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CRM : MAKING IT SIMPLE FOR BANKING INDUSTRY. Submitted To: Submitted by: Prof.
K. Siva Reddy Sachin Bansal 09BSHYD0711 Tanmay Garg 09BSHYD0912 Prerak Dhawan
09BSHYD0586 Preetish Kr. Singh 09BSHYD0585 Sarita Sethi 09BSHYD0742 Priyanka
Gunturu 09BSHYD0600 pg. 2 Index 1. Introduction to banking 3 Importance of
banking 3 Need for CRM 4 2. Introduction to CRM 5 Phases of CRM 5 Benefits of
CRM 6 Types/variations of CRM 7 Implementations of CRM 10 Importance of CRM in
banking 12 Challenges in CRM implementation 14 3. CRM initiatives at SBI 16 CRM
and SBI Life 16 4. CRM initiatives at HDFC Bank 19 About HDFC bank 19 Challenges
20 CRM solutions 20 Results 21 VbV facility for HDFC customers 21 Offers 21 RAP
computer telephony integration 22 5. Research Methodology 23 Objective 23
Methodology 23 Demographics of sample 23 Data Analysis 24 Qualitative Analysis
25 Quantitative Analysis 27 Data Interpretation 29 6. Conclusion 30 7.
References 31 pg. 3 Introduction to Banking Sec 5 (b) of the Banking Regulation
Act, 1949 defines banking as ³accepting for the purpose of lending or
investment, of deposits of money from the public, repayable on demand or
otherwise, and withdrawal by cheque, draft, order or otherwise´. Prior to
initiation of reforms in 1991, Indian banking industry suffered from lack of
competition, low capital base, inefficiency and high intermediation costs. Ever
since the bank nationalization of 1969, the banking sector had been dominated by

the public sector along with a high degree of financial repression characterized
by administered interest rates and allocated credit. Banking sector reforms of
the last two decades have placed greater emphasis on structural measures and
improvement in standards of disclosure and levels of transparency in order to
align the Indian standards with international best practices. Reforms have
brought about considerable improvements as reflected in various parameters
relating to capital adequacy, asset quality, profitability and operational
efficiency. The key objective of reforms in the banking sector in India has been
to enhance the stability and efficiency of banks. An outstanding feature of
banking sector reforms in India has been the emergence of micro credit as the
most suitable and practical alternative to the conventional banking in reaching
the hitherto unreached poor population. The Self-help Group (SHG)-Bank Linkage
Programme was formally launched in the year 1992 as a flagship programme by
National Bank for Agriculture and Rural Development (NABARD) and aptly supported
by the Reserve Bank of India (RBI) through its policy support. Importance of
Banking Banks play very important role in the economic life of the nation. The
health of the economy is closely related to the soundness of its banking system.
