GNGcrm in Banks

8/11/2019 GNGcrm in Banks

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1.1 ) WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT

CRM can be defined as it is a comprehensive strategy and process of acquiring,retaining and patterning with selective customers to create superior value for thecompany and the customer.

The broad framework of CRM process comprises of four sub-processes:

Though the concept of buyerseller relationship is not new, and has been practiced

in on form or the other since tome immemorial, it is only in recent times that Customer

Relationship Management !CRM" has turned into a bu##word. Customer loyalty has

always been valuable, but today it has become more vital for success.

$

1. Customer

relationsi!"ormation

!ro#ess

$. Relational

!er"orman#e

e%aluation

!ro#ess

4. CRM

evolution orenhancementprocess

&. Relationsi!

mana'ement

an( 'o%ernan#e

!ro#ess


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CRM can help large traditional businesses deliver that personal touch, one to one

relationship and customi#ed service that it used to pride itself on when the business was

small. %t helps large organi#ations seemingly weighted down by huge customer bases,

infrastructure, processes and inventory appear as fleet footed and customer oriented as

the friendly store or a dotcom startup.

CRM is a well defined business strategy comprising a series of functions, s&ills,

processes and technologies that together allow firms to profitably manage !acquire and

retain" customers as tangible assets to offer personali#ed and well differentiated

e'periences and to build long term relationships with customers.

1.& ) INTROUCTION TO CUSTOMER SER*ICE

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)ll businesses must have some dissatisfied customers, if only occasionally. *et a

typical business only hears around + of those customers that are dissatisfied. -hat

about the other + or so/ They 0ust quietly go elsewhere, and may well never come

bac&. )nd a ma0or source of dissatisfaction is either communications alone, or how ma0or

source of dissatisfaction is either communications have failed to correct other problems

or even ma&e them worse.

%t will be no surprise to anyone who deals with customers that they tend to be

demanding in their relationship with suppliers !unreasonably so, too, you may say1

sometimes true but more of this later". 2ome of these demands are inherent, while others

more contrived.

1) CUSTOMER EMANS

%t will be no surprise to anyone who deals with customers that they tend to be

demanding in their relationship with suppliers !unreasonably so, too you may say1

sometimes true but more of this later". 2ome of these demands are inherent, while others

more contrived3

2ome demands are inherent to the very nature of the customersupplier

relationship. 2uch demands include customer4s requirements for courtesy, efficiency,

promptness and a caring, individual service. 2uch a list cannot be regarded as in any way

unreasonable.

&) CUSTOMER E+PECTATIONS

Customers could conceivably want all sort of things1 you to greet their enquiry

with enthusiasm and the insistence that the company RollsRoyce collects them within an

hour to whis& them off to a top restaurant to discuss their needs over lunch. 5ut here the

best description of what a supplier is prepared to entertain is a list of 6reasonable wants4.

)nd although there are a number of factors involved, they all stem from one umbrella

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description that is usually voiced by customers as 6wanting to find people who are good

to do business with4. %n a word, customers might say that they want their suppliers, and

the people who represent them, to be professional.

$) HOW TO MEET CUSTOMER E+PECTATIONS

Customer service !also &nown as Client 2ervice" is the provision of service to

customers before, during and after a purchase.

%ts importance varies by product, industry and customer. )s an e'ample, an e'pert

customer might require less prepurchase service !i.e., advice" than a novice. %n manycases, customer service is more important if the purchase relates to a service as

opposed to a product8.

Customer service may be provided by a person !e.g., sales and service

representative", or by automated means called selfservice. 9'amples of self service are

%nternet sites.

Customer service is normally an integral part of a company4s customer valueproposition.

The implementation of a particular customer service proposition must consider several

elements of the organi#ation, including

cultures

hiring

training incentives

processes

support technology

Competitive advantage

:
http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Customer_value_proposition


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) companymay attempt to differentiate itself from its competition through the

provision of better customer service. The consistent delivery of superior service requires

the careful design and e'ecution of a whole system of activities that includes people,

technology,and processes. )lthough, the rewards will include improved revenue from

customers that are impressed with the service provided.

