet' email' a>.

*perational Inefficiency Remo5al & CRM can help in Strateg! ormulation to

eliminate current operational inefficiencie(. An effecti8e CRM (olution (upport(

all channel( of cu(tomer interaction including telephone' fa>' e:mail' the online

portal(' wirele(( de8ice(' A1M(' and face:to:face contact( with bank per(onnel.

It al(o link( the(e cu(tomer touch point( to an operation( centre and connect( the

operation( centre with the rele8ant internal and e>ternal bu(ine(( partner(.

10!nhanced producti5ity & CRM can help in enhanced producti8it! of cu(tomer('

partner( and emplo!ee(.

11CRM 8ith (usiness Intelligence : Bank( need to anal!@e the performance of

cu(tomer relation(hip(' unco8er trend( in cu(tomer beha8iour' and under(tand

the true bu(ine(( 8alue of their cu(tomer(. CRM with bu(ine(( intelligence

allow( bank( to a((e(( cu(tomer (egment(' which help them calculate the net

pre(ent 8alue 5"%?6 of a cu(tomer (egment o8er a gi8en period to deri8e

cu(tomer lifetime 8alue. Cu(tomer( can be e8aluated within a (coringframework. Combining the beha8iour ke! figure and frequenc! to monetar!

acqui(ition anal!(i( with a marketing re8enue quota can optimi@e acqui(ition

co(t( and cut the number of inefficient acti8itie(.



CRM in Banking

=ith (uch knowledge' bank( can efficientl! allocate re(ource( to the mo(t

profitable cu(tomer( and reengineer the unprofitable one(. Data warehou(ing

(olution( ha8e been implemented in Citibank' Re(er8e Bank of India' State Bank of

India' IDBI' ICICI' Ma>1ouch' ACC' "ational Stock 4>change and %ep(iCo. And

Bu(ine(( Intelligence pla!er( hope man! more will follow (uit.

#



CRM in Banking

14

*bjecti5e of Customer Relationship Management in (anks

1he pu(h toward( better CRM technologie( i( natural re(ult of the (earch b!

bu(ine(( of greater producti8it! and efficienc! in cu(tomer facing operation(

like (ale(' marketing' cu(tomer (er8ice and (upport. 4.g. in (ale(' companie(

need I1 (!(tem that pro8ide( greater control and efficienc!. 1hi( mean(

impro8ed foreca(ting and to capabilit!' greater 8i(ibilit! into (ale( performance

acro(( a 8ariet! of channel( increa(ed producti8it! b! e>ternal (ale( force( and

reduced (ale( co(t(' meanwhile' companie( mu(t meet cu(tomer demand( for

better qualit! timele(( and cu(tomi@ation in the (er8ice the! deli8er.

*bjecti5e of

customer

relationship

management

SalesMarketing

Customer

ser5iceSupport

-



CRM in Banking

Companie( al(o need technologie( that help them approach cu(tomer( in a

rational wa!. 4.g. remember a cu(tomer addre(( from one tran(action to another

and carefull! choreograph contact between it(' (ale( force and cu(tomer(. In

addition to being wa(teful and inefficient

pitching a new product to a cu(tomer who ha( ju(t bought the (ame item make(

the compan! look incompetent to the cu(tomer.

1he internet dramaticall! accelerate the focu( on CRM b! making cu(tomer

interaction( more co(t:efficienc!. In addition' the web ha( e(tabli(hed a more

direct (ale( channel that (upport( rapid cu(tomer( interaction and (hort (ale(

c!cle(. )(ing internet technologie(' cu(tomer can interact with information

from a wide 8ariet! of (ource( without (pecial training.

1he idea of CRM i( that it help( bu(ine((e( u(e technolog! and human re(ource(

gain in(ight into the beha8iour of cu(tomer( and the 8alue of tho(e cu(tomer(. If

it work( a( hoped' a bu(ine(( can pro8ide better cu(tomer (er8ice' make call

centre( more efficient' cro(( (ell product( more effecti8el!' help (ale( (taff clo(e

deal( fa(ter' (implif! marketing and (ale( proce((e(' di(co8er new cu(tomer('

and increa(e

Cu(tomer re8enue(. It doe(nFt happen b! (impl! bu!ing (oftware and in(talling

it. or CRM to be trul! effecti8e an organi@ation mu(t fir(t decide what kind of

cu(tomer information it i( looking for and it mu(t decide what it intend( to dowith that information. or e>ample' man! financial in(titution( keep track of

cu(tomer(F life Stage( in order to market appropriate banking product( like

mortgage( or IRA( to them at the right time to fit their need(.