Although banks create no new wealth but their borrowing, lending and related
activities facilitate the process of production, distribution, exchange and
consumption of wealth. In this way they become very effective partners in the
process of economic development. Today, modern banks are very useful for the
utilization of the resources of the country. The banks are mobilizing the
savings of the people for the investment purposes. In recent years, the banking
industry around the world has been undergoing a rapid transformation. In India
also, the wave of deregulation of early 1990s has created heightened competition
and greater risk for banks and other financial intermediaries. The cross-border
flows and entry of new players and products have forced banks to adjust the
product-mix and undertake rapid changes in their processes and operations to
remain competitive. pg. 4 Need for C.R.M. Unlike in the past, the banks today
are market driven and market responsive. With the entry of new players and
multiple channels, customers (both corporate and retail) have become more
discerning and less "loyal" to banks. This makes it imperative that banks
provide best possible products and services to ensure customer satisfaction. To
address the challenge of retention of customers, there have been active efforts
in the banking circles to switch over to customer- centric business model. The
success of such a model depends upon the approach adopted by banks with respect
to customer data management and customer relationship management. Over the
years, Indian banks have expanded to cover a large geographic & functional area
to meet the developmental needs. They have been managing a world of information
about customers - their profiles, location, etc. They have a close relationship
with their customers and a good knowledge of their needs, requirements and cash
positions. Achieving customer focus requires leveraging existing customer
information to gain a deeper insight into the relationship a customer has with
the institution, and improving customer service-related processes so that the
services are quick, error free and convenient for the customers. As is proved by
the experience, banks are now realizing that one of their best assets for
building profitable customer relationships especially in a developing country
like India is the branch- branches are in fact a key channel for customer
retention and profit growth in rural and semi- urban set up. However, to
maximize the value of this resource, our banks need to transform their branches
from transaction processing centers into customer-centric service centers. This
transformation would help them achieve bottom line business benefits by
retaining the most profitable customers. Branches could also be used to inform
and educate customers about other, more efficient channels, to advise on and
sell new financial instruments like consumer loans, insurance products, mutual
fund products, etc. There is a growing realization among Indian banks that it no
longer pays to have a "transaction- based" operating model. There are active
efforts to develop a relationship-oriented model of operations focusing on
customer-centric services. The biggest challenge our banks face today is to
establish customer intimacy without which all other efforts towards operational
excellence are meaningless. The banks need to ensure through their services that
the customers come back to them. This is because a major chunk of income for
most of the banks comes from existing customers, rather than from new customers.
Customer relationship management (CRM) solutions, if implemented and integrated
correctly, can help significantly in improving customer satisfaction levels.
Data warehousing can help in providing better transaction experiences for
customers over different transaction channels. This is because data warehousing
helps bring all the transactions coming from different channels under the same
roof. Data mining helps banks analyze and measure customer transaction patterns
and behavior. This can help a lot in improving service levels and finding new
business opportunities. pg. 5 Introduction to C.R.M. The term ³CRM´ stands for
Customer Relationship Management. Customer relationship management (CRM) is a
broadly recognized, widely-implemented strategy for managing and nurturing a
company¶s interactions with customers, clients and sales prospects. It is a
process or a methodology used to learn more about customers' needs and behaviors
in order to develop stronger relationships with them. CRM is as a process that
will help bring together lots of pieces of information about customers, sales,
marketing effectiveness, responsiveness and market trends. This process helps
businesses use technology and human resources to gain insight into the behavior
of customers and the value of those customers. It involves using technology to
organize, automate, and synchronize business processes²principally sales
activities, but also those for marketing, customer service, and technical
support. The overall goals are to find, attract, and win new clients, nurture
and retain those the company already has, entice former clients back into the
fold, and reduce the costs of marketing and client service. When an
implementation is effective, people, processes, and technology work in synergy
to increase profitability, and reduce operational costs. Phases of CRM The three

phases in which CRM can help to support the relationship between a business and
its customers is explained below: y Acquire: A CRM initiative can help a
business in acquiring new customers through excellent contact management, direct
marketing, selling and fulfillment. y 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. ACQUIRE RETAIN ENHANCE pg. 6 y Retain: CRM
software and databases enable a business to identify and reward its loyal
customers and further develop its targeted marketing and relationship marketing
initiatives. Benefits of C.R.M. These CRM initiatives have been shown to help
companies attain the following objectives: y To provide better customer service.
y To increase customer revenues. y To discover new customers. y To cross sell/up
sell products more effectively. y To help sales staff close deals faster. y To
make call centers more efficient. y To simplify marketing and sales processes.
