1

A

MANAGEMENT THESIS

ON

AN IMPACT OF E-MARKETING

IN

BANKING SERVICES FOCUSING ON

(RELATIONSHIP APPROACH)

Submitted To: Submitted By:

Poonam Mahendru Yogesh Sharma

7NBYN016

INC- Yamuna Nagar

2

A

MANAGEMENT THESIS

ON

AN IMPACT OF E-MARKETING

IN

BANKING SERVICES FOCUSING ON

(RELATIONSHIP APPROACH)

BY:

Yogesh Sharma

7NBYN016

MBA (2007-2009)

INC – YAMUNA NAGAR

A report submitted in partial fulfillment of

The requirements of THE MBA PROGRAM

INC- Yamuna Nagar

COPIES MARKED LIST: Mrs. Poonam Mahendru (Faculty guide)

3

Abstract

The customer relationship management (CRM) is essential and vital function of customer

oriented marketing. Its functions include gathering and accumulating customer-related

information in order to provide effective services. E-CRM is a combination of IT sector but also

the key strategy to electronic commerce. E-CRM is a combination of software, hardware,

application and management commitment. Aim of e-CRM system is to improve customer

service, develop a relationship and retain valuable customers. E-CRM is a concern for many

organizations especially banking sector. The purpose of this study is to gain a better

understanding of the benefits e-CRM to customers and organization in banking industry. To

justify the purpose two research questions have been addressed and on the basis literature

review, a frame of reference was developed which helped us to answer the research questions

and collect data. A qualitative research approach was used for this study. Empirical data was

collected through in-depth interviews were conducted with two Swedish banks and a group of

their customers. In the last chapter findings and conclusions were drawn on the basis on research

questions. Our findings indicate that Swedish banks are well aware of the benefits and

applications of the e-CRM and use the system to maintain good relationships with their

customers. Our findings also indicate that with the implementation of e-CRM and the latest

technologies. We have found that both the banks seem to have same description about the

benefits of e-CRM. We found that both banks have maintained good relationships with

customers due to the usage of e-CRM. Our finding indicates that with the implementation of e-

CRM and the latest technologies banks have ensured full security for the transactions of their

customer’s. E-CRM facilitates the organizations to provide one to one services and also maintain

the transaction security of the customers.

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I have been of service, if I have glimpsed more of the nature and essence of ultimate good, if I am inspired to reach wider horizons of thought and action, if I am at peace with myself, it has

been a successful day.

“ALEX NOBLE”

ACKNOWLEDGEMENT

Researcher would like to take this opportunity to express my indebtness and gratitude to my

Project guide Mrs. Poonam Mahendru (Faculty guide) for his guidance and the opportunities

he provided to me to work on the project, my project stint would have been a lot harder had it not

been the presence of her who patiently helped and guided me whenever I stood on shaky

grounds. His friendly approach and a professional attitude helped me to enjoy my work

immensely.

Researcher also would like to thank ICFAI National College for giving me this opportunity.

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Table of Contents

Executive summary 8

1. Introduction 9

1.1 Background 10

1.2 Industry overview 12

1.3 Customer services in banks 14

1.4 Customer Relationship Management 17

1.5 Starting of E-Marketing 21

1.6 Overall research purpose 30

2. Literature review 31

2.1 E-CRM Benefits to Bank 32

2.2 E-CRM Benefits to Customers 34

3. Analysis and Interpretation 38

3.1 Cost/Benefit Analysis 39

3.2 Budgeting 40

3.3 Situational Analysis 41

4. Methodology 43

4.1 Title of Study 44

4.2 Objective of study 44

4.3 Research Process 44

4.4 Scope of Study 45

4.5 Limitation of study 45

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5. Findings and conclusions 46

5.1 Synopsis 47

5.2 How can the benefits of E-CRM foe the banks be described 47

5.3 How can the benefits of E-CRM for banks customers are described 48

6. Recommendations 49

7. References 50

7

List of tables

TABLES PAGE NO.

Cost/Benefit Analysis 39

SWOT 42

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Executive summary

The project involves in depth study and analysis of an impact of E-Marketing in Banking

Industry. It also includes the study about E-Marketing. Researcher has to analyze various aspects

related to E-Marketing like, Importance of E-Marketing in financial services; How E-Marketing

differs from traditional marketing, Impact of E-Marketing in Banks Profits.

This project is basically deals with an impact of E-Marketing in banking industry. How E-

Marketing is different from Traditional Marketing. E-marketing is basically is a part of Customer

Relationship Approach (CRM). A greater focus on Customer Relationship Management (CRM)

is the only way the banking industry can protect its market share and boost growth.CRM would

also make Indian bankers realize that the purpose of their business is to "create and keep a

customer" and to "view the entire business process as consisting of a tightly integrated effort to

discover, create, and satisfy customer needs."

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Chapter-1

Introduction

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“By entering into your premises the customer is giving an opportunity to serve him, but you are not doing any favour by serving him”.

- Mahatma GandhiChapter 1: Introduction

Under this chapter an introduction of our topic will be explained, the background is first

presented, proceeding into the problem discussion where the research area is discussed. The

problem discussion will lead to the research purpose and the research questions. Finally,

demarcations and overview of this thesis are presented.

1.1 Background

Changes are taking place dramatically in the marketing environment during the last few years.

Information technology has encouraged several new innovations in the fields of marketing and

business. Effects of information technology in the fields of marketing and management have

emphasized the importance of re-arranging a new plan for marketing that gets benefited from

web technology. In year 1990, many organizations were focusing on how to perform their

transactions with the customers, and how they are going to address their strategies for sales

promotions effectively. But after 1990 it was found that many companies have diverted their

attention towards how organizations can maintain positive and long lasting relationship with

customers. At the same time how to raise loyalty of customers. Thus strategies of organization

have shifted towards customer-oriented strategies. Important factors like providing added

services, recognizing the needs of the customers are termed as factors to decide the fate of

companies. Organizations investigations have put light on importance of retaining customers is

not a great deal than that of attracting new ones. Relationship marketing has turned out to

become important factor in financial services.

Customer relationship management (CRM)

Bose, (2002) described the customer relationship management (CRM), essential and vital

function of customer oriented marketing is to gather and accumulate related information about

customers in order to provide effective services. CRM involves attainment analysis and use of

customer’s knowledge in order to sell goods and services. Reasons for CRM coming into

existence are the changes and developments in marketing environment and web technology.

Relationship with customers is a newly distinguished as a key point to set competitive power of

an organization. Companies gather data related to their customers, in order to perform customer

relationship management more effectively. Web has disclosed a new medium for business and

marketing scope to enhance data analysis of customers’ behaviors, and environments for one to

one marketing have been enhanced. CRM lies at the heart of every business transaction. (ibid)

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Massey et al., 2000 believes that CRM is about attracting, developing maintaining and retaining

Profitable customers over a period of time. In this increased heightened global competition arena, the

new ways of working are firmly shifting into the hands of paying customers and organizations

adapting to e-CRM to CRM.