9



CRM in Banking

1

(enefits of a Customer Relationship Management

A properl! implemented CRM (!(tem can bring (ignificant benefit( to

organi@ation(. But when I talk about a (!(tem' I mean the # %F(' the complete

con(ortium of people 5emplo!ee(' culture6' procedure( 5wa! of doing bu(ine((6

and program( 5(upporting application(6' not ju(t an application running on a

computer.

CRM i( more than ju(t the ne>t wa8e of computer:aided marketing7 itF( a wa! of

doing bu(ine((. +et( take a look at the ad8antage( that a CRM or Cu(tomer

Relation(hip Management (!(tem can bring.

/.Shared or distributed data

A( companie( reali@e that cu(tomer relation(hip( are happening on man! le8el(

5not ju(t through cu(tomer (er8ice or a web pre(ence6' the! (tart to under(tand

the need for (haring all a8ailable data throughout the organi@ation. A CRM

(!(tem i( an enabler for making informed deci(ion( and follow:up' on all the

different le8el(.

.Cost reduction

A (trong point in Cu(tomer Relation(hip Management i( that it i( making the

cu(tomer a partner in !our bu(ine((' not ju(t a (ubject. A( cu(tomer( are doing

their own order entr!' and are empowered to find the info the! need to come to a

bu! deci(ion' le(( order entr! and cu(tomer (upport (taff i( needed.

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CRM in Banking

#.(etter Customer Ser5ice

All data concerning interaction( with cu(tomer( i( centrali@ed. 1he cu(tomer

(er8ice department can greatl! benefit from thi(' becau(e the! ha8e all the

information the! need at their fingertip(. "o need to gue((' no need to a(k the

cu(tomer for the n:th time. And through the u(e of pu(h:technolog!' cu(tomer

(er8ice rep( can lead the cu(tomer toward( the information the! need. And' mo(t

of the time' the cu(tomer can do thi( on their own' a( the CRM (!(tem

5remember' the # %F(6 i( more and more able to anticipate the need of the

cu(tomer. 1he cu(tomer e>perience i( greatl! enhanced.

-.Increased Customer Satisfaction

1he cu(tomer feel( that he i( more Jpart of the teamJ in(tead of ju(t a (ubject for

(ale( and marketing 5the pro8erbial number6' cu(tomer (er8ice i( better' hi(

need( are anticipated. 1here i( no doubt that cu(tomer (ati(faction will go up. If

the product( (old e>ceed the cu(tomer( e>pectation' of cour(e' no CRM (!(tem

can help !ou with (hodd! product(. In m! opinion' the term (ati(faction i( a

contaminated. Man! companie( think that if cu(tomer( are satisfied that thi( i( a

good predictor for repeat bu(ine((. ,owe8er' thi( i( not the ca(e. 3nl!

delighted cu(tomer( ha8e a great le8el of lo!alt!.

9.(etter Customer Retention

If a CRM (!(tem can help to enchant cu(tomer(' thi( will increa(e cu(tomer

lo!alt!' and the! will keep coming back to bu! again and again' hence cu(tomer

retention.



CRM in Banking

$.More repeat business

1he repeat bu(ine(( i( coming from the delighted cu(tomer(' who are turned

from doubting client( into lo!al ad8ocate(.

.More ne8 business

If !ou are deli8ering the ultimate cu(tomer e>perience' thi( will (eed the word:

of:mouth bu@@' which will (pawn more new bu(ine((.

.More ProfitD

More bu(ine(( at lower co(t equal( more profit.



CRM in Banking

Chapter /


Process .rame8ork

E

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CRM in Banking

/1

Customer Relationship Management formation process

#0

Connect

Cogni@e

Combine

Correlate

.ormation

process



CRM in Banking

1he appropriate approach for the CRM proce(( in8ol8e

1 Correlate

A (erie( of tran(action that make up a dialogue between cu(tomer' cu(tomer' end

u(er and an organi@ation. 1hi( i( the data that i( collected from all contact point(

and communication. =ith out(ide point( of contact.

/ Combine

1he mapping and management of interaction( point( between a cu(tomer'

channel' end u(er and an organi@ation.

= Cogni@e

1he in(ight gained through capture and anal!(i( of detailed information i( to

create continuou( learning from the data warehou(e and knowledge ba(e that i(

created' interrogated and anal!(ed.

? Connect

1he application of in(ight to create rele8ant interaction or communication with

the con(umer(' cu(tomer(' channel( (upplier( and partner( that build 8alue

relation(hip(.

#/



CRM in Banking

//

A frame8ork for successful CRM

Cu(tomer Relation(hip Management in8ol8e( much more than in(talling an!

one application' embracing a new technolog!' or e8en committing to one

8endor( CRM (uite. It pro8ide( better in(ight into cu(tomer beha8iour and

enable( new wa!( of doing bu(ine((. *ood implementation( gi8e emplo!ee( a

complete 8iew of the organi@ation( relation(hip with it( cu(tomer( and open up

internal (!(tem to cu(tomer( (o the! can ha8e acce(( to (ale( and (er8ice(

them(el8e(.

