CRM in ICICI Bank

Guided By: Mrs. Kavita Shukla, IILM Gurgaon

Submitted By – Anurag Pol, Naveen Chandani, Pankaj Mehta, Ridhima

Bhanot, Shubhangi Singh, Vicky Daswani
Introduction

CRM is an acronym for ‘Customer Relationship Management’. It’s a set of strategies, processes,
Metrics, organizational culture and technology solutions that enhance an organization's ability to
see the differences in its present & prospective customers, track new opportunities to better serve
customers and act, instantly and profitably, on those differences and opportunities. Recently
CRM has taken a center stage in the business world with businesses concentrating on saving
money and increasing profits by redefining internal processes and procedures. It costs a
company dramatically less to retain and grow an existing client, than it does to court new ones.
The aim of CRM is to optimize the use of technology and human resources.

CRM services consist of the following major segments:

 Consulting services
 Implementation services
 CRM Outsourcing services
 Training services

The idea of CRM is that it helps businesses use technology and human resources gain insight
into the behavior of customers and the value of those customers.

If it works as hoped, a business can: provide better customer service, make call centers more
efficient, cross sell products more effectively, help sales staff close deals faster, simplify
marketing and sales processes, discover new customers, and increase customer revenues. the
organization must look into all of the different ways information about customers comes into a
business, where and how this data is stored and how it is currently used.
 ICICI Bank (BSE: 532174, NYSE: IBN) (formerly Industrial Credit and Investment
Corporation of India) is a major banking and financial services organization in India. It is the 4th
largest bank in India and the largest private sector bank in India by market capitalization. The
bank also has a network of 1,700+ branches (as on 31 March 2010) and about 4,721 ATMs in
India and presence in 19 countries, as well as some 24 million customers (at the end of July
2007). ICICI Bank offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and specialization subsidiaries and
affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset
management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in
India. ICICI Bank's shares are listed on the stock exchanges at Kolkata and Vadodara, Mumbai
and the National Stock Exchange of India Limited; its ADRs trade on the New York Stock
Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet
among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and
representatives offices in 19 countries, including an offshore unit in Mumbai. This includes
wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the Hi
SAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory
branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in
Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and
USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total
income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's
CASA ratio increased to 30% in 2008 from 25% in 2007. ICICI Bank is one of the Big Four
Banks of India, along with State Bank of India, Axis Bank and HDFC Bank its main
competitors.

In 1955, The Industrial Credit and Investment Corporation of India Limited (ICICI) was
incorporated at the initiative of World Bank, the Government of India and representatives of
Indian industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In 1994, ICICI established
Banking Corporation as a banking subsidiary.
 CRM INITIATIVES IN ICICI BANK

The CRM initiatives in India's ICICI Bank hold together its compelling story of growth. Its
growth in customer base, channels, and product and service offerings. Since its inception in
1995, the bank has grown to have 15.8 million customers, holding about 17 million accounts.
The bank's network has expanded to 610 branches and standalone counters and over 2,000
ATMs.

CRM has been envisioned by the bank to support its goals in sales, customer service, and
analytics. Already, about 30.40% of the bank's home loans are cross-sold to existing customers.
Similar ratios have also been reported in the sale of insurance policies. Ratios of about 50.60%
have been seen out of the credit cards and personal loans business. The bank's stated intention is
to take these ratios to as high as 60.75%. ICICI Bank states that these high levels of relationship
maximization are made possible by how its CRM system is able to "know and understand the
customer better.´ which customer is most suitable for what kind of product and at what point in
time."

In the area of service, the bank receives as many as 150,000 customer requests per day, a
challenge not only to channel capacity but also to how the bank is able to ensure that each
request is recorded, tracked, and resolved. Last, customer analytics have been used to support
various strategic decisions of the bank. Recent strategic decisions of note are several anti-
attrition programs, the intended attrition of unprofitable customers, the imposition of fees, and
various customer segment tactical initiatives.

