CRM in Banks

INTRODUCTION OF BANKING Banks:A bank can be defined as a corporate entity registered under the Bank Regulation Act, 1949 which is engaged with the activity of accepting deposits from the public on interest and providing loans at interest. Characteristics: In comparison to other institutions in the financial sector a bank has the following main characteristics:1) A bank is the only financial institution which can raise demand deposits i.e. deposits Which are payable to the customers on demand. 2) A bank is the only Financial Institution Which provides, its customers a cheque book facility with which customers make his demand on the book. 3) A cheque may be used either to withdraw cash or to direct the bank to make payment to desired payee on behalf of customers. 4) Both demand and a deposits placed with bank are covered by institution up to maximum of 1, 00,000 per A\C holder. This insurance is provided by Deposit Insurance and Cr. Guarantee Corporation (DICGC). 5) A Bank is the only institution which is entitled to lend against all categories of Assets. But not in case of intangibles.

Banking as an Emerging form of Service:As compared to good services are intangible products which exhibit the following characteristics:1

CRM in Banks

1) Services do not have self life and therefore cannot be carried forward from services period to another. 2) Services are perishable. 3) Maximizations of profit in relation to services are achieved by full utilization of resources during each service. 4) Consideration paid for services entitled the buyers to use convenience of the services for the given period. It does not transfer title to the product. E.g. Rent paid for Hotel Room or fees paid to Doctor. A Bank has three major resources a) Financial resources. b) Human resources. c) Infrastructural resources. Resources of a bank exhibit the same characteristics as shown by services industry on this A\C a bank can be classified as a services organization. Services essentially mans convenience provided by the bank can be listed out as follows. List of facilities and Services to Individuals: a) Housing loan b) Vehicle loan c) Education loan d) Personal loan e) Consumer loan List of Loans provided to business organization: a) Term loans ( Long term Assets) b) Housing loans. c) Vehicle loans. d) Loans against Investments
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e) Working capital loans ( Short Term Assets) Services: a) Merchant b) Foreign Exchange c) Investment d) Demat A\Cs e) Advisory services.

Development of the Banking Service: The Development of Banking in India can be studied under three phases: 1) Consolidation Phase (1947-1965)

2) The Innovative Phase (1965-1991) 3) Prudential Phase (1991-2006.)

1)Consolidation Phase: Immediately after independence the govt. nationalized the RBI. (100 share holding or RBI is owned by govt). The banking regulation Act 1949 provided the RBI with regulatory & super prizery power over the banking industry making it compulsory for every bank to be registered with the RBI. An Application of this Act, 566 banking organization were given by license for doing banking business. Most of this banks were owned by business houses having localized operations with small balance sheet strength. The RBI arranged mergers bet multiple banks to form 108 national level banks with much better balance sheet strength. Limitations were imposed on banks in respect of lending to promoters. The operations of banks interest, rates & several others features were standardized. The selective credit
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control system was introduced to ensure that speculator & hoarders did not misuse bank finance. The RBI enforced rules has to how much any borrower could borrow against a specified list of commodities, those list mainly contained essential items such as: - cement, cotton, rice, sugar, oil etc. interest rates & margins applicable to these loans were also specified by the RBI. RBI introduced the credit authorization skill (CAS) in terms of which banks were required to obtained prior approval of the RBI before releasing loans in access of Rs 25 lakhs.DICGC is created as a special body to insure the bank deposits up to Rs 1 lakh per act (account). The premium for this insurance is paid by the bank. These development help to provide a feeling of safety among bank depositors.

