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Customer Relationship Management System in Banking Sector

The document discusses customer relationship management (CRM) systems in the banking sector in India. It outlines three types of CRM: operational CRM, analytical CRM, and collaborative CRM. It also provides examples of CRM implementation at Yes Bank and Punjab National Bank. Some key challenges to CRM adoption in Indian banks include fragmented customer data, legacy systems, lack of skills and understanding of how to utilize customer data, and the need to change organizational culture and structures to be more customer-centric.

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64 views

Customer Relationship Management System in Banking Sector

The document discusses customer relationship management (CRM) systems in the banking sector in India. It outlines three types of CRM: operational CRM, analytical CRM, and collaborative CRM. It also provides examples of CRM implementation at Yes Bank and Punjab National Bank. Some key challenges to CRM adoption in Indian banks include fragmented customer data, legacy systems, lack of skills and understanding of how to utilize customer data, and the need to change organizational culture and structures to be more customer-centric.

Uploaded by

anon_770872375
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Customer relationship management

system in banking sector


“Customer relationship management (CRM) is a term that refers to practices,
strategies and technologies that companies use to manage and analyze
customer interactions and data throughout the customer lifecycle, with the
goal of improving customer service relationships and assisting in customer
retention and driving sales growth.”

In Indian banking Customer Relationship Management is still at a nascent


stage. A very small proportion of its potential has been utilised. The
concept has been implemented on a limited scale. The paper investigates
the impediments to successful implementation of CRM. An attempt is made
to chart out a strategic framework to realise the benefits of Customer
Relationship Management.

Types of CRM in Banking Sector :-


1. Operational CRM
In this, CRM software packages are used to track and efficiently
organise inbound and outbound interactions with customers including
the management of marketing campaigns and call centres. Operational
CRM supports frontline processes in sales, marketing and customer
service, automating communications and interactions with the
customers.
Benefits of Operational
(a) Sales Force Automation
(b) Customer Service and Support
(c) Enterprise Marketing Automation
2. Analytical CRM
It is about analysing customer information to better address marketing and
customer service objectives and deliver the right message to the right
customer at the right time through the right channel.
Benefits of Analytical CRM
(a) Customer Retention

(b) Fraud Detection


(c) Optimising marketing efforts as per customer life time value
(d) Credit Risk Analysis
(e) Segmentation and targeting
(f) Development of customised new products matching the specific
preferences and priorities of customers.

3. Collaborative CRM
These involve systems facilitating customers to perform services on their
own through a variety of communication and interactive channels. It brings
people process and data together and enables channelling of data and
information appropriately to bank staff for proactive decision making and
enhanced informed customer service and support activities.
Benefits of collaborative
a) Providing efficient customer communication across a variety of channels
(b) Online services to reduce customer service costs
(c) Providing access to customer data while interacting with customers.
Examples related to CRM:-

 Yes Bank has developed YCCRM (Yes Bank


Collaborative CRM), the prominent features of which are
‘discussion boards’ and ‘templates’. These enable sharing of
relevant customer information to all concerned staff members to
design new products, provide proactive service, and informed
customer handling leading better service. It enables collaboration
among staff and customers to create higher customer value
through use of CRM software.
 Punjab National Bank deployed CRM software with modules of
Prospect Management, Lead Management, Activity Management,
Product Management, Complaint Management and Business
Intelligence Reporting. The payoffs are in terms of increased
customer base, cross- selling, sales force optimisation, efficient
lead management and higher productivity.

CRM TECHNOLOGY ISSUES:-

The following are the impediments to CRM implementation in context


of technology:
1. Misconception about role of technology: Most officers perceive technology as
a limited to record of information and transaction. The use of technology in further
sophisticated information processing and dissemination is not done.
2. Lack of Integration: There are multiple channels and multiple technologies in
use simultaneously in customer interface, service and sales. The integration
of this complex system of technologies is a challenge.
3. Empowerment to frontline staff: Frontline staffs have customer profile and data.
Most of them have no motivation to further process these and make full utilisation
of these to provide better services and proactive selling effort. They are neither
trained to use customer analytics nor to customise the Banks offering.
4. Underutilisation: the single integrated view of customer ,past transactions
preferred mode of business are known, but no mechanism is in place to utilise this
with aid of software like lead management and activity management for higher
effectiveness in sales and service.

(1) Fragmented Data: banks have multiple repositories of data accumulated across
various channels. Systematically collecting and organizing this huge data is big
challenge.
(2) Legacy Systems: Historical data collected from legacy systems tend not to
have been collected in any standard form.
(3) Quality of data: As huge amount of data has to be cleaned and a lot of
missing data has to be identified and included. This process has to be carried out
across branches which in addition to their core tasks have this work.
(4) Lack of understanding, skill and initiative to manage and utilise data:
Employees expected to organise and systematically manage data may not dot
efficiently because of the lack of understanding of the strategic perspective of this
activity. They also lack the necessary infrastructure and skill to complete this task.

People issues

1. Lack of knowledge and skills in converting data to customer knowledge


2. Lack of motivation for utilising the potential of CRM solution
3. Inadequate performance management parameters
4. Less or insufficient decision making authority : In order to use CRM concept
towards customer centricity, sufficient decision making power is required to
provide customised, responsive and proactive services.
5. Training: Staff lacks training in IT, its applications, the complete use of software
and its applications as well as marketing skills, analytical skills, uses of customer
information and service skills for implementation CRM.
Process issues
Process issues

As CRM is an organisation wide strategy the entire processes need to be


aligned appropriately. Some important process issues are:

1. Change in Culture: The CRM implementation demands a


change in organisational culture in terms of vision, mission,
philosophy, and shared values. This encompasses a fundamental
change in the organisational practices and employee behaviour.
2. Breaking the silos: CRM cannot succeed in Silo structure of
departments. It demands integration and collaboration of all
departments on a continuous basis. So, Breaking of silos prevalent in
traditional organisation structure is a challenge.
3. Change in Structure and Systems: CRM success lies in ownership of
CRM by all departments with Marketing in the strategic role of
combining efforts in all these towards better customer service. This
basic structural change from product centric organisation to customer
centric organisation faces impediments in terms of role conflicts,
ambiguity, resistance and attitudinal impediments.
4. Demand for more pro-activeness and flexibility: The former strict
hierarchical and rigid structure has to be transformed to flexible,
responsive and proactive structure. This demands top management
support, proper training and efficient follow up systems. In addition to
behavioural issues the full utilisation of CRM benefits cannot be
attained unless this is enabled.

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