The advantages can also be summarized according to the domain it contributes to:
Marketing y To make intelligent business decisions with enhanced customer
insights. y To increase marketing velocity and speed to market. y To maximize
visibility into and control of your entire marketing process. y To drive
customer demand up. y To increase returns on the marketing investments. Sales y
To grow profitable relationships. y To maintain focus on productive activity. y
To eliminate barriers to productivity. y To improve sales efficiency service. y
To transform service into a profitable line of business. y To increase customer
loyalty. y To increase the sales revenue. y T reduce costs of customer service
and field service y To decrease service giveaways/ Poka yokes.
pg. 7 Web channel enablement y To drive revenue and extend market reach. y To
increase customer convenience and satisfaction. y To reduce the cost of sales
and support. y To build lasting customer loyalty. y To improve sales and service
profitability. Running and customer interaction center y To increase customer
satisfaction. y To improve credibility with your customers. y To increase
revenue and productivity. y To manage the customer interaction life cycle.
Types/variations of CRM in terms of the desired benefits Sales force automation
Sales force automation (SFA) involves using software to streamline all phases of
the sales process, minimizing the time that sales representatives need to spend
on each phase. This allows sales representatives to pursue more clients in a
shorter amount of time than would otherwise be possible. At the heart of SFA is
a Contact management system for tracking and recording every stage in the sales
process for each prospective client, from initial contact to final disposition.
Many SFA applications also include insights into opportunities, territories,
sales forecasts and workflow automation, quote generation, and product
knowledge. Marketing Systems for marketing (also known as marketing automation)
help the enterprise identify and target its best clients and generate qualified
leads for the sales team. A key marketing capability is tracking and measuring
multichannel campaigns, including email, search, social media, and direct mail.
Metrics monitored include clicks, responses, leads, deals, and revenue. Customer
Service and Support Recognizing that service is an important differentiator,
organizations are increasingly turning to technology platforms to help them
improve their clients¶ experience while aiming to increase efficiency and
minimize costs. The core for these applications has been and still is
pg. 8 comprehensive call center solutions, including such features as
intelligent call routing, computer telephone integration (CTI), and escalation
capabilities. Analytics Relevant analytics capabilities are often interwoven
into applications for sales, marketing, and service. These features can be
complemented and augmented with links to separate, purpose- built applications
for analytics and business intelligence. Sales analytics let companies monitor
and understand client actions and preferences, through sales forecasting, data
quality, and dashboards that graphically display Marketing applications
generally come with predictive analytics to improve segmentation and targeting,
and features for measuring the effectiveness of online, offline, and search
marketing campaign. Web analytics have evolved significantly from their starting
point of merely tracking mouse clicks on Web sites. By evaluating ³buy signals,´
marketers can see which prospects are most likely to transact and also identify
those who are bogged down in a sales process and need assistance. Marketing and
finance personnel also use analytics to assess the value of multi- faceted
programs as a whole. Integrated/Collaborative Departments within
enterprises²especially large enterprises²tend to function in their own little
worlds. Traditionally, inter-departmental interaction and collaboration have
been infrequent and rivalries not uncommon. More recently, the development and
adoption of the tools and services has fostered greater fluidity and cooperation
among sales, service, and marketing. This finds expression in the concept of
collaborative systems which uses technology to build bridges between
departments. Social Media Social media sites like Twitter and Facebook are
greatly amplifying the voice of people in the marketplace and are predicted to
have profound and far-reaching effects on the ways companies manage their
clients. This is because people are using these social media sites to share
opinions and experiences on companies, products and services. As social media
isn¶t moderated or censored, individuals can say anything they want about a
company or brand, whether pro or con. Increasingly, companies are looking to
gain access to these conversations and take part in the dialogue. More than a
few systems are now integrating to social networking sites. Social media
promoters cite a number of business advantages, such as using online communities
as a source of high-quality leads and a vehicle for crowd sourcing solutions to
client-support problems. Companies can also leverage client stated habits and
preferences to personalize and even ³hyper- target´ their sales and marketing
communications.
pg. 9 Non-profit and Membership-based Systems for non-profit and
membership-based organizations help track constituents and their involvement in
the organization. Capabilities typically include tracking the following: fund-
raising, demographics, membership levels, membership directories, volunteering
and communications with individuals. Strategy Choosing and implementing a system
is a major undertaking. For enterprises of any appreciable size, a complete and
detailed plan is required to obtain the funding, resources, and company- wide
support that can make the initiative successful. Benefits must be defined, risks
assessed, and cost quantified in three general areas: y Processes: Though these
systems have many technological components, business processes lie at its core.