2) Innovative Phase: The industrial growth plan for the country was finalized in 1967-68 in terms of which substantial investment into industries was necessary in the rural & semi-urban areas. Banking development in the country till now had taken place only in urban cities areas private owners of banks were not interest in developing their banks in the interior areas of the country to overcome this problem the Govt. nationalized the 14 biggest private banks in the country in July 1969. The concept of social control over banks was introduced. This means that banks would be used for social developments & removing inequalities of Opportunity for getting loans & other services from the banking sector. In the post nationalization period banks expanded their branch networks in Interiors areas of the co-mobilizing deposits, inc the awareness about banking, providing loan facilities relevant to the rural population & insuring that adequate Credit was available for social development of the poor & needy population. Though this development were successful banks
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were not really equipt to deal with the new challenges this lead to high level of Non-Performing Assets (NPA) which adversely effect profitability of banks. One of the limitations in this project was the lack of insurance facilities available for rural credit schemes in order to develop this aspect of economic the govt. nationalized the general insurance cos in the country & converted them into General Insurance Corporation (GIC).These steps gave a big boast to the lending function of banks in terms of rural credit. This was one of the key elements which lead to a Green Revolution in India in the (1970-80).

3)Prudential Phase: For banking in 1991 the Govt introduced the concept of liberalization, which means that there would be gradual reduction in the restrictions for trading internationally with growth of international business. Banks would be required to deal in large transactions & attains the capability to manage complex transactions with a view took developing banking industries, the govt. set up a committee called Narsimhan Committee in 1991. This committee submitted its recommendation covering 4 major areas for banking development. a) Human Resources. b) Autonomy to Banks c) Technological up gradation. d) Structural changes. With a view to develop the human resources & insure efficiency of operations banks were allowed to a) Announce Voluntary b) Retrain personal to deal in insurance products & all kinds of investment related services.
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With regard to autonomy banks were given the following freedom:a) The selective credit control scheme or diluted so as to make it easy to operate. b) The Credit authorization scheme was withdrawn & replaced by the credit management system in which banks were given freedom to lend without prior approval of the RBI. c) Banks were free to fix interest rates on deposits individually. d) All regulations regarding lending interest rates were withdrawn. e) The CRR & SLR were reduced progressively so that banks had greater resources to lend. With regard to technological up gradation the banks implemented the following: 1) Most branches of Major Indian banks were fully computerized. 2) Core banking solutions were implemented i.e., all computerized branches of the bank were interconnected; these was the big help to customers. 3) Bank in stole large no. Of ATM. 4) Technological Banks have introduced the concept of mobile banking. 5) Internet bank. Structural changes:- The philosophy of bank growth has changed such that today banks are not increased the no. of branches but are preferring to open ATMs & centralized call centers to provide service to the customers through the electronic medium. In 1998 the Govt. again (constituted) form the Narsimham committee II to recommend areas in which banks could develop in order to become compitetive at the international level.

CRM in Banks

Some of the Recommendation made by the Committee are being periodically implemented by the RBI & these process is currently under consideration of RBI.

Indian banking is the lifeline of the nation and its people. Banking has helped develop vital sectors of the economy and usher in a new dawn of progress on the Indian horizon. The sector has translated the hopes and aspiration of millions of people into reality. 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. The deepening of technology has facilitated better tracking and fulfillment of commitments, multiple delivery channels for customers and faster resolution of miscoordinations. Unlike in the past, the banks today are market driven and market responsive. The top concern in the mind of every bank's CEO is increasing or at least maintaining the market share in every line of business against the backdrop of heightened competition. 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
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banks with respect to customer data management and customer relationship management. A. Introduction to CRM Customer Relationship Management (CRM) is at the core of any customer focused business strategy and includes the people, processes and technology questions associated with marketing, sales and service. Simply stated, CRM is about finding, getting and retaining customers. The aim of these systems is to assist in building lasting customer relationships to turn customer satisfaction into customer loyalty.

Ever increasing customer power creates the need for customer driven organization. The CRM concept is creating a strong customer supplier alliance and the pressure forging these alliances are stiff competition, emerging/new technologies, shorter product life cycles and quality revolution and just-in-time concept.

Banks are one of the prime users of CRM. Any bank would have such a customer that it would not be able to monitor manually and find out various customer trends and patterns. So it is essential to attract, retain and grow customer base effective management of the information about the customers and enhance relationship with them. This is where CRM comes in for the banks. The purpose of CRM is to improve the quality of market share. While it is good to keep all customers happy, there is a time to say goodbye to some customers when they no longer fit a companys business model. It does not about lets just make everybody happy. Shareholders want the good customer and thats the great value that CRM brings. CRM technologies are also designed help identify
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the appropriate channels to lower the cost of servicing lower-value customers.