Electronic customer relationship management (e-CRM)

E-CRM is combination of software, hardware, application and management commitment. E-

CRM can be different types like Operational, Analytical. Operational E-CRM is given

importance to customer touch up points, which can have contacts with customers through

telephones or letters or e-mails. Thus customer touch up points is something web based e-mails,

telephone, direct sales, fax etc. Analytical CRM is a collection of data and is viewed as a

continuous process. It requires technology to process customer’s data. The main intention here

would be to identify and understand customers demographics pattern of purchasing etc in order

to create new business opportunities giving importance to customers. Vital and important key

point is that e-CRM takes into different forms, relying on the objectives of the organizations. It is

about arranging in a line business process with strategies of customers provided back up of

software’s. E-CRM is about people, process and technology and these are key paramount to

success. Traditional definition of e-CRM according to Stanton et al., (1994) is to include attitude

for entire business. Like identifying and defining the prime goal to everyone in the organization

and creating a sustainable competitive advantage. Their study explores how e-CRM enhances the

traditional definition of marketing concepts and enabling the organizations to meet their internal

marketing objectives. It is identified that aim of e-CRM systems is to improve customer service,

develop a relationship and retain valuable customers. Furthermore added advantage would be

that it enhances delineation in customer’s value. Means to motivate valuable customers remain

loyal with the enhanced features of e-CRM, where e makes the huge difference.

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1.2 Industry overview

The liberalization and globalization of Indian economy has taken place almost a decade ago the

focus point in any service organization is “customer service”. It is more so in the banking

industry. The phrases such as “Customer is the king”, “service to customer is service to god” are

more myths but turned out to be realities. Customer service is the base for business expansion

because of the stiff competition prevalent in the banking industry. With the advent of new private

banks in 1995 “the concept of customer service” has become an important and pivotal issue in

banks, be in the public sector, private sector. The survival of banking business is dependent on

customer services.

FOR long, Indian banks had presumed that their operations were customer-centric, simply

because they had customers. These banks ruled the roost, protected by regulations that did not

allow free entry into the sector. And to their credit, when the banking sector was opened up, they

survived by adapting quickly to the new rules of the game. Many managed to post profits. For

them an unexpected bonanza came from government bonds in which most were hugely invested.

Ironically, the Reserve Bank of India's moves to cut aggressively the interest rates after 1999,

pushed up the prices of bonds. So banks had a windfall doing almost nothing. The bond profits,

like manna from heaven, improved the balance-sheets of all banks irrespective of their core

performance. However, the era of lazy banking is soon to end. The mesh of rules that propped up

the Indian banking industry is now being dismantled rapidly.

According to a RBI road-map, India will have a competitive banking market after 2009. As one

of the most attractive emerging market destinations, India will see foreign banks come in, what

with more freedom to come in, grow and acquire. Therefore, it is imperative that Indian banks

wake up to this reality and re-focus on their core asset — the customer. A greater focus on

Customer Relationship Management (CRM) is the only way the banking industry can protect its

market share and boost growth.

CRM would also make Indian bankers realize that the purpose of their business is to "create and

keep a customer" and to "view the entire business process as consisting of a tightly integrated

effort to discover, create, and satisfy customer needs." What is CRM, and what will it deliver to

the banks? CRM is, probably, one of the least clearly defined business acronyms, as there is no

single definition for it. It is probably easier to say what CRM is not. Unfortunately, CRM has

also become a misnomer for a range of solutions from IT vendors, each providing its own spin

on the idea.

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CRM is variously misunderstood as a fancy sales strategy, an expensive software product, or

even a new method of data collection. It is none of these. CRM is a simple philosophy that places

the customer at the heart of a business organization’s processes, activities and culture to improve

his satisfaction of service and, in turn, maximize the profits for the organization.

A successful CRM strategy aims at understanding the needs of the customer and integrating them

with the organization’s strategy, people, and 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.

While this may sound quite straightforward, for large organizations it can be a mammoth task

unless a gradual step-by-step process is adopted. 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.

Indian Retail Banking continues to redefine the credit growth in the country. It grew by a

whopping 44.4% in 2005-06 to touch Rs 3538 billion. This leap was despite the increase in risk

weight by RBI for housing and real estate loans during August, 2005. Housing, which constitutes

more than 52% of all retail loans, grew at a robust rate of 44.35% during 2005-06.  In order to

help banks in India to understand the market and competition and plan future strategies, Cygnus

Business Consulting and Research has just come out with an Industry Insight on Indian Retail

banking – 2006 edition. This report analyses the retail banking market and its segments in India

and presents the key trends, along with issues and challenges. The report also paints a future

outlook for the market. Besides it profiles 21 major players in the retail banking space and their

strategies.

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1.3 Customer services in banks

Importance of Customer Satisfaction:

The importance of customer service for capturing business in banks has become a focus point in

all stages of marketing of banking services, since almost all banks are offering more the same

products with little changes in nomenclature. In the present day situation customer becoming

more and more demanding, bankers need to evolve new approaches, new and innovative

products to keep pace with growing expectations. In order to service the customer more

efficiently and to the highest level of satisfaction technology up gradation is an important aspect

to speed up the servicing in all sphere of banking and to fulfill the customer needs.

Technology

Through technology is helpful in upgrading the services to meet the competition, it will become

a fallout if not operated effectively and efficiently.

Technology-driven products such a debit cards, credit cards, tele-banking, mobile phone

banking, internet banking, fax, e-mail, help desk services, etc. have given more access to

customers to communicate their needs instantly and transact their business promptly. For

technology up gradation banks have to recruit specialists in each field – efficient people a all

levels to provide these services. Bankers have to gear up the customer’s expectation. Bankers

have to learn to use the technological advance to gain the maximum advantage in the business.

Customer Expectations

Customer service is required to be upgraded to satisfy the customer expectations. To render

efficient customer service the banker has to first understand what really the customer wants.

Therefore the bank managements have to continuously innovate and make strategies and evolve

new products to attract the customer. In order to achieve this task banks have to prepare projects

keeping in view the priorities of each segment of customer classified into middle value

customers and high net worth customers. This will enable banks to innovate products to

customer needs. Therefore to attract more and more business bankers are offering products

linked with insurance investments etc. Segmentation is an important aspect in innovating a new

service product. “What the customer wants” is a priority in this direction. All these efforts are

ultimately providing a better service to the customer

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Communication

Interaction with customer is an important aspect in providing better service to the customer to

their fullest satisfaction. Communication with customer at front office level will help bankers to

really identify the needs and priorities of customers. Therefore the role of human resource

department of the bank is to provide efficient staff at all levels. Wherever there is an interaction

with the staff to deal with the customer. It is one of the top priorities of banks to provide good

services.

Relationship management

Relationship manager’s role in providing a better service to the customers is pivotal to the

expansion of banking business. These RMs maintain rapport particularly with high net worth

customers and provide them all the services they need. This will help in not only retaining the

existing customer base but also to capture the new clientele. Relationship is more important to

provide good customer services. Alternatively good services will help the bankers to build up

relationship. Unless the service is provide to the fullest satisfaction of the customers taking

further reference from the existing customer to establish new relationship is difficult. Again this

requires the service to the existing to the existing customers and their patronage to bank.