Role of technology

Technology has made available a wide range of customer service tools. They

range from support websites and the ability to have live chats with technical staff to

databases trac&ing individual customers; preferences, pattern of buying, payment methods

etc., and tailoring products and service responses based on this advanced data. 2pecialist

software that is designed for the trac&ing of service levels and for helping recogni#e areas

for improvement are often integrated into other enterprise operational software tools such

as 9R


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=uhi 2rivastava, a relationship manager with >T% 5an&, spent a day at a Mumbai hospital

last month loo&ing after a customer who underwent a cataract surgery. This was

2rivastava4s call of duty as the idea was to meet the beyond ban&ing needs of senior

citi#ens who are customers of its priority ban&ing offerings. ) vast change in scenario

from the times when public sector ban&s !T% offers special services to senior citi#ens who are customers of its priority

ban&ing offerings.

%C%C% has wor&ed on a new model and today processes : la&h cheques in 0ust few

hours every day

6Mystery shopping4 is used by 25C to trac& its service delivery across all ma0or

customer touchpoints


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citi#en to the branch on a wheelchair and convinced him of the veracity of statements

provided.

The products offered by competing ban&s are similar. The core differentiators are the

brand and the nature of services provided. Most ban&ers said a lot of effort goes into

ensuring service quality. The challenge is whether they are able to offer customer a fair

and transparent system.

Meanwhile,


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8 Retain

valuable

customers.

8 Retain

valuable

customers.

! Ac"uire

customers and

prospective

customers

! Ac"uire

customers and

prospective

customers

# $eliver

increased value

to the

customer.

# $eliver

increased value

to the

customer.% &nteract with

customers and

prospective

customers.

% &nteract with

customers and

prospective

customers.

' Customi(e

by customer

segment

' Customi(e

by customer

segment

) $evelop

product

services

Channels to

meet

customer*s

needs

) $evelop

product

services

Channels to

meet

customer*s

needs

+ $ifferentiate

based on

customer

needs,

characteristicsand behavior.

+ $ifferentiate

based on

customer

needs,

characteristics

and behavior.

.nderstand

customer*s

needs

.nderstand

customer*s

needs

CRMCRM

&.1 ) CRM IN ,AN-ING SECTOR

-e have seen that relationship mar&eting implies attracting, maintaining and enhancing

customer relationship. %t is a strategy to learn more about customer4s needs and behavior

in order to develop stronger relationship with them.


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Te "or#es o" (ere'ulation 'lo/ali0ation an( a(%an#in' te#nolo' a%e in#rease( te

#om!etiti%e !ressure in te /an2in' in(ustr.

The %ndian ban&ing industry too is going through turbulent times. 2ince the financial

reforms started, ban&s have been given a great degree of freedom in determining their

rate structure for deposit and advances as well as their product range. The freedom of

choice which ban& customers did not have earlier because of standardi#ed products and

regimented interest rates has now been given to the customers.

5an&s are functioning increasingly under the competitive pressures emanating from

within the ban&ing system, from non ban&ing institutions as well as from the domestic

and international capital mar&ets. Thus, in this era of increased competition, in order to

prosper, it has now become imperative for the ban& to focus on developing longterm

relationships with their customers.

Te "o#us o" /an2s soul( /e to si"t teir orientation "rom transa#tion mar2etin' to

#ulti%ation o" relationsi! mar2etin'.

Ma3or /ene"its o" !ursuin' Relationsi! Mar2etin' is4 Retainin' #ustomer as

a#5uirin' ne6 #ustomer is more #ostl tan retainin' e7istin' ones. Moreo%er te lon'

time #ustomer ten(s to /e less !ri#e sensiti%e an( usuall !ro%i(e "ree 6or(8o"8mout

a(%ertisin' an( re"errals.

&.& ) ,ENE9ITS O9 CRM TO ,AN-S

CRM /anking 0ocuses on the Customer

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CRM manages to places the customer at the focal point of the organi#ation in order to

cater to his needs, satisfy him and thus ma'imi#e the profits of the organi#ation. 5an&ing

CRM understands the needs of the customer and integrates it with people, technology,

resources and business rocesses. %t focuses on the e'isting data available in the

organi#ation and uses it to improve its relationship with customers. 5an&ing CRM uses

information and analytical tools to secure customer focus. Thus it is completely essential

that ban&s implement CRM in order to secure this.