The banking sector in India is increasingly realizing the importance of the customer as an asset. Continuous efforts are being made to improve customer relations and reduce customer turnover.

B. The Evolution of Customer Relationship Management.

CRM must start with a business strategy, which drives changes in the organization and work processes, which are in turn enabled by Information Technology. The reverse does not work.

The seeds of modern-day CRM were sown in the 1960s. Academic researchers found that the "4 Ps" marketing framework--product, price, place and promotion was less valuable for industrial or service-centric businesses where ongoing relationships were critical. By the 1980s, "Relationship Marketing" was used to describe this new focus on understanding customer segments, delivering ongoing quality service, and achieving high customer satisfaction.

Relationship marketing was about "putting the customer in the middle of the business circle," in the words of Dick Lee, principal of St. Paul-based Hi-Yield Marketing. "As part of that early relationship marketing movement, we had untold frustration because we didn't have the technology to support what we were doing," Lee says. "It really wasn't until mid-90s that we had the technology we needed."

CRM in Banks

In the 1990s, computer systems were deployed to support sales and service processes. Sales Force Automation systems quickly evolved from simple contact managers, while Customer Service and Support systems became the backbone of automated call centers. By the mid-1990s, "CRM" became the umbrella term as it became clear that sales and service systems should share information. More recently, Enterprise Marketing Automation (EMA) applications joined the CRM fold, including systems for customer analysis and marketing campaign management. By the late-1990s, the real action was outside the corporate firewall.

Explosive growth in Internet usage spawned a proliferation of e-business applications to manage online customer and partner relationships, often called "e-CRM" and "Partner Relationship Management," respectively. Now, "multi-channel CRM" systems were available to, theoretically, support direct, Internet, and partner channels, while allowing users to use whatever mode of communication they pleased.

C. Concept of CRM :CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success.

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The concept of CRM can be clearly understood from the following diagram:

CRM
Customer Relationship Management

CRM is the combination of Customer, Relationship & Management 1. Know your CUSTOMER, his needs, wants and motives. 2. Appreciate the length, width and depth of the RELATIONSHIP between the customer and your organization. 3. Proper MANAGEMENT of all interactions with the customer.

Know your Customer (KYC):-

Any definition of CRM would be fundamentally wrong if it didn't start with the customer in mind. As with customer service, to truly engage the customer with your organization and products, one will have to exceed the expectations of the customer. How can you do that if you don't know the customer? Well, do you? Do you really know your customer? It's best to build a profile of your customer by doing the slicing and dicing of all available data
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on the customer, a function mostly associated with when people talk about CRM applications. But don't rely on the operation of a computer system alone, however magical the results seem to be. Without actual human interaction with your customers, your organization will miss out on the nuances of knowing your customer. So talk with your customer every chance you can... and then make sure you create more chances to interact. Appreciate the relationship

When talking about the length, width and depth of your customer's relationships, it comes to mind that they are not one-dimensional. The relationship with your client can exist on many levels, not just through the customer service reps, or the web site. You must understand that the customer or prospect can interact with all levels of your organization, and through all kinds of channels. In fact, nowadays the modern customer is often referred to as the Multi-channel customer. If you gain better insight in the relationships of the customer that are outside your organization, you are one step further in knowing the customers mind. And act accordingly. Manage the interactions

The final part of my customer relationship management definition is on the management of the interactions. As you now know the relationship with the customer doesn't only exist on the level of customer support or through order entry (be it online or off). To manage all interactions with the customer, CRM can only be successful if the complete organization is mobilized. In fact, you could say that everyone is part of the customer service department. Often, this means a great paradigm shift for the business, towards true customer centric thinking and acting.
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Thus, CRM is nothing but managing the relationship with the customer.

D. CRM Process:-

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E. Issues relating to CRM:-

Issues pertaining to customer relation & acquisition strategies are some of the major areas of concern in the CRM policy of a company. For a new service company, customer acquisition is more important, but for the established companies it is retention that becomes more important. For the letter segment, the following factors could be identified as the major areas of concern in decreasing order of their importance:
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{1} Retention strategies for potential defectors. {2} Retention strategies for loyal customers. {3} Measurement system for customer value. {4} Implementing retention plans.