CRM require( a cultural change that align( a compan!' it( emplo!ee( and it(

(!(tem toward( cu(tomer( and awa! from traditional product or proce(( centric

model(. Companie( that are unre(pon(i8e to the (hift will (oon find them(el8e(

(crambling for (crap( left behind b! tho(e that are.

Adopt a suitable frame8ork

A (imple framework will help !ou to under(tand the full (cope of a CRM

(olution and al(o help to focu( on area( that need !our attention. A u(eful

framework will encompa(( the following element(.

• Customer strategy

1hi( will en(ure that !ou are focu(ed on achie8ing (pecific cu(tomer goal(' and

will pro8ide direction to the (election and deplo!ment of CRM application(.

#



CRM in Banking

• Customer insight

1hi( encap(ulate( cu(tomer data acqui(ition and (torage capabilitie(' in(ight

generation capabilitie( and in(ight generation capabilitie( and in(ight

e>ploitation capabilitie( and i( u(ed both to (upport cu(tomer (trateg!

de8elopment and to dri8e intelligent cu(tomer interaction in marketing' (elling

and (er8ice acti8itie(.

##



CRM in Banking

/=

Relationship management and go5ernance process

3nce CRM program i( de8eloped and rolled out' the program a( well a( the

indi8idual relation(hip mu(t be managed and go8erned. or ma(( market

cu(tomer(' the degree to which there i( (!mmetr! or a(!mmetr! in the primar!

re(pon(ibilit! of whether the cu(tomer or the program (pon(oring compan! will

be managing the relation(hip 8arie( with the (i@e of market. ,owe8er' for

program directed at di(tributor and bu(ine(( cu(tomer( the management of the

relation(hip would require the in8ol8ement of both partie(. 1he degree to whichthe(e go8ernance re(pon(ibilitie( are (hared or managed independentl! will

depend on the perception of norm( of go8ernance proce((e( among relational

partner( gi8en the nature of their CRM program and the purpo(e of engaging in

the relation(hip.

=hether management and go8ernance re(pon(ibilitie( are independentl! or

jointl! undertaken b! relational partner(' (e8eral i((ue( mu(t be addre((ed.

1he(e include deci(ion( regarding role (pecification' communication' common

bond(' planning proce((' proce(( alignment' emplo!ee moti8ation and

monitoring procedure(.

Communication with cu(tomer partner( i( a nece((ar! proce(( of relation(hip

marketing. It help( in relation(hip de8elopment' fo(ter( tru(t' and pro8ide( the

information and knowledge needed to undertake cooperati8e and collaborati8e

acti8itie( of relation(hip marketing. In man! wa!( it i( the lifeblood of

relation(hip marketing. B! e(tabli(hing proper communication channel( for

(haring information with a compan! can enhance their relation(hip with them. In

addition to communicating with cu(tomer(' it i( al(o e((ential to e(tabli(h intra:

compan! communication practicall! among all concerned indi8idual( and

corporate function( that directl! pa! a role in managing the relation(hip with

(pecific cu(tomer or cu(tomer group.

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CRM in Banking

/?

Relational performance and !5aluation process

Relational parties

Cu(tomer partner (election i( another important deci(ion in the relation(hip

formation (tage. 48en though a compan! ma! (er8e all cu(tomer t!pe(' few

ha8e the nece((ar! re(ource( and commitment to e(tabli(h CRM program( for

all. 1herefore I the initial pha(e' a compan! ha( to decide which cu(tomer t!pe

and (pecific cu(tomer( or cu(tomer group( will be the focu( of their CRM

effort(. Sub(equentl! when the compan! gain( e>perience and achie8e

(ucce((ful re(ult(' the (cope of CRM acti8itie( could be e>panded to include

other cu(tomer( into the program or engage in additional program(

Although partner (election i( an important deci(ion in achie8ing CRM goal(' not

all companie( ha8e a formali@ed proce(( of (electing cu(tomer(. Some follow

intuiti8e judgmental approach of (enior manager( in (electing cu(tomer( partner( and other partner( with tho(e cu(tomer( who demand (o. Let other

companie( ha8e formali@ed proce((e( of (electing relational partner( through

e>ten(i8e re(earch and e8aluation along cho(en criteria. 1he criteria for partner

(election 8ar! according to compan! goal( and policie(. 1he(e range from a

(ingle criterion (uch a( re8enue potential of the cu(tomer to multiple criteria

including (e8eral 8ariable( (uch a( cu(tomer commitment' re(ourcefulne((' and

management 8alue(.