ICICI Bank's CRM capability is built on a Teradata´ data warehouse that integrates data from
multiple sources, including the Oracle database and various flat files. The system provides users
with information about each customer's checking accounts, fixed deposits, credit cards, and other
financial information. The bank has taken on the end-to-end proposition of SAS for enterprise
intelligence, which offers a credible integrated approach to analytics, including data detection,
data cleansing, data preparation, event detection, reporting and business intelligence, and
campaign analysis. The bank estimates that it is able to track more than 1,200 parameters
concerning demographics, transactions made, channel usage, and product relationships. Through
Behavior Explorer and views, business users develop customer profiles and run ad hoc queries.
Analysts then use the information to guide product development and marketing campaigns that
are intended to address each individual's total requirements, instead of just pushing a product.
The success of cross-selling to existing customers has also been enabled by the bank's growing
capabilities in lead management. The home loans business unit, for example, has built a lead
management system rolled out to about 700 users. The system is able to allocate leads, schedule
meetings, provide a record of all interactions with the customer, and give reminders for customer
follow-ups. A lead generation tool has also been developed in-house to capture and route Product
applications made over mobile phones.

The Following report isthe analysis of Customer Relationship Management (CRM) in ICICI
Bank, India.

Customer Relationship Management (CRM) is a business strategy for improving profitability

by focusing on customer needs and creating an attentive relationship with the customer.

It involves a personalized and interactive approach for the entire customer lifecycle. Successful
implementation of a CRM approach requires changes in organization structure, culture, and
skills, as well as front- and back-office information systems.

Aim of Customer Relationship Management is to produce Customer Equity in Banking

Sector. The following are the three major drivers of customer equity that are considered for our
analysis:
 1. Value Equity.
2. Brand Equity.
3. Relationship Equity.
The competitive competency of any bank would be achieving all the above three benefits so as to
be a successful and most desirable bank in the future of its prospects.

1. Value Equity: This measures the customer perception about benefits relative to its cost. The
sub drivers of value equity are quality, price and convenience.

2. Brand Equity: Customer's subjective and intangible assessment of the brand beyond the
objectively perceived value. The sub drivers are customer brand awareness, customer attitude
towards the brand, customer perception of brand ethics

3. Relationship Equity: Customers tendency to stick to the brand above and beyond the
objective and subjective assessment of its worth .Sub drivers of relationship equity includes
loyalty programs, community building programs and knowledge building program.

The ICICI Bank is the first bank to appoint the post of

Relationship Officer in its every branch around India so
ICICI Bank
as to enable an effective gapless customer interaction
(www.icicibank.com)
between the bank and the customer. This designation
has won the DM
carries the customer complaints and critiques faced by
Review World Class
the customers towards their transactions with the Bank
Solution Award 2003
like deposits, loans, account maintenance, withdrawals,
in the Business
cheque books etc. This enabled a fearless and non-
Intelligence category
hesitative relationship between both ends.
for its Teradata
ICICI bank has more brand equity with its customers in
India holding awards shown above and also its more number of Branches equaling SBI, the
largest network branches in India. This more proximity has made ICICI more established in the
minds of the customers that this bank has more reliable values and services.

"Winning this award is an incredible achievement for ICICI Bank and Teradata," says Teradata
business manager (India) Amrish Rau. "The solution was the first large-scale CRM
implementation in the Indian banking sector. Teradata commends ICICI Bank for its vision and
willingness to take on such a monumental project. This shows how an Indian company
embracing enterprise data warehousing solutions can very quickly rise to stand alongside the
very best businesses in the world. ICICI Bank has set a precedent that others can follow."
Data Base Management an essential feature of CRM is well established by ICICI Bank with its
customers. This bank was awarded as the world solution provider in Data warehousing.

