Professional Documents
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PROJECT
ON
NEEDS OF CRM IN BANK
SUBMITTED BY
KESHARWANI VRIKSHA RAJBALI
THE AWARD OF THE DEGREE OF
BACHELOR OF BANKING AND INSURANCE
(BBI):SEM . V
EXAM N0:13
ACADEMIC YEAR 2017-18
GUDIED BY
URVI GADA
Examiner: - _______________
Date: - __________
College Seal
INDEX
SR.NO CONTENT
1. Introduction To CRM
2. CRM In Bank
3. Benefits of CRM
4. Challenges for CRM
Implementation
5. Case Study
6. Conclusion
7. Bibliography
EXECUTIVE SUMMARY
Although banking is an old activity and has roots on Economics, Finance and
Commerce, the concept of Customer Relationship Management is of recent
origin. To many people Customer Relationship Management means is A co-
ordinate approach to the selling process allowing the various operational,
customer contact and sales promotional functions of an organization to functions
as a whole. Universally conducting efficient banking operations and associated
business involves managing;
the information and communication technology that drives bank score business.
Customer relationships.
Risk associated with conducting business with customers and other banks and
financial institutions. Successful banks all over the world have invested
considerably in customer relationship management technologies, which in turn
would increase banks profits considerably on one hand and improve the level of
their customers in doing business with them on the other hand. Further such banks
are very sensitive to the risks they face in dealing with money in the form of
credit risk or market risk or operational risk. Banks continuously embrace, with
great favour the latest development in customer relationship management and
information and communication technologies in order to service better and reap
more profits. If banks employ cutting-edge technologies to service their customers
efficiently, regulatory requirements.
CRM OVERVIEW
1.2 MEANING OF CRM:-
Customer Relationship Management is the establishment, development,
maintenance and optimization of long-term mutually valuable relationships
between consumers and the organizations. Successful customer relationship
management focuses on understanding the needs and desires of the customers and
is achieved by placing these needs at the heart of the business by integrating them
with the organization's strategy, people, technology and business processes.
At the heart of a perfect CRM strategy is the creation of mutual value
for all the parties involved in the business process. It is about creating a
sustainable competitive advantage by being the best at understanding,
communicating, and delivering, and developing existing customer relationships in
addition to creating and keeping new customers.
DEFINITION OF CRM
Customer Relationship Management (CRM) is a co-ordinate approach to the
selling process allowing the various operational, customer contact and sales
promotional functions of an organization to function as a whole.
2.1 INTRODUCTION:-
Today, customers have more power in deciding their bank of choice.
Consequently, keeping existing customers, as well as attracting new ones, is a
critical concern for banks. Customer satisfaction is an important variable in
evaluation and control in a bank marketing management. Poor customer
satisfaction will lead to a decline in customer loyalty, and given the extended
offerings from the competitors, customers can easily switch banks. Banks need
total average effectively on their customer relationships and make better use of
customer information across the institution.
Competition in the financial services industry has intensified in recent
years, owing to events such as technology changes and financial industry
deregulation. Conventional banking distribution has been gradually supplemented
by the emerging use of electronic banking. Many bank customers prefer using
ATMs or a website rather than visiting a branch, while technology has also
reduced barriers to entry for new customers.
STEP TO FOLLOW the following steps minimize the work regarding adoption of
CRM strategy. These are:
Identification of proper CRM initiatives \
setting standards (targets) for each initiative and each person Involved in that
circle
evaluating actual performance with the standard or benchmark
ICICI BANK:
Focus on ICICI Banks Initiatives
The use of Customer Relationship Management (CRM) in banking has gained
importance with the aggressive strategies for customer acquisition and retention
being employed by banks in todays competitive milieu. This has resulted in the
adoption of various CRM initiatives by these banks to enable them achieve their
objectives.
The steps that banks follow in implementing Customer Relationship Management
(CRM) are:
Identifying CRM initiatives with reference to the objectives to be attained (such
as increased number of customers, enhanced per-customer profitability, etc.),
Setting measurable targets for each initiative in terms of growth in profits, number
of customers, etc. and
Evaluating and choosing the appropriate Customer Relationship Management
(CRM) package that will help the company achieve its CRM goals (a comparison
of pay-offs against investments could be carried out during the evaluation
exercise).