1verall 2rofitability

CRM enables ban&s to give employee;s better training that helps them face customers

easily. %t achieves better infrastructure and ultimately contributes to better overall

performance. The byproducts of CRM ban&ing solutions are customer acquisition,

retention and profitability. 5an&s that don;t implement CRM will undoubtedly find

themselves with lesser profitability coupled with a sharp decline in the number of

customers.

3atisfied Customers

%t is important to ma&e a customer feel as if he L she is the only one this will go a long

way in satisfying and retaining them. 5an&ers need a return on investment and it has been

proved that increase in customer satisfaction more than contributes a fair share to R%.

The main value of CRM ban&ing lies in satisfaction and increased retention of customers.

Centrali(ed &nformation

CRM ban&ing solutions manage to clearly integrate people, processes and technology.

CRM ban&ing provides ban&s with a holistic view of all ban& transactions and customer

information as well and stores it in a single data warehouse where it can be studied later.

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&.$ ) ,ENE9ITS O9 CRM TO CUSTOMERS

Customer relationships are becoming even more important for ban&s as mar&et

conditions get harder. Competition is increasing, margins are eroding, customers are

becoming more demanding and the lifecycles of products and services are shortening

dramatically. )ll these forces ma&e it necessary for ban&s to intensify the relationship

with their customers and offer them the services they need via the channels they prefer.

2ervice provisioning throughout the entire life cycle of the corporate customer, from

the initial stages to the establishment of a close, longterm relationship with profitable

clients,

ptimi#ation of the use of ban& resources, such as alternative channels of distribution

!internet and home ban&ing",

2ignificant reduction in and limitation of operational costs through system automation

and standardi#ation,

Gow maintenance and e'pansion costs owing to the use of modern administration

tools which allow ban& employees to ma&e a wide range of modifications to the

system

CRM permits businesses to leverage information from their databases to achieve

customer retention and to crosssell new products and services to e'isting customers.

Companies that implement CRM ma&e better relationships with their customers,

achieve loyal customers and a substantial paybac&, increased revenue and reduced

cost.

CRM when successfully deployed can have a dramatic effect on bottomline

performance. ?or e'ample, Gowe4s ome %mprovement -arehouse, in a span of $K

months, achieved a (D+ percent return on investment !R%" on its N $$m CRM

investment.

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)ccording to a study conducted in the sector of ban&ing, convenience of location,

price, recommendations from others and advertising are not important selection

criteria for ban&s. ?rom customers4 point of view, important criteria are3 account and

transaction accuracy and carefulness, efficiency in correcting mista&es and

friendliness and helpfulness of personnel. Thus, CRM, highquality attributes of the

product L service and differentiation proved to be the most important factors for

customers.

)nother study conducted in a 9uropean ban& shows that with CRM, the ban& was

able to focus on profitable clients through efficient segmentation according to

individual behavior. %nformation about 6who buys what and how much4 enabled the

ban& to have a commercial approach based on the client and not solely on the

product. Thus, the ban& was able to better satisfy and retain its customers.

$ ) CHALLENGES 9ACE ,: ,AN-S IN SUCCESS9UL

IMPLEMENTATION O9 CRM

Many organi#ations are considering introducing CRM systems or are in the process ofdoing so. The main concern of these organi#ations is their ability to ma&e the necessarychanges at the level of organi#ational strategy that the introduction of the CRM systemrequires. rgani#ations are also concerned about damaging their e'isting customer caresystem. Their fears are based on past failures in their own or in other organi#ations.

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-ith most other types of information systems we are concerned mainly with operationsrelevant to the organi#ation4s internal resources. 5y contrast, introducing a CRM systemaffects the company4s customers, who are e'ternal to the organi#ation and beyond itscontrol. The company4s reputation and future are greatly dependent on the success of the

CRM implementation. ?ailure in the introduction of the CRM system, especially inservice and sales phone centers, can result in real disaster for the organi#ation. Thepresent article focuses on issues that must be addressed in order to ensure that a newCRM system is introduced in the organi#ation in the best possible way, generatingma'imum return on investment, without affecting current activity, and with minimal ris&.

The implementation of CRM systems varies from one organi#ation to the ne't1 each onemust be treated as a separate application, having different needs and requiring differentsolutions.