#9



CRM in Banking

!5aluation process

%eriodic a((e((ment if re(ult( in CRM to e8aluate if program( are meeting

e>pectation( and if the! are (u(tainable in the long run. %erformance e8aluation

al(o help( in making correcti8e action in term( of relation(hip go8ernance or in

modif!ing relation(hip marketing objecti8e( and program feature(. =ithout a

proper performance metric( to e8aluate CRM effort(' it would be hard to make

objecti8e deci(ion( regarding continuation' modification or termination of CRM

program(. De8eloping a performance metric( i( alwa!( a challenging acti8it! a(

mo(t firm( are inclined to u(e e>i(ting marketing mea(ure( to e8aluate CRM.

howe8er man! e>i(ting marketing mea(ure(' (uch a( market (hare and total8olume of (ale( ma! not be appropriate in the conte>t of CRM. 48en when a

more CRM oriented mea(ure( are (elected it cannot be applied uniforml! acro((

all CRM program( particularl! when the purpo(e of each program i( different

from one another.

Another global mea(ure u(ed b! firm( to monitor CRM performance i( the

mea(urement of relation(hip (ati(faction. Similar to the mea(urement of

cu(tomer (ati(faction mea(urement would help in knowing to what e>tent

relational partner( are (ati(fied with their current cooperati8e and collaborati8e

relation(hip(. )nlike cu(tomer (ati(faction mea(ure( that are applied to mea(ure

(ati(faction on one (ide of the d!ad' relation(hip (ati(faction mea(ure( could be

applied on both (ide( of the d!ad. Both the cu(tomer and the marketing firm

ha8e to perform in order to produce the re(ult( in a cooperati8e relation(hip and

hence each part!( relation(hip (ati(faction could be mea(ured.

#$



CRM in Banking

/2

)ey principals of customer relationship management

'ifferentiate Customers

All cu(tomer( are not equal7 recogni@e and reward be(t cu(tomer(

di(proportionatel!. )nder(tanding each cu(tomer become( particularl!

important. And the (ame cu(tomer( reaction to a cellular compan! operator ma!

be quite different a( compared to a car dealer. Be(ide( for the (ame product or

the (er8ice not all cu(tomer( can be treated alike and CRM need( to differentiate between a high 8alue cu(tomer and a low 8alue cu(tomer.

=hat CRM need( to under(tand while differentiating cu(tomer( i(G

- Sen(iti8itie(' 1a(te(' %reference( and

%er(onalitie(

- +ife(t!le and age

- Culture Background and education

: %h!(ical and p(!chological characteri(tic(

• 'ifferentiating *fferings

→ +ow 8alue cu(tomer requiring high 8alue cu(tomer offering(

→ +ow 8alue cu(tomer with potential to become high 8alue in near future

→ ,igh 8alue cu(tomer requiring high 8alue (er8ice

→ ,igh 8alue cu(tomer requiring low 8alue (er8ice

• )eeping !7isting Customers

*rading cu(tomer( from 8er! (ati(fied to 8er! di(appoint (hould help the

organi@ation in impro8ing it( cu(tomer (ati(faction le8el( and (core(.

#



CRM in Banking

A( the (ati(faction le8el for each cu(tomer impro8e( (o (hall the cu(tomer

retention with the organi@ation.

• Ma7imi@ing #ife time 5alue

4>ploit up:(elling and cro((:(elling potential. B! identif!ing life (tage and life

e8ent trigger point( b! cu(tomer' marketer( can ma>imi@e (hare of purcha(e

potential. 1hu( the (ingle adult( (hall require a new car (tereo and a( he grow(

into a married couple hi( need( grow into appliance(.

• Increase #oyalty

+o!al cu(tomer( are more profitable. An! compan! will like it( mind (hare

(tatu( to impro8e from being a (u(pect to being an ad8ocate. Compan! ha( to

in8e(t in term( of it( product and (er8ice offering( to it( cu(tomer(. It ha( to

inno8ate and meet the 8er! need( of it( client( cu(tomer( (o that the! remain a(

ad8ocate( on the lo!alt! cur8e. Referral (ale( in8ariabl! are low co(t high

margin (ale(.

• (usiness intelligence and analytical capabilities

CRM application( contain a 8a(t amount of information pertaining to an

organi@ation cu(tomer( and pro(pect(. 1hi( information need( to be le8eraged an

anal!@ed b! deci(ion. 1hi( i( po((ible onl! if CRM (olution( ha8e robu(t

bu(ine(( intelligence and anal!tical capabilitie(. 1hi( i( a major requirement

primaril! for marketing application.