CRM- THE ICICI EXPERIENCE

CRM at ICICI involves increased communication between the virtual universal bank and its
customers and the prospects as well as within the group itself. The underlying idea is to enhance
every instance of contact with the customer. ICICI
believes that a true customer relationship can only be Emphasizing on the importance of
accomplished by considering the unique prospective CRM one of the ICICI employees
of every single customers. said, “With the overall

The CRM strategy of ICICI proves to be One to One improvement in the ETL1 process

marketing so that every prospect is taken care of in made possible by PowerCenter,

their own way this flexibility is the main reason for we benefited from greater data

the company’s overall success in Relationship immediacy for business users and

marketing. The reliability the main key factor in more reliable information, which

Banking sector as ot deals with the money of the resulted in quicker analysis and

customer the bank should show 100% reliability with timely reporting.”

the customers and in that way ICICI knew that better

Relationship marketing would bring in more closer
and reliable relationship with the public as which it —Gurnam Saini, Assistant

would attract more account holders with the bank. General Manager, ICICI Bank

The award-winning Teradata enterprise data

warehouse (EDW) solution has enabled ICICI Bank to establish business intelligence market
leadership in the fast-growing Indian financial market. The bank uses its Teradata platform to
develop tailored marketing campaigns that have boosted customer acquisition rates significantly.
It has serviced over 11 million unique customers around the country. In addition, ICICI Bank's
credit cards and retail loans business units attribute 25 and 20 per cent respectively of their
new/incremental business in the past year to cross-selling activities facilitated by the data
warehouse.
The key to implementing CRM was in understanding organization and customers in a better way.
There are five interrelated areas that were taken care of before implementing CRM:

 Business Focus
 Organizational Structure
 Business Metrics
 Marketing Focus and Technology

Business Focus: There are various components of CRM like customer information, sales,
marketing trends and marketing efficacy that acted in tandem to improve relationship between
ICICI and its consumers. ICICI captured customer data and analyzed them while dealing with
customers at these very touch points. A CRM solution from Siebel was implemented for the
automation of customer handling in all key retail products of the Group. The solution allows
customer service agents to track all customer complaints and requests. It also allows target
setting and centralized tracking of turnaround times for request fulfillment. The solution went
live in phases during fiscal 2002. The Bank has also undertaken a retail data warehouse initiative
to achieve customer integration at the back-office. This central view of the total customer
relationship is being used extensively for identifying opportunities to cross-sell new products and
services to the existing customer base.

Technology Focus: ICICI Bank continues to leverage ICT2 as a strategic tool for its business
operations to gain competitive advantage. Its technology strategy emphasizes enhanced level of7
customer services through 24x7 availability, multi-channel banking and straight through
processing, and cost efficiency through optimal use of electronic channels, wider and focused
market reach and opportunities for cross-selling. The Technology Management Group (TMG) is
the focal point for the ICICI Group’s technology strategy and Group-wide technology
initiatives.This group reports directly to the Managing Director & CEO.A key to ICICI’s success
has been its ability to harness business information to CRM initiatives that have fueled growth
and helped attract more than 30 million customers. The foundation for ICICI Bank’s wide-
ranging CRM programs is a Sybase IQ-based data warehouse. Developers had used a
combination of PL/SQL and BTEQ scripting, a proprietary technology specific to the data
warehouse, for data extraction, transformation, and loading (ETL). With its growing customer
base, IT administrators recognized that the bank needed a more powerful, sophisticated data
integration system to help ensure the warehouse lived up to its potential as an analytic CRM
engine that delivered tangible bottom-line results.

To step up to the next level of data integration, ICICI Bank officials agreed with a
recommendation from Teradata’s professional services division, which provided systems
integration support for the data warehouse, to implement the Informatica PowerCenter enterprise
data integration platform. (The Bank initially used Teradata as its data warehouse platform and
migrated to Sybase IQ a year ago.) ICICI Bank deployed PowerCenter in 2003 as it embarked on
the next phase of its warehouse, which would add data from five new sources, in addition to the
initial three sources of retail banking, credit cards, and securities information.