Mapping the customer needs

In the present day banking though the banking services are technology driven and major role is

played technology in all decision on customer services the tested methods like customer surveys

continue to help the managements in identifying the customer needs. Identifying the customer

needs is important before providing the service so that will help managements to have an insight

into customer needs and attitudes. In order to identify the customer needs banks have to develop

a proactive approach. Such approach will not only enhance the image of the bank in the

customers view point but also provides a satisfaction to the bank for having served the customer

for his actual need customer surveys will help to know the good feeling among customers about

the bankers services bankers enhance customer satisfaction by giving continuous attention to

customer service. Mapping the customer needs is therefore an important aspect in servicing the

customer.

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Service Delivery Standards

In order to maintain good service delivery standards in the operations and the branches of banks

efficient and skilled staff are to be deployed by banks in all branches particularly in front office

these staff should have better communication skills to maintain standards in service delivery. The

concept of service delivery denote proper servicing of the customer by giving an appropriate

answer and solution to the queries raised and service them to the fullest satisfaction. An

expected level of the standard is required to be maintained. To maintain this standard bank’s

branches should have adequate infrastructure and required literature to explain the products and

the personnel at front office. Besides this, the amenities, like seating arrangement to customers,

cash deposit queues etc. are properly maintained; adequate ambience is also maintained for

attraction. The bank should provide all the required facility and operate the schemes provided by

their competitors. These services delivery standard are the basic ones and bankers should

maintain to cater “Good customer service”. “Service with a smile” should be the motto of all the

personal working in the front office and to maintain “service delivery standards”. This is a wider

concept and can be implanted at all levels and echelons of banking organization.

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1.4 Customer Relationship Management

Customer relationship management (CRM) became the number one focus when today’s

competitive retail banks and the Indian banking market space were getting more saturated and

competitive. Retail bank customers are demanding a different relationship with bankers and

suppliers of financial than the traditional sales and transaction model. The new database

technologies enable retail bankers to get the knowledge of who the customers are, what they

bought and when they bought, and even predictions based on the historical behavior.

Customer Relationship Management is a process by which a company maximum customer

information in an effort to increase loyalty and retain customer business over their lifetimes.

The primary goals of CRM are to:

• Build long term and profitable relationship with chosen customer.

• Get closer to those customers at every point of contact.

• Maximize your company’s share of the customer’s wallet.

Managing customers is one of the main issues that banks face in today's hyper competitive

environment. If the service levels are not up to customer expectations, in all likelihood the

customer might take his business elsewhere. This is where Customer Relationship Management

(CRM) practices (most important) and software (on the technology side) play an important role.

Banks, who have absorbed CRM systems have been able to achieve transparency in customer

interface and have made sure that customers receive offers which match with their needs. No

easy task this! Consequently this has resulted in greater income for the bank as CRM 'satisfies

customers and immediately builds loyalty'. Appropriate deployment of CRM systems also

attracts newer customers, which can only be beneficial for any financial institution in the face of

harsh competition.

Another advantage of CRM is that employees are no longer burdened with the task of identifying

opportunities by manually reviewing reports by studying client trends. Cross sell processes can

be launched automatically by connecting transactions to CRM. This empowers the bank and

simultaneously provides information to employees.

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Customers are always undergoing life-changing experiences like marriage, birth of a child,

investing in a new house or opening new accounts. The magic of technology lies in gathering

this knowledge and transforming them into means and ways of strengthening relationships with

customers. Technology helps change the vision of the banks along with important changes in the

lives of their customers.

Mobile banking service is another luxury, which customers can enjoy today. Technology has

enabled customers to access information through the phone instead of physically traveling to

bank locations for the slightest of queries. Phones and advanced web phones have made it

possible for customers to get details of balances, accounts and other transactions without

traveling. Services such as money transfers and personal payments online and through the phone

are already available. Technologies such as Internet banking and mobile banking have certainly

simplified our lives. The best part is that these transactions (online and mobile) can be done in

complete confidentiality and within a secured network, thus, protecting the customer/user from

any fraudulent practices. Customers are enjoying technology in every sense in their financial

relationships with banks. For example: Account aggregation is an existing technology in the

arena of online banking. Moreover features such as chip, PIN, TIN are armed with the potential

of dealing with multiple applications and that too on one card. In this day and age, customers

enjoy complete luxury in terms of customized technical solutions and banks use the same to

cement long term, mutually beneficial relationships.

CRM

Customer:

• A person who buys on products or services from a shop on business.

• A person or thing of a specific kind that one has to deal with.

Relationship:

• The way two or more people are connected or in a state of being connected. The way in

which two or more groups of people regard & behave towards one another.

• An emotional association between two people.

Management:

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• The process of managing.

• The people managing an organisation.

The purpose of CRM

• “The focus of CRM is on creating value for the customer and the company over the

longer term”.

• When customers value the customer service that they receive from suppliers, they are less

likely to look to alternative suppliers for their needs.

• CRM enables organisations to gain ‘competitive advantage’ over competitors that supply

similar products or services.

Why is CRM important

• “Today’s businesses compete with multi-product offerings created and delivered by

networks, alliances and partnerships of many kinds. Both retaining customers and

building relationships with other value-adding allies is critical to corporate performance”.

• “The adoption of CRM is being fuelled by recognition that long-term relationships with

customers are one of the most important assets of an organisation”.

Benefits of CRM

• Improved customer retention & loyalty- customers stay longer, buy more & more often

• Higher customer profitability – lower cost in retaining customers, no need for more

recruitment

• Reduced cost of sales- existing customers are more responsive

• It offers customers an insight into the Company

• It builds a long-term relationship with customers and maximises revenue

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E’s of E-CRM

The ‘e’ in e-CRM not only stands for “electronic” but also can be perceived to have many other

connotations. Though the core of e-CRM remains to be cross channel integration and

organization the ‘e’ in e-CRM can be used to frame alternatives decisions of e-CRM based upon

the channels which e crm utilizes the issues which it impacts and other factors, the ‘e’s of e-

CRM are briefly explained as follows:

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 increase velocity. E-CRM thrives on these

electronic channels

2. Enterprise: Through e-CRM a company gains the means to touch and shape a customer’s

experience through sales, services and corner offices- whose occupants need to understand

and assess customer behavior.

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 consumer accepts in exchange for his or her attention.

4. Economics: An e-crm strategy ideally should concentrate on consumer economics, which

delivers smart assets-allocation decisions directing efforts at individuals likely to provide the

greatest return on customer-communication initiatives.

5. Evaluation: Understanding customer economic relies on a company’s ability to attribute

customer behavior to market programs, evaluate customer interactions along various

customer touch point channels and compare anticipated ROI against actual returns through

customer analytic reporting

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Companies that focus in E-CRM have several benefits-

Serve their customer better, 24 x 7 (and better than competition)

Reach out new customers more easily and build stronger ties with the exiting customers.