#



CRM in Banking

/4

Customer retention

)nder the pre(ent conte>t of competiti8e en8ironment' the focu( of the

organi@ation( i( more on cu(tomer retention than (impl! on cu(tomer

acqui(ition. Cu(tomer retention i( the proce(( of keeping cu(tomer in the

cu(tomer in8entor! for an unending period b! meeting the need( and e>ceeding

the e>pectation( of tho(e cu(tomer(. It i( approach of con8erting a ca(ual

cu(tomer not a committed lo!al cu(tomer.

;hy is customer retention preferred<

Some of the major benefit( of cu(tomer retention are pre(ented below. cu(tomer

come within the fold of an organi@ation in the following wa!(

• Cu(tomer b! chance.

• Cu(tomer b! occa(ion

• Cu(tomer b! choice

• Cu(tomer b! reception

• Cu(tomer b! lo!alt!

In the cu(tomer retention approach the organi@ation make( e8er! effort to

con8ert a cu(tomer b! chance into a cu(tomer b! lo!alt!. A retained cu(tomer

who turn( out to be lo!al will (hift hi( focu( of relation(hip with the

organi@ation from a mere tran(actional relation(hip to a relation(hip tied up with

emotion and commitment' which will benefit the organi@ation a long wa!.

#E



CRM in Banking

Cu(tomer retention would enable the organi@ation to minimi@e e>pen(e( in

term( of acqui(ition of new cu(tomer(. Cu(tomer retention co(t for an

organi@ation i( e>pected to be far le(( than that of the acqui(ition concerned.

Cu(tomer retention enable( a long tem relation(hip of mutual benefit' both to the

organi@ation and to the cu(tomer concerned.

1here appear( to be clo(e interaction between cu(tomer retention and cu(tomer

lo!alt!. +o!alt! i( u(uall! mea(ured in term( of longe8it! of the patronage of

cu(tomer(. +o!alt! that ari(e( out of retention i( a preferred (tate' a( comparedto lo!alt! of reluctant cu(tomer(.

Retained cu(tomer( would help to (pread a po(iti8e image of the organi@ation b!

word of mouth' which in turn( help( to acquire new cu(tomer( to the cu(tomer

in8entor!.

Approach to retention process

1he approach of the organi@ation at the retention proce(( i( e>pected to be

different from the approach adopted at the acqui(ition proce((. 1he difference i(

indicated in the following line(.

At the acqui(ition the focu( i( on acquiring relation(hip wherea( at the retention'

it i( on nurturing the relation(hip.

At the acqui(ition the focu( i( on demographic' p(!chographic profile of the

cu(tomer' wherea( the retention proce(( the focu( i( more on pa(t and pre(ent

tran(actional profile( in addition to demographic' p(!chographic profile(.

-0



Re9

acEuisition

'efection Attrition

Retention

AcEuisition

Stage( of

retention in

cu(tomer life

c!cle...

CRM in Banking

Stages of retention in the customer life cycle

-/



CRM in Banking

AcEuisition i( a (tage in which cu(tomer are acquired for an organi@ation

bu(ine((. Cu(tomer( (o acquired would reach a (tate of either (ati(faction or

di((ati(faction.

• Satisfaction lead( to retention

• 'issatisfaction lead( to (tage of attrition

A (ati(fied cu(tomer who join( the retention (tage might either proceed toward(

lo!alt! (tage or in the e8ent of being di((ati(fied will join the attrition (tage.

1he cu(tomer who join( the attrition (tage will proceed to the (tage if defection'

unle(( he i( (ati(fied. 1 ho(e cu(tomer( in the defection (tage ma! be reacquired'

b! mean( of appropriate marketing programme( de(igned and implemented for

the purpo(e ReacEuisition

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CRM in Banking

/

(uilding customer relationship management

3rgani@ation (trategie( toward( de8eloping and maintaining (u(tainable

relation(hip differ from one organi@ation to another depending on certain

factor(. 1he(e include nature of bu(ine((' it( (i@e' it( market (hare' nature of

product t!pe' 8olume of (ale(' geographic concentration' (ocio economic (tatu(

and life (t!le of the cu(tomer concerned' competitor( (trength' and (o on. 1he(trategie( that are practiced b! cu(tomer dri8en organi@ation with national and

global per(pecti8e. 1he reader ma! concentrate on tho(e (trategie( or

combination of (e8eral (trategie( that (uit the bu(ine(( conte>t.

-#

%eople

%roduct

3rgani@ation %roce((

Setting

(ati(factor!