It can be seen as a more client-centric way of doing business, enabled by
technology that consolidates and intelligently distributes pertinent information
about clients, sales, marketing effectiveness, responsiveness, and market
trends. Therefore, before choosing a technology platform, a company needs to
analyze its business workflows and processes; some will likely need
re-engineering to better serve the overall goal of winning and satisfying
clients. Moreover, planners need to determine the types of client information
that are most relevant, and how best to employ them. y People: For an initiative
to be effective, an organization must convince its staff that change is good and

that the new technology and workflows will benefit employees as well as clients.
Senior executives need to be strong and visible advocates who can clearly state
and support the case for change. Collaboration, teamwork, and two-way
communication should be encouraged across hierarchical boundaries, especially
with respect to process improvement. y Technology: In evaluating technology, key
factors include alignment with the company¶s business process strategy and
goals; the ability to deliver the right data to the right employees; and
sufficient ease of use that users won¶t balk. Platform selection is best
undertaken by a carefully chosen group of executives who understand the business
processes to be automated as well as the various software issues. Depending upon
the size of the company and the breadth of data, choosing an application can
take anywhere from a few weeks to a year or more.
pg. 10 Implementation of CRM in Banking Sector Implementing a customer
relationship management (CRM) system at a bank takes careful planning. Banks
need to involve key employees in the vendor decision so that they choose a
system which will give them the most for their investment. Ease of use and
ability to view information quickly are equally important to employees and
managers. As Destinationcrm.com points out, CRMs helps firms manage customer
relationships better, and customer relationships are vital to any company's
success. Implementing a CRM system at a bank is a first step toward improved
customer relationships. \ 1. Step 1 Gain employees' opinions. Ask bankers which
data is important to them when tracking customers and prospects. Most bank CRM
systems include contact information, account information and potential sale
amounts. They also include an estimate of how likely it is that the banker will
convert a prospect into a new customer. When employees provide input into the
new system decision, they will be more willing to use the CRM when it is rolled
out.
pg. 11 2. Step 2 Research vendors: Ask similar sized banks for vendor
recommendations. Find out if the vendor provided appropriate CRM features for
the bank's specific needs. Ask if the company delivered the system on time and
if the firm provided sufficient support and training to employees after the
sale. Create a spreadsheet comparing vendor features and pricing. 3. Step 3
Narrow the choices to three or four vendors. Meet with department managers that
will use the CRM system. Review the vendor choices and make a vendor decision as
a group. Arrange training by combining vendor resources and internal training
resources. Allow ample time for employees to learn the CRM system before holding
them accountable for using it.
pg. 12 Importance of CRM in Banking Sector Customer Relationship Management
deals with the interactions with the customers (current or potential) across
multiple touch points including the Internet, bank branch, call center, field
organization and other distribution channels. It helps banks in the following
ways: 1. Campaign Management - Banks need to identify customers, tailor products
and services to meet their needs and sell these products to them. CRM achieves
this through Campaign Management by analyzing data from banks internal
applications or by importing data from external applications to evaluate
customer profitability and designing comprehensive customer profiles in terms of
individual lifestyle preferences, income levels and other related criteria.
Based on these profiles, banks can identify the most CAMPAIGN MANAGEMENT
CUSTOMER INFORMATION CONSOLIDATION 360-DEGREE VIEW OF COMPANY
PERSONALIZED SALES HOME PAGE
ACTIVITY MANAGEMENT
OPERATIONAL INEFFICIENCY REMOVAL
ENHANCED PRODUCTIVITY
CRM WITH BUSINESS INTELLIGENCE
IMPORTANCEO FCRMIN BANKINGSECT OR
CRM In Banks
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