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By :
IRFAN
Roos Indra Djaja
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 ¦ adquart r d in Toronto, Canada
 Consid r d on of Canada¶s f
full-s rvic , national
and int rnational financial stablishm nts
 RBC Financial Group s rvic s; 5 main ar as of practic
- P rsonal and comm rcial r tail banking (RBC Royal
Bank)
- Insuranc (RBC Insuranc )
- W alth manag m nt (RBC Inv stm nts)
- Corporat and inv stm nt banking (RBC Capital
Mark ts)
- Transaction proc ssing (RBC Global S rvic s)
 RBC Financial Group
 Consid r d Canada¶s larg st bank
h n m asur d in t rms of
ass ts and mark t capitalization
‡ $270 Billion in ass ts
‡ 23 Million r tail accounts
‡ 700 Products
‡ 58,000 Employ s
‡ 10 Million p rsonal, comm rcial, corporat , and public s ctor
‡ custom rs s rv d in North Am rica and much of th
orld

 RBC Royal Bank (p rsonal and comm rcial r tail banking)

compris d of 1,300 branch s, 4,800 ABM¶s, 87,250 propri tary POS
t rminals, 900+ mobil sal s staff, 1.4 million onlin banking
custom rs and 2 million t l phon banking custom rs
ith 300
offic s in 30 countri s
RBC Financial Group
 Th p rsonal banking d partm nt cov r d
consum rs and small busin ss banking
and loan,
hil larg r compani s arning
$5 million to $25 million
r cov r d by
th comm rcial division
 RBC Royal Bank also provid d cr dit card
s rvic s, Visa cr dit and d bit cards
provid d; via RBC C ntura and RBC
Prism
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 Royal Bank b gan its pansion in 1946,
ith
th philosophy in mind; ³all things to all p opl 
 Sought to pand both nationally and
int rnationally,
hil d v loping n
products
and s rvic s in th proc ss
 Du to changing mark t condition in th 1960¶s
and 1970¶s RBC sought to suppl m nt d th ir
pansion by utilizing m rging ABM
t chnologi s and a d c ntralization strat gy
1968 ± 25 ABM¶s
r utiliz d in dom stic
op rations
D v loping a CRM Philosophy
 Th ultimat goal
as to bring tog th r in
on plac a vi
of all contacts,
transactions, accounts and int raction
ith
ach custom r.
 A financial institution¶s fully int grat d
CRM syst m could allo
its p rsonal
bank rs (PBs) to ass ss a custom r¶s
transaction history.
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 Addr ss, ag , and account balanc s

 All contacts th custom r had at any company
location, phon c nt r, or Int rn t sit
 What l v l of s rvic th custom r qualifi d for,
bas d on curr nt and futur profitability
 What products th custom r h ld at th tim of
th call
 What products th custom r
as
targ t d/approv d for by sal s and mark ting
 ¦o
th custom r r spond d to targ t d dir ct
mark ting campaigns
 Probl ms
ith CRM Syst m
 Although tr m ly b n ficial, CRM
as p nsiv and difficult to
d ploy, sp cially on a larg scal

 In 2001, a US industry journal found that
hil 78% of r spond nts

found CRM critical, only 35% actually had impl m nt d it.

 Various roadblocks such as; budg t constraints, lack of

coordination/coop ration
ithin compani s, lack of manag m nt
commitm nt mad it v ry hard to p n trat th industry
ith CRM.

‡ Compani s
ho
r succ ssful
ith CRM cr at d ongoing r p at

purchas r lationships
ith th ir custom rs and had th r sourc s
and infrastructur to captur d tail d data about th custom rs
b havior
h n th custom r purchas d, us d and r purchas d th ir
products and s rvic s
CRM at Royal Bank
 In 1997 Royal Bank und r
nt s v ral mark ting
strat gi s.
 Th Strat gic Mark ting R s arch and Analytics
(SMR&A) group conduct d brand r s arch,
s gm ntation and pr dictiv mod ling using
information from Royal Bank¶s data mart
 Th obj ctiv of this r s arch
as to d t rmin th
imag p rc ptions of major financial institutions and
id ntify th optimum positioning for RBC Royal
Bank.
 Du to th push from comp tition Royal Bank
as
ag r to us th information th y had gath r d
about th ir custom rs in futur int ractions
ith
th m
 Th ³Burning platform
 A study conduct d in 1997 of 2000 custom rs of th larg Canada
financial institutions ask d ³What asp cts of banking do you highly
valu .
 Th r sults cr at d th ³burning platform for CRM
ithin th Bank.
 Custom rs said th most important valu to th m
as intimacy,
ncompassing f lings of trust, r assuranc , a f ling that th bank
kno
s and und rstands th m and th ir n ds.
 Banks had b n follo
ing th id a that conv ni nc
as k y to th ir
consum rs,
hich is
hy banks off r d 24-hour ATMs and call
c nt rs.
 This study sho
d a
hol ar a of diff r ntiation that Royal bank
could plor
 Royal bank chos to d ploy CRM in points of contact critical to th
custom r p ri nc such as call c nt rs, branch s and
dir ct mail
R organization around CRM
 Royal Banks Primary custom r s gm nts:
K y, Gro
th, Prim
 Th structur r fl ct d lif stag s and th
diff r nt rang of compl ity
ithin
financial n ds
 Th groupings also r fl ct d
commonaliti s in s rvic and product
r quir m nts.
m
!"
 Compris s four sub-s gm nts; Youth, N us, Small
Busin ss, and Farming & Lif styl Agricultur .
 Lo
curr nt valu , pot ntial to mak high profits for bank