(er8ice (tandard



CRM in Banking

People

%eople within the organi@ation ha8e the ba(ic role in de8eloping and maintaining

relation(hip with cu(tomer. 48er!one in the organi@ation mu(t reali@e the fact

that their work i( toward( (ati(f!ing cu(tomer(. 48er!one from the lowe(t to the

highe(t le8el irre(pecti8e if their functional (peciali@ation and re(pon(ibilitie(

mu(t integrate their acti8itie( toward( one of the main objecti8e( of the

organi@ation cu(tomer (ati(faction. 1he marketing department( can coordinateintegrated acti8it! toward( cu(tomer (ati(faction.

Process

%roce(( in8ol8e( a logical (equence of acti8itie( right from the need

identification of potential cu(tomer( to need fulfilment. "eed fulfilment require(

manufacture of product with de(ired attribute(. 1he proce(( ha( to be deri8edfrom the cu(tomer( 8iewpoint which pa8e( wa! for total cu(tomer (ati(faction.

1he performance of each link mu(t be objecti8el! anal!@ed and corrected in tune

with the internal and e>ternal cu(tomer( e>pectation.

Product

1he product offered mu(t con(tantl! pro8ide 8alue addition. 1he e>pectation( of the cu(tomer( ma! alwa!( be on the increa(e due to 8ariou( rea(on(. A cu(tomer

(ati(fied with a gi8en product ma! (oon become a di((ati(fied cu(tomer in 8iew

of the change( that take( place in hi( e>pectation(. Cu(tomer( e>pectation( go

much be!ond ph!(ical tangible thing(.

*rgani@ation

--



CRM in Banking

In order to build cu(tomer relation(hip' an organi@ation (hould be aware of the

technolog! ad8ancement( and pro8ide qualit! (er8ice in tune with the

cu(tomer( e>pectation(. It (hould

concentrate on total cu(tomer (ati(faction and re(pond to the requirement of thecu(tomer( fa(ter than it( competitor(. 1he re(pon(i8e and learning nature of the

organi@ation mu(t build Confidence in the mind of the cu(tomer( and that will

go a long wa! in building the cu(tomer relation(hip.

Setting satisfactory ser5ice standard

A cu(tomer not onl! e>pect( qualit! product( but al(o qualit! (er8ice(. 1he

organi@ation mu(t en(ure qualit! and a8ailabilit! of the product. 1he

under(tanding couple with the (kill( would help more (ignificantl! the proce((

of achie8ing the ultimate objecti8e of Cu(tomer Interaction Management. At thi(

point' it i( worth! to note that effecti8e CIM goe( much be!ond the (kill(

de8eloped' knowledge gained' technolog! enabled and infra(tructure build up.

)ltimatel! it i( lo8e' tru(t and re(pect that an organi@ation earn( from cu(tomer(

that i( (upported b! organi@ation help:de(k(' cu(tomer (upport' (oftware'

integrated cu(tomer information (!(tem etc that would help to gain ma>imum

benefit( out of Cu(tomer Interaction Management.

-9



CRM in Banking

Chapter =

!9CRM

-$



CRM in Banking

=1

! 3CRM in banks

=hat i( 4:CRMG

A( the internet i( becoming more and more important in bu(ine(( life' man!

companie( con(ider it a( an opportunit! to reduce cu(tomer:(er8ice co(t('

tighten cu(tomer relation(hip( and mo(t important' further per(onali@e

marketing me((age( and enable ma(( cu(tomi@ation 1ogether with the creation

of Sale( force automation 5SA6' where electronic method( were u(ed to gather

data and anal!@e cu(tomer information' the trend of the upcoming Internet can

be (een a( the foundation of what we know a( eCRM toda!.

We can define eCRM as activities to manage customer relationships by using

the Internet, web browsers or other electronic touch points.

1he challenge hereb! i( to offer communication and information on the right

topic' in the right amount' and at the right time that fit( the cu(tomer( (pecific

need(.

Channel(' through which companie( can communicate with it( cu(tomer(' are

growing b! the da!' and a( a re(ult' getting their time and attention ha( turned

into a major challenge. 3ne of the rea(on( eCRM i( (o popular nowada!( i( that

digital channel( can create unique and po(iti8e e>perience( & not ju(t

tran(action( & for cu(tomer(. An e>treme' but e8er growing in popularit!'

e>ample of the creation of e>perience( in order to e(tabli(h cu(tomer (er8ice i(

the u(e of ?irtual =orld(' (uch a( (econd life. 1hrough thi( (o:called eCRM'

companie( are able to create (!nergie( between 8irtual and ph!(ical channel(

and reaching a 8er! wide con(umer ba(e. ,owe8er' gi8en the newne(( of the

-



CRM in Banking

technolog!' mo(t companie( are (till (truggling to identif! effecti8e entrie( in

?irtual =orld(. It( highl! interacti8e character' which allow( companie( tore(pond directl! to an! cu(tomer( reque(t( or problem(' i( another feature of

eCRM that help( companie( e(tabli(h and (u(tain long:term cu(tomer

relation(hip(.

