Case Study CRM IN BANKING : A CASE STUDY OF ICICI BANK Globally, regulation and technological improvements are responsible

for the vast majority of innovations in banking over the past quarter century. The introduction of personal computers and the proliferation of ATMs in the 1970s captured the bank managements attention. The regulatory changes in the 1980sfuelled much of the industrys growth, which was followed by downsizing as bankers focused on creating amarket presence which resulted in significant merger activity. Recent technological improvements are atthe root of the bankers focus as well as a target for their significant investment today. In fact, according torecent projections, bankers and their financial service company brethren will spend almost $ 7 billion thisyear on CRM and increase that by 14 per cent each year for the next several years. Why CRM? The Changing Environment The environment within which financial institutions operate has changed in recent years. It is now one of: Increased competition Growing product commoditization, and Diminishing margins Banking customers have also changed in recent years. Customers today are more knowledgeable,sophisticated and assertive than ever before. They demand higher levels of customer service, are less loyal,and more inclined to

switch to a competitor. Modern customers thus necessitate flexibility in hours of operation, greater convenience, customization, transparency, accessibility and control.This has led to a shift in business focus from transactional to relationship marketing. CRM Strategy Customers are the lifeblood of the business and the way in which a bank can protect and increase itscustomer base and ultimately its profitability is to build strong customer relationships through thedelivery of superior quality service and to meet customer needs better than the competitors. The CRMapproach focuses on maximizing value for the customer and the bank.Research has shown that the key drivers of customer loyalty are: Positive staff attitude Honesty, integrity and reliability Proactive advice and deliver of promise Consistent delivery of superior quality service Simplicity and ease of doing business Good after-sales service A fair effective complaints resolution policy. Focus on ICICI Banks Initiatives

The use of CRM in banking has gained importance with the aggressive strategies for customer acquisitionand retention being employed by banks in todays competitive milieu. This has resulted in the adoption of various CRM initiatives by these banks to enable them achieve their objectives.The steps that banks follow in implementing CRM are: Identifying CRM initiatives with reference to the objectives to be attained (such as increasednumber of customers, enhanced per-customer profitability, etc.), Setting measurable targets for each initiative in terms of growth in profits, number of customers,etc. and Evaluating and choosing the appropriate CRM package that will help the company achieve itsCRM goals (a comparison of pay-offs against investments could be carried out during the evaluation exercise).CRM has been deployed in retail banking. The challenges in managing customer relations in retail bankingare due to the multiple products being offered and the diverse channels being used for the distribution of the products. Customer expectation from banks can be summed up as: Any time anywhere service, personalized offers, and lower payouts. Aggressive marketing and promotions on the part of the banks have resulted in most customers happilyswitching loyalties to enjoy better privileges, thereby making the task of retaining them more difficult for the banks.The use of CRM

in banking has been essentially done for the following purposes: 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 intoaccount the profile of the customer (such as the lifecycle stage, economic background, familycommitments, 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 toenable effective targeting. After the integration is done, a profitability analysis of the customer needs to be undertaken to acquire an understanding of the profit-worthiness of the customer beforetargeting him with new offers. Sales reference material A consolidated information database on all products, pricing, competitor information, sales presentations, proposal templates and marketing collateral should be accessible to all the peopleconcerned. These prove to be very helpful in Sales Force Automation (SFA) wherein thesalesperson gets instantaneous access to all relevant material as and when it is required (especiallywhen 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 aunified view of the customer to enable a consistent approach. Removal of inconsistencies isnecessary 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