-e identify seven types of CRM applications3

!$" CRM systems for call centers1!(" CRM systems for service representatives in the field1!7" CRM systems for telemar&eting1!:" CRM systems for sales managers in the field !sales managers who are in directcontact with the client"1!+" CRM systems for mar&eting1!D" analytic CRM systems for the creation of 5% insights and reports based on a databaseof client contacts1 and!I" ORM systems for servicing partners and clients over the %nternet. The last three arenot discussed in this article.

-hat factors can interfere with the successful implementation of a CRM system at thefunctional and technological level/ %n our e'perience, three main factors are responsiblefor crucial failures. To the e'tent that %T can solve these problems, part of the difficultiesin introducing CRM systems into the organi#ation would disappear. @ote however, that insome cases %T is not in a position to solve these problems, and the implementers of theCRM system must cope with these failures.

The first problem occurs when the CRM system is not connected directly to theoperational systems. %n the worst case it is not possible to access the operational andlegacy data about clients and products through the CRM, and users must accesssimultaneously other systems, resulting in double entries. %n another problematic case theconnection is not complete and transparent. %n this case it is possible to access theoperational system not only through the CRM but also directly, circumventing the CRMand rendering its use optional. The second problem has to do with a client database thatcontains low quality data or with data that is missing altogether. The third problem is one

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of poor performance, the result of the fact that the CRM system is connected to a largenumber of systems and often interacts with various technologies, many of them legacysystems. %f the transition to CRM does not include the upgrading of the technology oflegacy systems, performance is degraded.

9ven if the CRM system was developed under optimal conditions, several failures andchallenges are built into every CRM system at the organi#ational level. -e must be awareof these failures and challenges and create solutions for them as part of the training anddeployment process. The introduction of a CRM system requires a period of time forentering client data into the system. This detailed information is needed later to conductan intelligent dialog with the client. 5ut often those who feed the data into the CRMsystem are not the ones who benefit from the data, and have therefore no interest inentering the data in the first place, and certainly not in the best and most reliable waypossible. )nother phenomenon we encountered in the implementation of CRM systems isthat those who could benefit from the data are not using it often enough, which reducesthe business value that the CRM system was supposed to provide to the organi#ation. The

infrequent use is the result of a lac& of awareness of its e'istence or of a lac& of faith inits quality.

)t call centers, implementation of a CRM system involves several unique issues relatedto the fact that these vital, (:LI systems cannot be down even for a few moments. Callcenters e'perience a high turnover of personnel. eavy use of students creates additionalproblems !for e'ample, it is impossible to introduce a new CRM system during the e'amperiod". CRM systems intended for sales managers are sub0ect to conflict with the salesmanager4s personal interest. 2ales managers prefer not to e'pose their leads, contactpersons, and the status of their transactions, and may try to prevent entering the completedata into the system. @either are sales managers enthusiastic about the level of oversightmade possible by entering data into the CRM system. 2ales managers are generallypowerful players in the organi#ation, who can oppose the introduction of the system.They also see& the reali#ation of immediate profits, whereas the benefit of the system isoften felt at a later stage.

-hat is needed to succeed in the introduction of a CRM system/ The success of a CRMpro0ect depends first and foremost on the people who implement it and on the manner inwhich they use the system. ) wor&ing CRM system that is not being used is useless. )smart CRM system requires a smart user. Therefore the successful deployment of a CRMsystem depends on upgrading the entire sales and service organi#ation, including thepersonnel and the supporting tools.

3ome basic problems :

The difficulty of obtaining a complete view of customers.

The need to move away from dis0ointed, standalone, and inconsistent channels to

provide a cohesive, multichannel offering.

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The burden of disconnected legacy systems and disparate databases that store client

financial data. The cost and comple'ity of meeting stringent government regulatory and client

security and privacy requirements. The pressure on margins and growth prospects from increased competition.

The costs associated with retaining customers and developing customer loyalty.