Deliver most effective and accountable one to one communication.

Reduce administration and customer support cost.

Speed up order to deliver cycles for faster, better, customer services and more turns.

Maximize the lifetime value of a customer.

Reduce time to market.

Ability to use customer data to drive business decision.

1.5 Starting of E-Marketing

Electronic market

Electronic market is relatively new concept and has crept into business vocabulary around 1970s.

Electronic commerce denote the seamless application of information and communication

technology from its point of origin to its end point along the entire value chain of business

processes conducted electronically and designed to enable the accomplishment of a business

goal. These processes may be partial or complete and may encompass B2B as well as B2C and

C2B transaction (Wigand, 1997).

The E-commerce further leads to the emergence of the ''market space'' - a virtual world of

information paralleling the real marketplace of goods and services - enables marketers to manage

content, context, and infrastructure in new and different ways, thereby providing novel sources

of competitive advantage (Rayport & Sviokla, 1994). With electronic marketing one can think

for business across the globe that was not possible earlier. Traditional way of market

segmentation with an internet audience may not be fruitful. In electronic marketing,

segmentation can be done effectively by considering two key dimensions i.e. potential value of

the segment to the particular market sector and comparative attractiveness of the channel to the

customer (Hymas, 2001).

The 4Ps frame work of traditional product marketing is not appropriate for electronic marketing

due to unavailability of demographics and psychographics of electronic customers. Booms and

Bitner (1981) considered 7Ps frame work for electronic Marketing. All most all the product can

be made available for customer via electronic marketing but few product categories like

Software, music, reports, games, videos etc, products can be delivered online at the same time,

for other products it can be delivered later at the doorstep of the customers. It was initially

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believed that the Internet could benefit organizations because of the decreased costs involved

with distribution, hence improving profit margins if they chose not to pass these benefits on to

customers. But there are some electronic marketers like Amazon.com, have also contributed to

price competition, effectively forcing the competitors to reduce the price. But same time

Bromage (2001) argued that online customers buy online for convenience rather than for price

advantages.

Regarding place, electronic marketing offers potential to shift from a non-virtual marketplace to

a market-space instead, incorporating virtual transaction/distribution spaces. Websites have the

potential to give information, to entertain and be interactive in their communication. Internet can

take over some of the activities offered by the personal sales person (e.g. accepting purchase

orders), but some of the activities undertaken by sales representatives cannot be replaced by

technology.

The Internet allows organizations to make their service delivery system flexible. Because of the

lack of physical proximity in electronic marketing, marketers make use of "virtual evidence" in

the virtual environment. Lack of the personal interface may result in customer distrust of first-

time interaction with electronic channels. It is also more difficult for marketers to build a

relationship with customers whom they never see (Dobie et al., 2001); in such a situation trust (to

reduce transaction cost) can be generated by other means, such as communication messages and

brands.

Electronic marketing proved its effectiveness by reducing the time of shopping and made it easy

for the people to shop. Most of the business houses adopted electronic marketing so far and

many more are in pipe line .Although electronic marketing has proved its success in facilitating

communication and exchange but still it has long way to travel. 

E-Commerce

Electronic commerce (E-Commerce or EC) is an emerging concept that describes the process of

buying and selling or exchanging of products, services, and information via computer networks

including the Internet. It is the use of the Internet and the Web to transact business. Doing

business online, typically via the Web. It is also called "e-business," "e-tailing" and "I-

commerce." Although in most cases e-commerce and e-business are synonymous, e-commerce

implies that goods and services can be purchased online, whereas e-business might be used as

more of an umbrella term for a total presence on the Web, which would naturally include e-

commerce (shopping) component.  E-commerce may also refer to electronic data interchange

23

(EDI), in which one company's computer queries and transmits purchase orders to another

company's computer.

E-commerce in the banking sector

The impacts of e-commerce on the banking sector potentially can be profound. Banking assets

and products are primarily ‘intangibles’, many of which seem ideally suited to digitization and

on-line distribution. Wholesale banking already relies heavily on electronic systems, but these

are mainly proprietary networks, open only to restricted groups of users. Internet-based banking

applications are superficially ideal for many types of retail banking services, but this is as yet a

relatively small segment of the banking market.

Use of the Internet in banking operations can be considered a logical step as the new technology

is basically an increment in an already evolving operational infrastructure. For a time, predictions

were common that the increasing use of the Internet would shake up existing market structures and

threaten the dominance of established companies. In the financial sector a myriad of internet start-ups

quickly began tapping into product markets traditionally served by banks.

Moreover, established companies from related markets (like insurance) and unrelated markets were

expected to be well suited for offering online banking products. The reality is that the established

banks are still the major suppliers of banking products and services. Alternative suppliers (especially

internet start-ups) have not (yet) been able to form serious competition in the Netherlands or

elsewhere. There are a number of reasons for this. First, the supply of financial services through the

Internet has similarities with the existing banking business and its infrastructure. Second, gaining and

keeping new customers for banking services comes at great expense (Bagijn, 2001).

Established banks hold a preferential position over newcomers in this respect. Also, start-ups have a

number of disadvantages compared to the traditional financial service suppliers. Banks in general

have the advantage of a well-known brand name and well-established customer trust. Moreover, a

number of factors can make large companies (such as banks) better suited for implementing new

technologies. Comparing small companies (Internet start-ups) with the large banking organizations,

Wolffen buttel and Stegwee (2001) mention a number of reasons why the larger banks generally are

more innovative if it comes to the use of e-commerce.

E-Business

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E-Business is a revolution that is transforming companies round the world, and it is impacting all

the industries. E-business is much more than online purchase and implementation of computer

applications by the IT departments; or putting up a company website. E-business affects the

whole business and the value chains in which it operates.

It enables a much more integrated level of collaboration between the different components of a

value chain than ever before. Adopting e-Business also allows companies to reduce costs and

improve customer response time. Organizations that transform their business practices stand to

benefit immensely from innumerable new possibilities brought about by technology.

Although it's early days for e-Business in India, we believe there are greater opportunities over

the long term for India and Indian businesses. There is urgent need to usher in farsighted policies

& practices to become a major economic force in the emerging world of E-Business.

E-business includes

E-business is not just about selling over the Internet. It's a 'catch-all' term for any business done

electronically. Amongst other things, it can include:

Computers and computer networks, sometimes called IT (Information Technology) or ICT

(Information and Communication Technology)

Communicating by email

Running a website

Using the Internet to market your business or service

Using databases for contact management, stock control, or to communicate with  suppliers

Using business software.

Electronic banking

It is an umbrella term for the process by which a customer may perform banking transactions

electronically without visiting a brick-and-mortar institution. The following terms all refer to one

form or another of electronic banking: personal computer (PC) banking, Internet banking, virtual

banking, online banking, home banking, remote electronic banking, and phone banking. PC

banking and Internet or online banking are the most frequently used designations. It should be

noted, however, that the terms used to describe the various types of electronic banking are often

used interchangeably. 