Customer Relationship Management (CRM) has been deployed in retail banking.
The challenges in managing customer relations in retail banking are due to the
multiple products being offered and the diverse channels being used for the
distribution of the products. Customer expectation from banks can be summed up
as:
Any time anywhere service, personalized offers, and lower payouts.
Aggressive marketing and promotions on the part of the banks have resulted in
most customers happily switching loyalties to enjoy better privileges, thereby
making the task of retaining them more difficult for the banks.
Targeting customers: It is necessary for banks to identify potential customers for
approaching them with suitable offers. The transactional data that is generated
through customer interactions and also by taking into account the profile of the
customer (such as the lifecycle stage, economic background, family
commitments, etc.) needs to be collated into one database to facilitate its proper
analysis. For example, a customer interacts with the banks for savings accounts,
credit cards, home loans, car loans, Demat accounts, etc. the data generated
through all these services needs to be integrated to enable effective targeting.
After the integration is done, a profitability analysis of the customer needs to be
undertaken to acquire an understanding of the profit-worthiness of the customer
before targeting him with new offers.
Sales reference material: A consolidated information database on all products,
pricing, competitor information, sales presentations, proposal templates and
marketing collateral should be accessible to all the people concerned. These
prove to be very helpful in Sales Force Automation (SFA) wherein the
salesperson gets instantaneous access to all relevant material as and when it is
required (especially when he/she is in a meeting with a client.)
Consistent interface with customers: The communication to customers from
various departments like sales, finance, customer support, etc. should be
consistent and not contradictory. Therefore, all departments should be privy to a
unified view of the customer to enable a consistent approach. Removal of
inconsistencies is necessary to ensure that customers are not harassed and
frustrated owing to poor internal co-ordination. This is bound to enhance
customer satisfaction. The contact centres used to interface with customers
should ensure consistency in customer interaction, irrespective of the medium
used for the interaction such as telephone, Internet, e-mail, fax, etc.
Banks can use the data on customers to effectively segment the customers before
targeting them. Proper analysis of all available data will enable banks to
understand the needs of various customer segments and the issues that determine
value for that segment. Accordingly, suitable campaigns can be designed to
address the issues relevant for that segment and to ensure higher loyalty from
these customers. When data analysis is done in the right manner, it helps in
generating opportunities for cross-selling and up-selling.
Read More:
Customer Relationship Management in the Banking Sector
ICICI Banks CRM Initiatives
ICICI Bank has to manage more than 13 million customers. The bank has over
550 branches, a network of 2025 ATMs, multiple call centres, Internet banking
and mobile banking. Its customers often use multiple channels, and they are
increasingly turning to electronic banking options. Business from the Internet.
ATMs and other electronic channels now comprises more than 50 per cent of all
transactions.
In the process of making its business grow to this level, ICICI Bank has
distinguished itself from other banks through its relationship with customers.
The Teradata solution focuses on a Customer Relationship Management (CRM)
platform. Information from various legacy and transaction systems is fed into a
single enterprise called wide data warehouse. This allows the bank to generate a
single view of its customers. The warehouse has the capability to integrate data
from multiple sources comprising Oracle and flat files. The Behaviour Explorer
enables profiling of customers and querying on various parameters. These enable
the bank staff create suitable campaigns for targeting individual customers on the
basis of their requirements.
The logistics in the system have also led to other benefits like interactive reports,
unearthing cross-selling opportunities as well as finding out about the channel
usage undertaken by a segment. The data access was facilitated through the use
of Cognos Power Cubes.
Mobile ATMs: Customers of ICICI Bank can access their bank accounts through
mobile ATMs. These ATMs are kept in vans and parked at locations that have a
high traffic of bank customers such as the commercial areas in a city or upmarket
residential areas ICICI Bank now provides standard ATM facilities through ATM
vans. This facility has been tried at Mumbai, Chandigarh and various places in
Kerala during specified timings.