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;.1 ) SER*ICES PRO*IE ,: STATE ,AN- O9 INIA

2tate 5an& of %ndia !25%" is the largest ban& in %ndia. %f one measures by the number of

branch offices and employees, 25% is the largest ban& in the world. 9stablished in $KAD as

5an& of 5engal, it is the oldest commercial ban& in the %ndian 2ubcontinent. 25%

provides various domestic, international and @R% products and services, through its vast

networ& in %ndia and overseas. -ith an asset base of N$(D billion and its reach, it is a

regional ban&ing behemoth. The government nationali#ed the ban& in $++, with the

Reserve 5an& of %ndia ta&ing a DA ownership sta&e. %n recent years the ban& has

focused on two priorities, $", reducing its huge staff through Folden handsha&e schemes

&nown as the Joluntary Retirement 2cheme, which saw many of its best and brightest

defect to the private sector, and (", computeri#ing its operations.

These are some services provided by 25%

3A4&563 /A57 ACC1.5T :

i. 2avings 5an& )ccounts !25 )Lcs" are designed to help customers inculcate the habit of

savings. %t helps the customers &eep their surplus funds with the ban& and earn interest

while providing the fle'ibility for withdrawals.

ii. 25 )Lcs can be opened by an eligible individual in single name or 0ointly with others

and by certain organisationsLagencies approved by R5%.

iii. The prospective customer will need to comply with the Enow *our Customer

!E*C" guidelines which are mandatory. The ob0ective of E*C guidelines is to prevent

misuse of the ban&ing system intentionally or unintentionally for criminal purposesL

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money laundering and other fraudulent activities. The E*C guidelines also help ban&s to

understand their customers better.

iv. The customer identification will be on the basis of documents provided by the

customer as !a"


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vii. The applicant!s" will need to come to the branch, in person, for opening the account

and will sign at the relevant places in the presence of a 5an& fficial. The introducer

may be required to come to the 5an& in person if it is so warranted.

viii. %nterest P 7.+ p.a. with half yearly interests is paid on 25 )Lcs on the minimum

balance maintained in the account between the $Ath and the last day of the month.

%nterest is credited on =une 7A and Hecember 7$every year. The interest rate and the

method of application are sub0ect to changes from time to time.

i'.. ) passboo& is issued in all 2avings 5an& )ccounts.


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iv. The customers may receive the statements of account according to the frequency

desired by them.

v. Cheque boo&s are issued to all Current )ccount holders and all withdrawals

should be made only through issue of cheques. ) cheque should not be issued for

an amount of less than Rs. +AL.

vi. ) cheque which is presented more than D months after the date of issue will be

treated as 8stale8 and shall not be paid. 2uch cheques shall be paid only after

revalidation by the drawer.

vii. Cheques should not be drawn without adequate balance or against uncleared

effects, in order not to attract the penal provisions of section $7K of the @egotiable

%nstruments )ct.

viii. The cheque boo& should be &ept safely to prevent any misuse and consequential

loss to the depositor!s". The loss of any cheque or the cheque boo& should be

promptly reported to the 5an&.

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i. Term Heposit )ccounts can be opened by individuals, partnership firms, private

and public limited companies, >?sLspecified associations, societies, trusts etc.

ii. ?ormalitiesLprocedures relating to identification and introduction for opening of

Term Heposit )ccounts in the name of individuals are same as those mentioned

for 2avings 5an& )ccount. ?or term deposit accounts of limited companies,

partnership firms, societies, trusts etc. the documentation formalities will be made

available on request.

iii. The 5an& is required to obtain


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i'. Term Heposit )ccount can be transferred from one branch to another free of cost

but not to a branch of )ssociate 5an& of 25%. The depositor has the option to

submit his application and the THR at the transferor or transferee branch.

32C&A9 TRM $213&T ACC1.5T

i. 2pecial Term Heposit !2TH" )ccount can be opened in the same way as the Term

Heposit )ccount. The interest on the 2TH )ccount is compounded at quarterly

intervals and principal and interest are paid on maturity.ii. Minimum and ma'imum period of deposit may be I days and $(A months

respectively.Minimum and ma'imum periods are sub0ect to change.

iii. Minimum amount of deposit is Rs.$,AAAL and thereafter, in multiple of Rs.$AAL.

iv. Goan up to A of principal and accrued interest is available against 2pecial Term

Heposit.

v. ther terms and conditions are same as in case of Term Heposit )ccount.

vi. The 5an& offers other variants of fi'ed deposits li&e recurring deposit accounts

etc. ?urther details can be had from the branch where you wish to open the

account.

C;. C199CT&15 219&C

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GNGcrm in Banks