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PC banking 

PC Banking is a form of online banking that enables customers to execute bank transactions

from a PC via a modem. In most PC banking ventures, the bank offers the customer a proprietary

financial software program that allows the customer to perform financial transactions from his or

her home computer. The customer then dials into the bank with his or her modem, downloads

data, and runs the programs that are resident on the customer's computer. Currently, many banks

offer PC banking systems that allow customers to obtain account balances and credit card

statements, pay bills, and transfer funds between accounts. 

Internet banking,

Sometimes called online banking, is an outgrowth of PC banking. Internet banking uses the

Internet as the delivery channel by which to conduct banking activity, for example, transferring

funds, paying bills, viewing checking and savings account balances, paying mortgages, and

purchasing financial instruments and certificates of deposit. An Internet banking customer

accesses his or her accounts from browser- software that runs Internet banking programs resident

on the bank's World Wide Web server, not on the user's PC. Net Banker defines a " true Internet

bank" as one that provides account balances and some transactional capabilities to retail

customers over the World Wide Web. Internet banks are also known as virtual, cyber, net,

interactive, or web banks.

To date, more banks have established an advertising presence on the Internet- primarily in the

form of informational or interactive web sites-than have created transactional web sites.

However, a number of Banks that do not yet offer transactional Internet banking services have

indicated on their web sites that they will offer such banking activities in the future.

Internet banks generally have lower operational and transactional costs than do traditional brick-

and-mortar banks, they are often able to offer low-cost checking and high-yield Certificates of

deposit. Internet banking is not limited to a physical site; some Internet banks exist without

physical branches, for example, Telebank (Arlington, Virginia) and Bank net (UK). Further, in

some cases, web banks are not restricted to conducting transactions within national borders and

have the ability to make transactions involving large amounts of assets instantaneously.

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According to industry analysts, electronic banking provides a variety of attractive possibilities

for remote account access, including:

Availability of inquiry and transaction services around the clock;

worldwide connectivity;

Easy access to transaction data, both recent and historical; and

"Direct customer control of international movement of funds without intermediation of

financial institutions in customer's jurisdiction."

E-Marketing:

Before trying to define the term of E-marketing (or electronic marketing, so to speak), we should

first take a look at the premises of its apparition and development.

The theories concerning E-Marketing have not been unified yet, due to a large diversity in

specialists' opinions. Still, one of the aspects that is established and has ceased being discussed in

contradictory is the fact that electronic marketing first appeared under the form of various

techniques used by companies distributing their products through online channels (Internet –

based). That happened back in the pioneering age before 1995. These companies that opened the

road were called "E-tailers", as opposed to the traditional retailers (also known as "brick-and-

mortar" retailers). During their limited life, these electronic retailers began to develop and

frenetically introduced new marketing techniques based on the support offered by the internet.

The online technologies mentioned above developed in the context created by the E-Tailers, they

are widely used these days by B2C and B2B organizations. In other words, they evolved towards

what we call now E-Marketing (you can also spell it e-Marketing if you wish, the "e-" stands in

both cases for "electronic").

You might find as extremely useful and suggestive the perspective offered by the E-Marketing

Association (EMA). You heard a lot, especially over the past 2 years, about the decline of online

businesses (or the decline of dotcoms), but this temporary difficulty can be viewed as a similarity

27

to the impasse of Columbus during his expedition that made him famous more than half

millennium ago. The initial "business plan" with which Columbus started this trip (that of

bringing the Asian resources in his country and getting fabulously rich) was a complete disaster:

catastrophic estimations, not enough resources allocated, total lack of information upon the

environment he will develop his "business" in, but... he discovered America instead and changed

the world for ever. In a similar manner, we can say that the dotcoms, despite their terrible

strategies (if any), "discovered" by mistake the world of E-Marketing.

As we already noticed, defining E-Marketing is still highly problematic. Still, what do we mean

when we use this term? As many other English words, the term was born by adding the prefix

"e-" to a term already known and used, in this case "marketing". The prefix "e-" is actually the

extreme contraction of the word "electronic" and is quite omnipresent in today’s language of

many people: "e-marketing", "e-business", "e-mail", "e-learning", "e-commerce", "e-", "e-",

"e-"...

Definition of E-Marketing:

• “E-Marketing is the use of internet as a media to market and promote your business

globally”.

• “E-Marketing is a generic term utilized for a wide range of activities – advertising, customer

communications, branding, fidelity programs etc”

Advantages of E-Marketing:

When compared to traditional marketing, E-Marketing is the apt way to promote your

products and services globally. There are many advantages some of which are listed below.

Global Reach

No physical or geographical limitations- The use of the internet as the mainstay

of operations virtually eliminates geographical boundaries.

Access to unknown buyers and sellers.

Own your virtual office.

Always accessible (24/7)

Enhance your business prospects and profits.

Reach target audience.

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Publicizing your business through various chambers of commerce & Industry and

Trade Associations.

Easy Marketing

Classified information on competitive products.

Acquire product knowledge.

Compare products & Services.

Economics

Cost effective strategies.

Faster & easier access to products, buyers and sellers.

Save Time and money you spend on sending faxes, couriers etc.

Save money you spend on printing Catalogs, Brochures and other promotional

material.

Updates

Change of content is possible immediately.

Add new products and services.

Link other principle sites to your e Brochures for wider content reach.

Add latest news, events and other information immediately.

More attractive compared to physical brochures

Graphical user interface.

Provide product animations.

E-Marketing services

In order to effectively use e-Marketing to promote your products and services globally, there are

various methods and tools used to do the same. You can use our services listed below to enable

you in effectively e-Market you company.

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E-brochure

Similar to a normal printed brochure, an E-brochure (Web site) also provides company related

information. The difference arises from its power to reach global markets at a negligible cost.

An E-brochure contains information such as company history, team, infrastructure, products,

services, contact information and an Enquiry-Form for prospective clients to send enquiries.

E-Catalog

Just as any printed catalog, an E-catalog provides product information. However, the E-catalog

furnishes product details on a more intricate level, supported by superior presentation techniques.

Category-wise product description, Different views of products including an animated

presentation with voice facilities can be achieved through the E-catalog.

E-Mailer

E-mail is the fastest and most economical method of communication in business communities.

You can rarely find a business card without an E-mail address. The potential uses an E-mailer

can be put to be.

• Sending promotional material to buyers or suppliers.

• Updating clients or users about the latest upgrades on the product.

• Reminders about renewal of business contracts or services.

Six simple steps to start e-Marketing

Starting e-Marketing is easy but walking on the right path is not so easy. There are just too many

options you can consider! However, typically I would recommend my clients to follow 6 simple

steps to plan and start doing e-Marketing and they are:

1. Building Effective Website

2. Designing Compelling Messaging

3. Sending Strategic Newsletters

4. Online Advertising

5. Managing Customer Databases

6. Building Alliances

Building an Effective Website - I have shared in other articles how important it is a website for e-

30

Marketing to be successful. It is not only design and layout but also the real business strategy

behind. You have to consciously to make your website effective for your business and engaging

your customers interactively. A website will only perform well when it is being revised and

updated according to the environmental changes with Compelling Messaging.