The next step in the CRM implementation process was gap analysis which essentially is
assessing different loopholes in:
ICICI Bank was awarded the Most
- Marketing, sales and service practices
Customer Responsive Company at
- Collection, capture, processing and deployment of ‘The Economic Times - Avaya
customer information
Global Connect Customer
- Distribution and operations effectiveness at
customer touch points Responsiveness Awards 2007′. In
the Insurance category, the winner
was ICICI Prudential Life
The CRM software applications facilitate multiple Insurance
business functions with the customers of this bank.
As known ICICI systems are well designed so as to
equal quality with its one to one marketing strategy and that is it was awarded in DM review
world class solutions.

These Success milestones talk more about the concentric and concrete functions of ICICI in
CRM strategies. The chronic strategies of ICICI right from its inception and till now have shown
the company’s importance towards its customer centric strategies and organizations. The
customer life cycle tracking system in ICICI is the only kind of software used in the Banking
sector in India. This unique software used by the ICICI helps them to provide faster solution to
the customers whenever they needed like Dormant accounts, expired accounts, unlimited
banking statements etc.
CRM includes many aspects which relate directly to one another

 Front office operations : Direct interaction with customers,

(e.g. face to face meetings, phone calls, e-mail, online services etc.)
 Back office operations: Operations that ultimately affect the activities of the front office.
(e.g. billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
 Business relationships: Interaction with other companies and partners, such as
suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups,
trade associations). This external network supports front and back office activities.
 Analysis: Key CRM data can be analyzed in order to plan target-marketing campaigns,
conceive business strategies, and judge the success of CRM activities (e.g., market share,
number and types of customers, revenue, profitability).

The marketing campaign: Process and the Software support

DATA MINING AND DATA WAREHOUSING: THE PROCESS OF RELATIONAL
MARKETING:

The Relational Marketing process is supported by a computing infrastructure where many software
packages are integrated with the bank's information system. The same is true for the ICICI Bank.
CRM BUSINESS CYCLE IN ICICI

1. Understand and Differentiate.

2. Develop and customize
3. Interact and Deliver
4. Acquire and retain.

 Understand and differentiate: Understanding customers is important in order to

develop a sound relationship with them. Customer profiling is done in order to
understand demographics, purchase pattern and channel preference. CRM also helped
ICICI in valuation of its customers to understand customer profitability and Customer
Life Time Value (CLV).

 Develop and customize: - In a customer centric business environment, the products and
processes have to be according to customers’ needs and preferences. ICICI has always
focused on developing channels of service delivery according to customers’ need and
service expectation.

 Interact and Deliver: To foster a strong customer relationship ICICI ensured that all
areas of the bank have easy access to relevant, actionable customer information and
 employees should be trained on how to use customer information to tailor interactions
based on both customer needs and potential customer value.

 Acquire and Retain: CRM helped ICICI to figure out valuable customers and made it
easy to formulate retention strategies for them. It also helped it cope up with the change
in customer’s life cycle and offer services accordingly.

The basic model of implementing CRM is what followed by ICICI also. The post of
Relationship officer proved that the ICICI has felt that the bank needs a person interacting with
the customer and to the organization. ICICI started understanding the customer needs from the
relationship officers in every bank and started listening to the basic benefits that the customers
are expecting from the bank. Understanding the basic benefits ICICI way was extended to
provide extra ordinary services like Express counters, 24 hrs account enquiry, Express bank
statements, faster loans etc.

Customization of these specifications is really tougher in case of banking sector since India is
the country where more than 1Billion people live and more diversified regions and languages.
Appointing local executives in respective regions was one of the smart thinking for ICICI so that
those local executives as Relationship Managers carry out respective region customers’ problems
more easily.