-



CRM in Banking

=/

)ey features of !9CRM

• .ocused on process

A CRM proce(( bring( !ou the appropriate technolog! and it will reduce the

technolog! gap a( well a( refining !our bu(ine(( proce((.

• 'ata 8arehouse dri5en

In a e:CRM (olution' the data warehou(e or cu(tomer data mart contain( a

con(olidated and comprehen(i8e 8iew of the cu(tomer. 1he warehou(e pro8ide(

the broade(t po((ible profile of the cu(tomer. 1hi( i( needed to determine an

appropriate cour(e of action' the mo(t effecti8e offer to make' and the be(t

channel to deli8er !our pertinent me((age.

-E



CRM in Banking

• A multi channel 5ie8

3rgani@ation( toda! ha8e different method( of interacting with cu(tomer(.

4.g. A bank might u(e one application to (upport it( web(ite ' another to (upport

(ale( and another to (upport A1M( and !et another to (upport direct mail and

telemarketing.

An e:CRM (olution mu(t ha8e application( that coordinate or (!nchronie(

cu(tomer communication acro(( channel( and do (o in real time. 1he(e

application( mu(t be able to capture cu(tomer tran(action acro(( di(parate touch

point( and

Store that information in a temporar! data (tore for immediate a((e((ment and

re(pon(e. In addition' thi( application mu(t feed information captured from tho(e

touch point( into the data warehou(e to broaden the cu(tomer profile( obtained

from back:end tran(actional (!(tem( and e>ternal (ource(.

• Measurement dri5en

1oda! man! companie( (pend million( of dollar( communicating with

cu(tomer(' but (pend little time and effort determining the effecti8ene(( of tho(e

campaign( CRM pro8ide( the mean( to mea(ure communication effort(. 4:CRM

i( a continuou( proce((.

90



CRM in Banking

==

(!!.I"S *. !9CRM "* (ankFs A' CustomerFs

(!!.I"S "*

(A)

(!!.I"S "*

CUS"*M!R

Relation(hip with the

cu(tomer

Cu(tomer interaction and

(ati(faction

)(ing e:mail for

bu(ine((

communication

Con8enience

%er(onali@ed (er8ice(

or one to one (er8ice(

Speed of proce((ing the

tran(action through e:

re(pon(e

=eb(ite to market

product( and (er8ice( Ser8ice qualit!

1ran(action (ecurit! 1ru(t

9/



CRM in Banking

Chapter ?1

Union bank of India case study

9



CRM in Banking

?1

Union bank of India

1he )nion Bank of India wa( built up in twentieth centur! and declared open b!

the ather of the "ation' Mahatma *andhi. 1he bank with it( efficient 8alue:

added (er8ice(' (u(tained growth' con(i(tent profitabilit! and de8elopment of

new technologie( bank ha( en(ured complete cu(tomer delight' li8ing up to it(

image of' N*33D %43%+4 13 BA"2 =I1,O. Bank i( offering credit card('

home loan' union demat' 2i(an A1M' International debit card' online ta>

pa!ment facilit!' Railwa! e:ticketing kio(k' etc.' (er8ice( to it( cu(tomer(

through core banking (olution.

1he )nion Bank of India ha( $/ branche( out which /0#/ branche( are under

CBS. %re(entl! E#E A1M( (pread out acro(( India both 3n(ite and 3ff(ite. All

the A1M( are inter:connected through the Bank( A1M Switch' thu( facilitating

on:line operation( in ca(e of CBS cu(tomer(. 1he Bank i( a member of Ca(h

1ree con(ortium and al(o ha( bilateral arrangement with State Bank of India'

enabling the Bank( A1M cardholder acce(( to o8er 0000 A1M( acro(( the

countr!. )BI "et connect( $9 3ffice( and E- branche( located in ## centre('

facilitating (peedier tran(mi((ion of MIS data 5"etwork Map6. 1he network al(o

facilitate( the implementation of Core Banking Solution' apart from D4MA1

(er8ice(' Ca(h Management (er8ice(' fund tran(fer(' me((aging (!(tem' etc.1he

Bank i( u(ing ?SA1 network for connecting branche( and A1M( where8er

lea(ed line connecti8it! i( not fea(ible. =e ha8e 9E0 ?SA1( operational'

connecting /E- branche(e>ten(ion counter( and #/$ A1M(.