Designing Compelling Messaging - It is really back to marketing basics about communications.

You have to high play your products/services' benefits rather than functionality in order to

distinguish your differential advantages over your competition. A lot of time, customers' buying

decisions are based on trusts that built on the success references you are giving of other cases.

Before you get this right, e-Marketing will never be a success.

Sending Strategic Newsletters - e-Newsletters are so easy to send out if you have any emails of

our suppliers, partners, customers and prospects. However, your compelling messaging must be

ready before your e-Newsletters can be successful. In additional, you need to send out useful

information or knowledge occasionally other than sales promotions in order to attract your target

audience to keep subscribing your newsletter.

Online Advertising - The most basic Online Advertising option I recommend is Search Engine

Marketing. It is becoming mandatory for any companies nowadays to make sure their company

information/advertisements are showing on the first page of search results. Without doing this,

your website will just never be found in a very long while, Other Online Advertising options can

be Web Banner Ad on your target customers populated websites or contextual advertising, etc.

Managing Customer Databases - When you start doing e-Marketing, the next important thing is

to keep up with your customer database(s). This is very crucial because your customer database

will grow throughout your e-Marketing activities. The most basic way to do this is to use Excel or

Outlook or any other mail clients but as you grow your customer database, it is better to adopt

Customer Relationship Management software or a e-Marketing campaign software.

Building Alliances - No one can be successful by doing e-Marketing alone and this is the fact!

Hence, building alliances and letting your alliances to promote your products/services in their

websites and other channels are the very key to success with e-Marketing. You potential return on

investment (ROI) will grow even better than you can imagine.

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1.6 Overall research purpose

Considering the discussion above, the purpose of this study is to gain a better understanding of

the benefits of e-CRM to customers and organization in banking industry.

To justify the purpose the following questions are addressed:

RQ1: How can the benefits of e-CRM for banks are described?

RQ2: How can the benefits of e-CRM for bank customers are described?

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Chapter – 2

Literature Review

33

Chapter 2: Literature Review

In the previous chapter, an introduction and background to the research area of this study was

presented as well as overall purpose and research questions. This chapter presents a review of

literature relating to each of the 2 mentioned research questions.

2.1 E-CRM-BENEFITS TO BANK

Computers, information technology, and networking are fast replacing labor-intensive business

activities across industries and in government. Since the early 1990s, the computer, the Internet,

and information technology have been merged to become a viable substitute for labor- and paper

intensive banking processes between and across commercial banks. This has been seen in the

widespread use of the ATM, credit cards, debit cards, smart cards, and lending through e-CRM

via the Internet. This type of computer-based bank-to-bank, bank to consumer and consumer-to

consumer transactional and informational exchange has been referred to as Electronic Commerce

(EC). The term EC which taken place out of e-CRM and benefits of e-CRM to bank and its

customers presented below.

RELATIONSHIP WITH CUSTOMERS

A CRM is an idea, which has its heredity line in the technology. In the earlier days relationship

marketing’s sole aim was to get information about the preferences of the customers and the

information, which was stored by them in their databases, So as to protect and deal with one to

one relationship with customers CRM was developed. Once when the organization acquires the

customers and is able to have them lastingly forever, this implies that the customer becomes

more loyal and making good use of the services of the organization. Trust, cooperation and

satisfaction have to be seen as the face of assurance between both the parties, for a long lasting

relationship with customers. Organizations need to be in constant touch with their customer’s in

order to build up long-term relationships.

USING E-MAIL FOR BUSINESS COMMUNICATION

The most popular tool for customer service is e-mail. Inexpensive and fast, e-mail is used to

disseminate information (e.g. catalogues), to send product information and order confirmations,

to conduct correspondence regarding any topic with customers and business partners, and

responding to enquiries from customers. To answer a large number of emails quickly and cost-

efficiently automated e-mail reply systems are increasingly implemented. Automated e-mail

reply responses to customer inquiries are developed using intelligent agents that recognize key

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words and quickly respond to common queries. However, the greatest advantage of e-mail as a

communication tool is providing quick and accurate information to all customer queries. E-mails

can include forms, reviews, referrals and new contacts sent to customers as attached files and

how e-CRM bringing bridge between bank and customer through email business communication.

PERSONALIZED SERVICES OR ONE TO ONE SERVICES

Personalization is a strategy that can be easily differentiated and which cannot be simulated by

competitors in the market. A good personalized idea will enhance in the increase of sales,

improves the customer relationship. Personalization can be defined as serving the unique needs

of individual customers. By improving the customer conversations the organization can improve

the customer relationships. Personalized services are not only limited in cheering new sales, but

its successful implementation allows the organization to improve its effectiveness and efficiency

in serving the customers established already. Identifying the needs of the customers and

providing them a best solution before he makes a request shows excellence in service of the

customers. Presently customers do not visit their banks for other kind of additional services such

as finance, credit cards etc. customers still see the banks as providing bank services. Customers

of the banks are becoming choosier and the success of the banks does depend upon this.

ESTABLISHING A WEB SITE TO MARKET PRODUCTS OR SERVICES

E-CRM providing cost savings, opportunism, and threats drive action and innovation even in

conservative banks. They have influenced how banks must reposition themselves to take

advantage of new opportunities that include establishing new service delivery channels and new

markets for existing services (loans, letters of credit, etc.) Many banks have already built web

sites on the Internet, offering banking services. Leveraging the power of the web is a move from

static pages to dynamic applications that are connected to bank data. (ibid)

TRANSACTION SECURITY

Safety was seen as a major barrier to Internet banking. Banks were worried about unauthorized

access to their systems, and customers were concerned about the protection of their personal data

and the risk of false transactions. Banks have been able to manage security with least

repercussions. Banks are exploring alternate security measures such as electronic signatures,

digital certificates, smart cards and biometrics. A major problem with most of these measures is,

their complications and cost to adopt and maintain. Furthermore, in many countries, electronic

signatures are not enforceable by law. the e-purse bombed several years ago, and smart cards

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have been lukewarm at best. It is evident that banks are trying to ensure secure payment on the

Internet. However, most favorable solutions keep on avoiding them.

2.2 E-CRM-BENEFITS TO CUSTOMERS

Bank customers form expectations derived from many sources proposed that customers form

expectations of what will happen in their next encounters based on what they “deserve”. Identify

two levels of expectations, desired service and adequate service. Desired service represents the

“wished for” level of performance and adequate service reflects showing more basic service

expectations. The model permits exploration of the perceived difference between expected

service and the experienced service, particularly the zone of tolerance developed by

Parasuraman. They’re by customer specific benefits are under for the study.

CUSTOMER INTERACTION AND SATISFACTION

The importance of e-CRM technology in bank-customer interactions remains undisputed,

commentators; nevertheless, emphasize how customer evaluation is shaped by social and

personal forces. Interaction has got a very prime place in the banking services. However in order

to make the interactions good it is highly important that both banks as well as customers actively

involve themselves in the interaction. The relationship, which is maintained between customer

and organization, has always a special place in the banking industry when compared to other

industries. The interaction process has includes three major factors.