Bulk Deposits: The ICICI Banks Bulk Deposit ATMs enable customers to
deposit large amounts at one time. Unlike conventional ATMs, which are able to
accept only 30 notes at a time, these ATMs allow the deposit of huge amounts.
The Bulk Deposit ATM is available in Mumbais Vashi sector branch office of
ICICI. The bulk deposit facility can be availed of by select customers who need to
deposit huge amounts of cash. ICICI Bank issues a special card called the
`Deposit Only Card to facilitate this service. This card allows for deposit
transactions only. The service is further facilitated by the provision of special
bags at ATMs in which a customer can put his money. After the deposit slip is
filled, the bag can be inserted in the ATM. The transaction slip is then generated
by the ATM as an acknowledgement of the deposit. ICICI Bank also has cash
pick-up service for business customers under the business banking segment.
ATMs for the visually challenged: ICICI Bank has launched ATMs with special
voice-guided systems, which guide a visually challenged person to access ATMs
without any help. The jack on the terminal enables headphones to be connected to
it and voice commands enable the customer to transact business. Customers may
choose a suitable language to get voice commands. After the language selection
is done, the customer is guided to ensure that the ATM card is inserted in the right
slot and thereafter, guidance is provided for entering the PIN by using the
keypad. A raised button is provided on number 5 to enable users to identify the
numbers easily through touch. The slot for cash collection has such raised `pips
that enable easy identification through touch.
Other Services through ATMs: Apart from the usual transactions involving the
bank, some other services can also be availed of by ICICI Bank customers. These
include:
Prepaid mobile recharge
Buying and renewing Internet packs (such as those of TATA Indicom Internet
service provider and Sify).
Making donations for Tirupati Tirumala Devasthanams, Nathdwara temple and
Shri Mata Vaishnodevi shrine.
Mutual fund transactions, and
Bill payments
Mobile phone as a Virtual Wallet: The mobile phone has been transformed into
a virtual wallet a new innovation in mobile commerce. On September 19, 2005,
Airtel, ICICI Bank and VISA announced the launch of Chq a revolutionary new
service which is a credit card using the mobile phone. This is the first mobile-
to-mobile payment option which enables Airtel customers and ICICI Bank Visa
cardholders to pay for their purchases with their Airtel Mobile phones. The
service has eliminated the need for carrying physical cash for making a purchase
and also the problems associated with the point of sale (POS) terminal since the
mobile phone services as a secure POS and a payment mechanism.
Social Events: ICICI Bank organized the largest domestic invitational amateur
golf event for HN1 (high-net-worth individuals) customers. This nation-wide golf
tournament had over one lakh high-net-worth clients of ICICI Banks private
banking division participating in the event.
Mobile Banking Benefits: Mobile banking enables the customer to avail of many
facilities by just sending an SMS. These facilities, which are currently offered
free of cost, are as follows:
Locating ATM
Locating branch
Locating drop box
Alert facilities like salary credit, account debit/credit, cheque bounce, etc., and
Queries on banking, cards and demat account
CONCLUSION
Banking can be mysterious for consumers and how they interact with
their finances can be a complex matter. The challenges faced by banks and their
customers are many but the trick lies in de- mystifying complex financial
relationships. Technical solutions deployed by banks today are flexible, user-
friendly and meant to facilitate specific workflow and requirements in
implementation processes. In order to simplify lives, banks have begun to
implement end-to-end technologies through all departments with the intention of
removing human error from processes. Previously existing manual environments
could not have been adequate for future visions, growth plans and strategies.
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. For a bank to succeed in adopting a CRM
philosophy of doing business, bank management must first understand CRM as a
holistic concept that involves multiple, interlocking disciplines, including market
knowledge, strategic planning, business process improvement, product design and
pricing analysis, technology implementation, human resources management,
customer retention, and sales management and training.
Turning the business strategy into actionable items is a difficult undertaking. For
which Customer Relationship Management works a magic wand.
BIBLIOGRAHPHY
Customer Relationship Management-Philip Kotler
NEWSPAPERS
Times of India
WEBLOGRAPHY
www.crm.com
www.customerrelation.com