Customer retention is for what all these CRM companies are fighting for. This bank has a
wide customer networking system where the every account holder would pull on in any other
scheme of the same ICICI bank. For eg ICICI account holder would have both Current and
Savings account or Loan borrower or in any growth plans of the bank, this would stick the
customer with the bank at high rate. Thus ICICI has a strong customer feeling with their
organization and with their every scheme.
INTERVIEW WITH AN EMPLOYEE

Vicky: Good evening Ms. Priyanka Devedas.

Ms. Priyanka: Good evening Vicky.
Vicky: Is it the right time to talk? We need your help regarding CRM Processes at ICICI.
Ms. Priyanka: Sure Vicky, Tell me how can I help you?
Vicky: Can you just brief us regarding CRM process of ICICI bank?
Ms. Priyanka: CRM at ICICI is an extensive process which involves communication with
existing customers and prospective customers. There are multiple channels through which we
communicate with customers to carry out customer management process. We use different
softwares to carry out these process.
Vicky: We have also heard that ICICI Bank is the number one bank in India in customer
relationship management. What is ICICI doing different than other banks?
Ms. Priyanka: We use latest software to understand our customers, their demographics and
needs. We try to provide them customized products as per their requirements. You must be
aware of different credit card schemes provided by us to customers.
Vicky: CRM is the activity done at various levels of the organization, how does ICICI
implement it?
Ms. Priyanka: Implementation part is done by Top management and I am not aware of the
whole process. I can just tell you that “GAP analysis” is done before we embark on CRM
implementation.
Vicky: Thank you very much Ms Devedas.
Ms. Priyanka: You’re welcome Vicky. Feel free to contact if you need further assistance.
Have a nice day.
Reference:
Ms. Priyanka Devedas (Wealth Manager-Delhi)
Priyanka.devadas@icicibank.com
ICICI Bank Limited
Booth No. 104-105
Faridabad – 121007
Mobile-09953001002
The ease with which we could approach to this employee itself speaks volumes about the
ICICI culture and its customer centric approach.
BENCHMARKS AND RESULTS:
 In the first table, we can see that the benchmarks set by ICICI are definitely of world class
and clearly values customer’s precious time. Similarly, in the second table it’s evident that ICICI
Bank and HDFC Bank have done very well compared to other banks in terms of CRM best
practices. Moreover, the standard deviation is also very less compared to most of the other banks.
Clearly this has helped ICICI bank acquire a large customer base (about 30 million) in a
shortspan of time.

LIVE EXAMPLE

In 2008 economy slowdown many companies revenue fell down double the rate. Among that
economy has also eaten up the image of ICICI Bank. That time ICICI faced three major
problems:

1. 12% Account withdrawals from total holdings.

2. 24% decline in half yearly profit Jan-June.

3. HDFC’s CEO Deepak Parekh.

K.L. Kamath the CEO of ICICI Bank that time addressed to the press about the current
situation saying that ICICI has a strong customer network that assures zero account withdrawals
in coming future. The statement also proved to happen, Kamath made it happen with the strong
customer base that ICICI had before. The bank sent a prospective letter to every active customer
about the reduced risk for their money in the bank and also every branch of the Bank in India
promoted risk minimization campaign ads inside the branches and on some roads of the
respective cities and towns. No matter whether ICICI knew or do not knew that strong customer
base would save their food but that customer marketing really worked to retain the whole market
share of the ICICI Bank.

Thus ICICI has a strong customer feeling with their organization and with their every scheme
proving it that the ICICI have a successful CRM Implementation and high Maintenance at high
success rate.
CONCLUSION:

Thus, we see that a focused and customer centric approach helped ICICI Bank become # 2 bank
in India (till recently, as PNB has taken over it as the No 2 bank in India now). ICICI has used
CRM not only as a tool but also as a strategy to gain competitive advantage over other new
generation private banks. It has invested a lot in ICT and spared no pains in giving best to the
customers. Its multi-pronged approach towards managing customer relationship is paying
dividends constantly and as a result we see millions of happy satisfied customers determined to
make it one of the most successful banks in India.