1.) Information exchange

2.) Business or financial (transactions)

3.) Social exchange

He further explained thus the transaction process involves engaging both bank and customers in

common satisfying terms. The bank should know what exactly the client wants; at the same time

client should also make sure that has enough knowledge about the bank offerings. Social

exchange involves more of maintaining long-term relationship with the customers. Confidence,

trust, ethics and friendship to some extent are the aspects of the social exchange.

CONVENIENCE

With the increasing knowledge and superiority, of the customers banks are now trying to woo the

customer by determining the aspects, which are really vital for them. Thus the aspects may

include facilities, reputations, service, operation hours, interest on savings as well as on loan,

location of the bank, convenience, friendliness, responsiveness, efficiency of employees,

ambience of the banks, etc. Convenience plays a vital role when selecting a brand and if the

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customers are not happy with the convenience of a particular brand. It doesn’t take much time to

switch brands. The extent of influence of the convenience on the customer is that it can also

make the loyal customers to switch the brands. Location is considered to be convenient if it helps

the customer to reduce the travel costs. Location also has broader impact on convenience

includes time, place, acquisition etc. It has also greater influence on other convenience

dimensions and is believed to be a precondition for other types of convenience. A convenient

location is often considered o be an additional service aspect of the core services.

SPEED OF PROCESSING THE TRANSACTION THROUGH E-RESPONSE

Faster processing the transaction by e-CRM, the fact that responses to customer queries, order

acknowledgement, delivery and payment information via emails or automated responses are

greatly appreciated by customers. It has also been highlighted that the nature of e-responses also

helps strengthen the relationship between the supplier and the customer and makes up for the

personal response that prevails in the traditional shopping arena. One of the business respondents

emphasized that “via e-mail order acknowledgment, we recognize and address our customers by

their first names”, strengthening e-relationships with this service. Another business viewed that

“a close relationship with customers can be developed from a distance with e-responses”. E-mail

responses were widely used by businesses to acknowledge receipt of orders, payment and

delivery of information. An e-response to say thank you, an apology for any delays, tailored e-

mails from analysis of shopper profile to provide online shopping guidance and to announce the

release of new products and specials supported online shoppers. Customer responses confirmed

the value of e-responses in the B2C e-space, E-CRM how timely responds to customer for their

requirement?

TRUST

it is an attitude of trust among the partners of substitute. It’s a vital aspect for understanding the

potency of marketing relationships. Trust is an essential relationship structure, which is found in

most of all relationship models. Trust factor can be seen in many ways like motivation to depend

on a substitute partner and one who sees confidence in him.

SERVICE QUALITY

Service quality has its connections with the events that are behavioral like the outcomes from a

mouth of a human being. There’s a lot of attention that has been focused in the relationship

between service quality and its outcomes such as profitability and retention of customers and

their loyalty. Five proportions of service quality are reliability, responsiveness, quality, empathy

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and assurance. Service quality is an important criterion that is being used by the customers in

selecting a bank. Accounts, transactions accuracy, carefulness, factors in subject with functional

quality, availability of the information technology, helpful and friendly personal and

effectiveness in correcting mistakes are the most important determinants for the customers to

determine the bank.

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Chapter - 3

ANALYSIS AND

INTERPRETATION

39

CHAPTER -3

ANALYSIS AND INTERPRETATION

3.1 Cost/Benefit Analysis

Benefits from E-Marketing: Cost of E-Marketing:

o Revenue increases o ISP Costs

o Cost decreases o Hardware and Software Costs

o Intangible benefits o Design Costs

o Goodwill o Maintenance Costs

o Brand/Image Building

o Relationship Building

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3.2 Budgeting

Evaluate the cost/benefits analysis & Identify Potential Revenue Streams

• E-Commerce – Do we sell on-line

• Content Sponsorship – Banners, Buttons, Sponsorships

• Intermediary Fees – Broker and Agent Fees

Revenue Streams

Initial funds to support a Web site come from:

• Investors

• Loans

• Firm’s operating budget

Revenue streams that produce Internet profits come mainly from:

• Direct sales

• Advertising sales

• Other fees

Cost Savings By Selling and Marketing On-line

• Eliminating elements of the traditional distribution chain

• Increases possibilities of greater revenue

• Saves on traditional marketing costs (printing, postage)

• Increases target market to world-wide audience

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Intangible Benefits

The industry is developing exponentially creating new marketing opportunities, although they

may be hard to measure.

• Goodwill

• Brand Equity

• Audience Measurement

• Public Relations

• Customer Satisfaction

3.3 Situation Analysis

• Conduct An Environmental Scan

Legal/Political Environment:

Taxation, access, copyrights, & encryption

Technological Environment

Communication Infrastructures

Bandwidths, and New browsing devices

• Conduct an Environmental Scan

USER Trends:

Focus on how the net audience has changed over the last six months, last

year, etc…

Are there any trends.

Is there any important target segments coming online.

World Economies :

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Understand overseas economies, also do they have the proper

infrastructures to support what we are doing?

Develop a Market Opportunity Analysis

• Market Opportunity Analysis includes both demand and supply analyses.

• The demand portion reviews various market segments in terms of potential profit.

• The supply analysis review competition in selected segments that are under consideration

• The purpose of the supply analysis is to assist in forecasting segment profitability and

finding competitive advantages in the online market.

SWOT

Internal Capability Examples

Customer interactions E-commerce, customer service, distribution channels

Production and fulfillment SCM, production scheduling, inventory management

People Culture, skills, knowledge management, leadership and

commitment to e-business

Technology ERP systems, legacy applications, networks, Web site,

security, IT skills

Core infrastructure Financial systems, R&D, HR

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Chapter - 4

Methodology

44

Research methodology

Research methodology means the various means or methods used for collecting the data for our

study. During the course of this study we come across many people and completed research by

the help of receiving data from these people.

4.1 Title of Study

A Management Thesis on an Impact of E-Marketing in Banking Services Focusing on

(Relationship Approach)

4.2 Objective of study:

• To analyze about E-Marketing.

• To analyze the importance of E-Marketing in financial services.

• To analyze how E-Marketing differs from traditional marketing.

• To analyze the advantages of E-Marketing to the organizations.

• To analyze the impact of E-marketing in banking services.

• To analyze about E-Marketing strategies in banking industry.

• How are the characteristics of banking evolving within the financial sector as a whole as a

consequence of e-commerce?

• What is the influence of electronic commerce on the value-added structure of the banking

market?

4.3 Research Process

Research work done through questionnaires/ survey

Probable sample size of 100 respondents

Internet/ research findings

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4.4 SCOPE OF STUDY:

Two types of data have been collected for completing the study, those were:-

• Primary Data

• Secondary Data

Primary Data:

• Primary data was collected through Questionnaire

• Data was collected from employees separately.

• Sample of the employees was taken on random basis.