!#Ô¦$Ô
 Cli nts in mid-lif , and/or busin ss¶ that ar still gro
ing
th ir ass ts and hav high cr dit and financial advisory.
 Strat gy: R tain, gro
, consolidat th s r lationships


 Consists of mor matur custom rs in th accumulation
and pr s rvation phas s
ith significant pot ntial for full
RBCFG off rings.
 Valu proposition: trust d s rvic and r f rral to
sp cializ d r sourc s
 S gm nt manag rs comp t d for r sourc s alon
ith product
manag rs and functional ar a manag rs.
 Th ³fri ndly comp tition fost r d clos collaboration b t
n
th s ar as.
 Th r
as r sistanc to th chang s
ithin th n
custom r and
c nt r d organization.
 Part of th probl m
as th inability to communicat ho
th n

program
ould
ork, po
r shifts from product manag rs to
custom r manag rs
 Consolidation of r gional sal s and mark ting groups m ant that
branch s r c iv d compil d lists from sal s and mark ting offic s in
Toronto rath r than r gional offic s.
 Royal bank cr at d a small, sp cializ d group that produc d ad-hoc
and follo
-up l ads as r qu st d by th branch s.
 Th goal
as to r plac oft n-haphazard sal s l ads proc ss at th
local l v l
ith c ntraliz d and standardiz d sal s l ads
 No
th l ads ar g n rat d c ntrally and v ryon has dir ct
acc ss to th m, th y s
itch d from pap r bas d to b ing
availabl l ctronically
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 Aggr gat Information vs. Actual Data
 20% custom rs account d for 100% profit
³A custom rs mad th most profit
³B custom rs mad som profit
³C custom rs brok v n or lost mon y
 
 NCR ± Valu Analyz r
Calculat d Profitability fast r
¦igh Proc ssing Po
r
Mor accurat spr ad of information
Cr at d a B tt r Und rstanding of
Custom rs
¦ lp D t rmin Custom r tol ranc
   


%


& 
 1) Calculat Pr s nt Valu of Profit
 Assuming profitability p rc ntil of cli nt r mains
constant
 2)Factoring in Variabl s
 (Eampl : Ag , T nur
ith Bank, , Numb r of
Products ¦ ld, Acquisitions)

 Lif tim Valu calculat d individually

Can b aggr gat d up to S gm nt L v l
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%

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 Custom r profitability
as a d t rminant us d

for s gm nting and targ ting
 Studi s
r don on custom rs lik s, dislik s
and typ s of products th y
ould b n fit from.
 Mod ls
r d v lop d to d t rmin d th y¶r
prop nsity to buy
%
 $


 RBC also d t rmin d a s t of custom r

tr atm nt strat gi s using th custom r
s gm nt cat gori s
 A custom rs cat gory
ould d t rmin th
l ngth of
ait and typ of custom r s rvic
r pr s ntativ th custom r talks to.
 '




 Th CRM syst m us d custom r profitability
and futur pot ntial calculations to giv
pricing param t rs to account manag rs to
d t rmin ho
to pric products d p nding
on th custom r.


)

 Anoth r us for custom r profitability data

as to inform in th d bat ov r
h th r
to chang for s rvic s using a flat rat
packag or charg f s bas d on th
amount and typ of transaction th
custom r
as g n rating
ith th bank.

 & 
Ô



Th bank d t rmin d profits on ass t
products by subtracting transf r rat s from
actual int r st incom and for liability
accounts by subtracting int r st paid from
th transf r rat on th mon y in th
d posit account


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 Factors such as Incom , S rvic D bt Ratio,
Cash Flo
s, and cr dit r ports h lp d mak an
initial d cision.
 Onc loan grant d, a risk scor
as giv n bas d
on natur and fr qu ncy of transactions in th
custom rs account.
 Scor conv rt d into cost driv r
 All inputs
r nt r d into soft
ar
that calculat s custom r profitability