Seminar Paper On Customer Relationship Management In Banking Industry

Introduction:Customer focus and relationship management have become fundamental marketing

and business philosophies for many companies seeking competitive advantage.
Establishing, maintaining and enhancing customer relationships have always been an
important aspect of business. Although CRM is considered to be a business
philosophy closely related to relationship marketing, it is the linkage with technology
that is particularly of great interest. Marketing academics have begun to explore and
understand the linkage between CRM technology, relationship marketing and business
relationships as providing opportunities for sustainable competitive advantage.
Due to rapid development of the Internet, e-commerce and self-service customer
support, there are increased expectations from customers for improved, personalized
service and immediacy. Marketing practitioners are now using technology to their
advantage and working closely to deliver value to the organization and to the
customer. This has prompted marketing practitioners to use technology to capture and
use customer information in order to better meet customer demands. Customer
relationships are considered superior to transactional exchange in their ability to
create sustainable competitive advantage and superior business performance.
The service sector is receiving much deserved attention resulting from its inevitable
role in a countrys economic de-elopement. Despite all the efforts gaps such as the
relationship between technological advances and service development are yet to be
revealed from the perspective of new applications that organizations want to develop
and implement.

Objectives Of The Study: 1) To understand the benefits related with CRM

2) To study CRM strategy implementation by ICICI Bank
3) To understand the need of CRM strategies for banking.

Research Methodology: 1

Ganpatrao Arwade College Of Commerce, Sangali

Seminar Paper On Customer Relationship Management In Banking Industry

Research design constitutes the blue print for the collection, measurement and
analysis of data. In this research to understand CRM and Banking industry we have
taken ICICI bank who already adopted CRM in their business.

Sources Of Data: A case Study on ICICI Bank has been selected for the purpose of conducting study.
Secondary Data:
Secondary data are those data, which are already published. It may be useful for
many other people than the researcher who has published it. There are various
sources of secondary data collection.

Articles on CRM taken from journals, magazines published from time to time.

Through internet.

Magazines

Library Records

Theoretical Background:Customer relationship management (CRM) is developing into a major element of

corporate strategy for many organizations. CRM, also known by other terms such as
relationship marketing and customer management, is concerned with creation,
development and enhancement of individualized customer relationships with carefully
targeted customers and customer groups resulting in maximizing their customer life
time value.
Industry leaders are now addressing how to transform their approach to customer
management. A new form of cross-functional marketing, i.e. CRM is replacing narrow
functionally based traditional marketing. The traditional approach marketing has been
continuously questioned in recent years. This approach emphasized on the
management of the key marketing mix elements such as product, price, promotion,
and place within the functional context of the marketing department.

Phases Of CRM:-

Ganpatrao Arwade College Of Commerce, Sangali

Seminar Paper On Customer Relationship Management In Banking Industry

The three phases in which CRM can help to support the relationship between a
business and its customers is explained below:

ACQUIRE

ENHANCE

RETAIN

Acquire: A CRM initiative can help a business in acquiring new customers

through excellent contact management, direct marketing, selling and
fulfillment.

Enhance: A web-enabled CRM combined with customer service tools offers

customers excellent service from a team of trained and skilled sales and
service specialists, which offers customers the convenience of one-stop
shopping.

Why CRM Now?

What makes CRM appropriate for todays environment?

While there are many

number of environmental factors and business advancement that impact and enable
the real importance for CRM in todays environment is competitive and
differentiation. CRM promises to be competitive and differentiation in todays
environment.
Organization today is finding it difficult to compete on the basis of product.
Technology advancement has enabled the near immediate replication of product
features and functions. It is just a matter of weeks between a product launch and
saturation of the market. Just think about it, are there many products out there that are
truly unique.
Price, which has traditionally been another basis of competitive differentiation, is no
longer a means for many to compete. Complex channel networks have caused parity
pricing.
Promotion strategies have similarly lessened as a means of differentiation. Clubs
abound, special offer are the norm, and sales are continual.

Ganpatrao Arwade College Of Commerce, Sangali

Seminar Paper On Customer Relationship Management In Banking Industry

Place of distribution has likewise become less influential in the success or failure of a
business. The Internet has created an avenue for even the smallest business to
compete.
While all these factors are still important, none of them can alone support the success
of most business. CRM the ability to provide a more meaningful sales and service
experience promises to be means of differentiating, of providing customers with a
reason to frequent your business rather than that of your competitors.
Ownership of customer relationship provides exponentially greater rewards than
differences in product, price, promotion or place of distribution could ever offer. All
of these factors can even be mitigated if you can serve as the one stop provider that
can identify. Quantify, and service customers need.

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 centers, 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 comprise 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.

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 profitworthiness 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

Ganpatrao Arwade College Of Commerce, Sangali

Seminar Paper On Customer Relationship Management In Banking Industry

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.

The Benefits Of CRM

Customers usage pattern: ICICIs CRM data warehouse integrates data

from multiple sources and enables users to find out about the customers
various transactions pertaining to savings accounts, credit cards, fixed
deposits, etc. The warehouse also gives indications regarding the customers
channel usage.

New product development: Analysis at ICICI guide product development

and marketing campaigns through Behavior Explorer, whereby customer
profiling can be undertaken by using ad hoc queries. The products thus
created take into account the customers needs and desires, enabling the bank
to satisfy customers through better personalization and customization of
services.

Central data management: The initial implementation of CRM allowed

ICICI to analyze its customer database, which includes information from eight
separate operations systems including retail banking, bonds, fixed deposits,
and retail consumer loans, credit cards, custodial services, online share trading
and ATM.

Some Noteworthy CRM Initiatives Of ICICI Bank

5

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Seminar Paper On Customer Relationship Management In Banking Industry

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.
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.

Prof. Abhishek A. Khadtare

Research Student

Dr. R.K. Swami

Research Guide

References 1. Kotler, Philip and Kevin Lance Keller (2007), Marketing Management,
Dorling Kindersley (India) Pvt. Ltd.
2. Umesh C.Pattnaik et al. (2006), Bank Marketing, Sonali Publications, New
Delhi
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Ganpatrao Arwade College Of Commerce, Sangali

Seminar Paper On Customer Relationship Management In Banking Industry

3. Berry, L. L. (1983), Relationship Marketing of Services:Growing Interest,

Emerging Perspectives, Journal of theAcademy of Marketing Science, 23,
No.4, PP.236-245.
4. Bill Schmarzo (1999), Making Every Customer Relationship Count,
Exploring the

Business Drivers and Technology Enablers of Customer

Relationship Management, IBMNUMA-Q Copyright: International Business

MachinesCorporation.
5. Buttle, F. (2004), Customer Relationship Management: Concept and Tools,
Burlington, MA: Elsevier.
6. Shailendra Desai,(Feb. 2010), You can affords to lose key performer, not key
customers!, Making Mastermind, Reference # 10M-2010-02-06-10
7. Shailendra Desai,(Aug. 2010), Customer Reletionship Management The
Winning Strategy in a Challenging Economy, Making Mastermind,
Reference # 10M-2010-08-02-10
8. Dr. A.Subbiah and Mr.S.Jeyakumar (2010), Research Methodology for
Researchers in Commerce and Management Himalaya Publishing House.

Ganpatrao Arwade College Of Commerce, Sangali