Secondary Data:

Secondary Data was update from company’s Broachers, Internet, Journals, and Magazines etc.

4.5 Limitation of study:

Although sincere efforts were made to collect maximum and authentic information from the

respondents, even then this report is subject to following limitations and problems:

• The respondents were quite reluctant in providing exact data.

• The time was also major hindrance, which was not enough for research.

• While formulating the questionnaire there might be some errors that could affect the

research.

• Data was collected from limited people due to time constraint.

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Chapter – 5

Findings and conclusions

47

5.1 SYNOPSIS

This study attempted to shed lights on benefits of E-CRM both with the organization and the

bank customer who are benefited with E-CRM in relation to the E-business environment. In

particular the purpose of my research was to gain a understanding of the benefits of E-crm to

customer and organization in banking industry. Based on this purpose researcher formulated the

two research questions which researcher thought would provide us with a good insight regarding

the E-CRM benefits. These research questions aimed to explore how the companies would take

these benefits into consideration and implement to acquire more customers in order to generate

more revenue to the organization. And how the benefits would benefits the customer.

Since benefits of E-CRM theory refers to the application of the concept as part of the company’s

strategies the empirical data be collected from the organization management perspective. Thus

the analysis of the acquired of the empirical data can provide the researcher with a more holistic

and general picture of E-CRM benefits that the companies and customers would bet benefited.

However the data is collected for these two research questions by interviewing the bank

employees and customers in order to get good quality of data. In general researcher believes that

respondent provided the relevant information which balanced the quality of the two research

questions. Taking the above into consideration below researcher discussing the findings and

conclusions regarding each research question.

5.2 How can the benefits of E_CRM foe the banks be described?

Researcher has found that banks have maintained good relationship with customers due to the

usage of E-CRM by mainly providing good products and services according to the need of the

customer. Banks are using e-mail to a very little extent in order to communicate with their

customers and this is mainly due to the security and privacy reasons it was further founded i the

banks haven’t been working on a large scale for using e-mail for communication to market their

products and services.

E-CRM has enabled both the banks to provide personalized services and one to one services to

their customers both the bank have successfully implemented e-CRM in order to ensure

efficiency and effectiveness in the service to its customers but these services are offered only at

the request of the customers.

Organizations have ensured and have taken enough measures to see that the latest and updated

information is available through their websites. Websites have become their new and effective

means of communication with the customers. Information about their products and services can

be found very easily.

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With the implementation of e-CRM and the latest technologies banks have ensured full security

for the transaction processed by their customers. Initially convincing them to use the online

banking facilities was found to be a hard task. But banks have demonstrated their abilities for

safe and secure transaction which resulted in customer making full usage of the online services.

Conclusion

The following conclusions are drawn from the above findings.

E-CRM enables financial institutions and organization to maintain relationship with

customers.

Less usage of e-mail for their business purpose was adapted by the both the

organizations.

E-CRM facilitates the organization to provide personalized and one to one effective

service.

The organizations have made it certain that latest and updated information is available in

their organization website.

Latest techniques and measure and E-CRM were used to improve and maintain

transaction security of the customers.

5.3 How can the benefits of e-CRM for banks customers be described

Almost all of the customers considered customers interaction and satisfaction as an important

benefits provide by the banks through the usage of E-CRM, they emphasized the importance of

good response to the customer queries, providing assistance to the customers, exchange of

business information and employees having excellent knowledge about the offerings and

services of the bank.

All the customer perceived convenience factor a vital benefit provided by E-CRM. All of the

customer considered location of the bank, friendliness of the bank staff their services as

important benefits for building good relationship. Most of the customers considered speed of

processing transaction through e-response as an important benefit though few did not consider it

as an important benefit. Speed of processing the transaction through e-response was found to be

an important advantage perceived by most of the customer. But few customers were found to

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have partially negative feeling towards the speed at which their transactions have been

processed.

Quality in the products and services of the bank is an important benefit perceived by the

customer. Reliable employees of the organization responsive rate of bank personal availability of

the latest information technology were found to be the most important determinant advantages

perceived by the customers.

Trust in the services all the customers in their respectful bank found activities of the

organization. Confidence in the banks personal their effectiveness in handling the accounts of the

customers were seen as some of the factors enhancing the trust factor of the customer. This is an

essential benefit that improves customer’s relationship with the organization.

Conclusions

Customer interaction and satisfaction is found to be an important benefit provided by

banks using E-CRM.

Convenience is a major benefit provided to the customer of the banks.

Speed at which the transactions have been processed and their rate of accuracy is an

advantage provided by banks through the usage of E-CRM.

Reliable employee’s availabilities of the latest information technology were some of the

added benefits provided by banks to its customers.

Trust in all overall services of the organization is an important benefit provided to the

customers.

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RECOMMENDATIONS

Banking CRM needs to improve

“A new report indicates that banks are moving towards a customer-centric approach and investing in

CRM technology - but that it is a slow process. What's holding them back and what lessons still need to

be learned”

Banks are facing increased competition, credit crunch consolidation and a need to improve brand

image, so you'd think that CRM would be a major priority, helping them to identify and retain

profitable customers. And it is – up to a point. According to a report commissioned by SAP and

conducted by the European Financial Management and Marketing Association (EFMA), banks

are moving towards a customer-centric approach, but it is proving to be a very slow process.

More than half of banks in Europe and the Middle East claim to view customer-centric activities

as a strategic differentiator and plan to invest in CRM technology, but also cite many challenges

including price competition, pressure to lower operating costs, fragmentation of customer

segments and channel proliferation. "In the current economic climate, it is more important than

ever for banks to have as much insight as possible into the financial needs and behaviors of their

customers and prospects "In recent months, SAP has experienced the investment banks are

making in standardized software for their core processes," said Julian Johnson, senior vice

president, industry business solutions, Global Field Operations, SAP."As the survey results

support, a bank's customer-facing activities are now an integral part of its business and included

in its criteria for selecting standardized software. The value this brings to a bank is seamless

integration of its back-office functions, which will provide a true end-to-end view of the

customer."

The report also found that CRM at a typical bank is driven by individual departments and is

primarily a front-end process, rather than extended across the enterprise and that once

implemented, banks have limited information to measure the success or otherwise of their CRM

deployments. Respondents to the survey said that their CRM strategies are still primarily front-

end focused and situated on old legacy systems that lack the flexibility and scalability needed to

look across the enterprise and connect customers in different lines of business to each other.

Martha Bennett, research director, financial services technology at Data monitor, said:

"Providing a level of service that makes the client feel well-looked after and valued is as critical

as the ability to offer the most optimal product at the right time. In order to achieve this, banks

need to ensure that they have systems and processes in place that allow a view across distribution

channels and avoid organizational silos.

51

REFERENCES

1. WWW.Google.Com

2. WWW.Wikipedia.Com

3. “CRM in Banking” edited by- V.V. Gopal

4. “Effective CRM” edited by- Braj Mohan Chaturvedi

5. “E-MARKETING- The Emerging Trends” ICFAI