9#



CRM in Banking

?/

Customer satisfaction sur5ey

Re(pon(i8ene(( of emplo!ee in dealing with cu(tomerG

Hualit! (er8ice pro8ided b! bankG

9-



CRM in Banking

Cu(tomer care (er8ice of the bankG

99



CRM in Banking

?=

Steps follo8ed by the bank for customer retention

• Hualit! (er8ice i( pro8ided for building good relation(hip with cu(tomer.

• 1he following (er8ice( are pro8ided b! bank for cu(tomer retention

o SMS banking

o Internet banking

o A1M facilit!

o 1elebanking

o Debit card(

o Credit card

o +ocker( etc..

• Bank doe(nt focu( on certain group of cu(tomer' it cater( all group(.

• 1he call centre( of bank are al(o a8ailable.

• All cu(tomer( are gi8en equal (er8ice(.

• Bank track indi8idual problem of cu(tomer.

• According to bank cu(tomer( are (ati(fied with the bank' and it can

be (een b! number of account( opened regularl! and increa(e in bu(ine(( of

bank in all department(.

• It i( 8er! important for the bank to ha8e good cu(tomer relation(hip management

debt of the bank.

• Cu(tomer (ati(faction ultimatel! re(ult( in increa(e in profit of the bank.

9$



CRM in Banking

• 1o help cu(tomer at our be(t.

• 1o keep a track of e8er! complaint and problem( of cu(tomer to (ol8e it and (ee

to it that it doe(nt get repeated.

• Cu(tomer retention i( important.

• Increa(e in number of cu(tomer

• ?ariou( (er8ice( are pro8ided 5e.g. Debit card' credit card' internet banking etc..6

9



CRM in Banking

Chapter 2

Suggestion findings and conclusion

9



CRM in Banking

Suggestions

• Bank (hould increa(e (taff.

• Bank tran(action (hould be full! computeri(ed.

• Cu(tomer care (er8ice of the bank (hould be impro8ed for con8enience

of the cu(tomer(.

• Cu(tomer care (er8ice of the bank (hould be fa(t and re(pon(i8e.

• A1M( (hould be increa(e.

.indings

• CRM i( not a technolog! initiati8e7 man! ha8e confu(ed a( a technolog!

initiati8e' and a((igned the CRM implementation project to their information

(!(tem or I1 group.

• 1echnolog! i( needed in order to implement CRM particularl! the cu(tomi@ation

part but technolog! i( not the dri8er of CRM or the (olution to (ucce((ful CRM

implementation.

• CRM i( not e>clu(i8el! a (ale( initiati8e (imilar to marketing7 CRM i( often

lodged with the (ale( department. 1he (ale( force after all it( e>tremel! clo(e to

their cu(tomer(' under(tanding their need( and want(' and tr!ing to fulfil them.

• Sale( howe8er i( ju(t one functional area that can benefit from cu(tomer

relation(hip management and that i( nece((ar! for effecti8e cu(tomer

relation(hip management.

9E



CRM in Banking

C*C#USI*>

%ro8iding e>cellent cu(tomer (er8ice i( no ea(! ta(k. 1hi( a(pect of bu(ine(( i( a

major force that can make or break profit(. ,owe8er' cu(tomer (er8ice i( rarel!

mentioned in an organi@ationF( mi((ion (tatement nor i( it the top of the

di(cu((ion li(t for (taff meeting( or training (e((ion(. %ro8iding the t!pe of

cu(tomer (er8ice that i( e>pected b! cu(tomer( take a lot of thought and

fle>ibilit! on the part of management a( well a( (taff member(. 1he challenge(

faced b! bank( and their cu(tomer( are man! but the trick lie( in de:m!(tif!ingcomple> financial relation(hip(. 1echnical (olution( deplo!ed b! bank( toda!

are fle>ible' u(er friendl! and meant to facilitate (pecific workflow and

requirement( in implementation proce((e(. In order to (implif! li8e(' bank( ha8e

begun to implement end:to:end technolog! through all department( with the

intention of remo8ing human error from proce((e( pre8iou(l! e>i(ting manual

en8ironment( could not ha8e been adequate for future 8i(ion(' growth plan( and

(trategie(. In thi( da! and age' cu(tomer( enjo! complete lu>ur! in term( of

cu(tomi@ed technical (olution( and bank( u( the (ame for long term' mutuall!

beneficial relation(hip(.

(I(#I*+RAP%-

$0



CRM in Banking

(ook Author

Cu(tomer relation(hip

management

Mohammed' ,.%eeru

Cu(tomer

relation(hip

management

(trategie(

Sheth' jagdi(h. "

and other( ed.

;!(#I*+RAP%-

8888ikipediacom

888ebookscom

888googlecom

http://www.wikipedia.com/

http://www.ebooks.com/

http://www.google.com/

http://www.wikipedia.com/

http://www.ebooks.com/

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