F. Customer Satisfaction & CRM:-

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Customer satisfaction is one of the important objectives of CRM. For this the companies find out the needs of their customers and then accordingly try to serve their customers. For serving the customers these companies have customers profile in terms of their education, occupation, income, geographical locations, age, gender, work status and other factors. These together form a customer data-base. On the basis of this data the companies offer their products to different customers according to their needs and preferences. These companies also at times advise the customers while buying products and thus their needs are satisfied in a better way. The above diagram shows the way to ultimate customer satisfaction a method followed by many big companies.

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G. Objective of CRM:-

The idea of CRM is that it helps businesses use technology and human resources to 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 Increase customer revenues

Hence, the main objectives of CRM are as follows Retaining the customers, loyalty development: 1. 2. 3. Defining the most profitable customers. Working according to corporate rules and business processes that Customer activity monitoring (integration with bank system). Cross-sells management: 1. Creation of the single information source for all bank branches, finding associations between customers. 2. Improvement of the internal communications between different departments.
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are different for different customer types.

CRM in Banks

Acquiring the new customers: 1. 2. 3. Creation of the prospects database and its segmentation. Improving the campaigns effectiveness. Using the corporate standards for customer interactions.

Better sales person effectiveness: 1. 2. 3. Integrated customer data in one place. Automatic reports and documents creation. Organizing team-sales.

Management decisions support: 1. 2. 3. Customers migration analyzing. Customer associations analyzing. Customer dynamics forecasting.

H. How CRM works? CRM employs the following steps of database and one-to-one marketing: Identify prospects and customers: One of the ways companies can generate sales leads is by advertising their products or services through advertisements that include a response feature, such as a business reply card or toll-free phone number. The database is built from these responses. The database can be sorted to identify the best prospects, who can then be contacted by mail, phone, or personal call in an attempt to convert them into customers. Differentiate customers:
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Differentiate customers in terms of their requirements and their lifetime value to the company. Lifetime value can be used to decide how much the company can invest to build relationships with a particular customer. The company might decide to invest in the customer to retain him and thus reduce the rate of customer defection (churn) or to turn low-profit customers into more profitable ones by increasing the longevity of the customer relationship and/or by enhancing the growth potential of each customer through cross-selling, up-selling, and increased share of wallet. Interact: Interact with individual customers to improve learning about their individual needs and to build stronger relationships. Customize: Customize products and services and personalize all communications with each individual customer. CRM also incorporates enhanced sales force automation (SFA)

functionality. SFA puts account information directly in the hands of field sales staff, making them responsible for maintaining it and thus helps them to be more productive. Now, as part of CRM, SFA is also focused on cultivating customer relationships and improving customer satisfaction.

I. CRM In Banks:According to Kotler, CRM principally revolves around marketing. It

involves integrating information gathered from all the distribution channels and analyzing the data, with the help of IT, to understand customer
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behavior. The continuous analysis and improvement over a long period of time should result in enhancing customers lifetime value with the firm In the light of the above, customers of a bank can broadly be classified into two categories: Internal Customers External Customers In case of a bank employee, all his colleagues are his internal customers. A banking transaction typically involves more than one or two individuals clearing the same. Unless there is a perfect harmony among the different individuals involved, the customer is put to a great deal of inconvenience. In addition to the pressure to perform and attain set targets, the added tension and frustration caused by an unhappy internal customer is wellexperienced by bankers. External customers are al those with whom a banker has to interact in the course of managing daily business. In addition to the regular customers who have an account with the bank, there are a number of potential customers whose issues need to be addressed. A real life incident is worth recalling here. A contractor had a regular account with a private sector bank while his brother had fixed deposits of a large amount in a nationalized bank. Once the contractor urgently required a demand draft. As he was at a great distance from his bank, and time being a constraint, he approached a nationalized bank. The staff there refused to entertain him on two grounds one, he had after the banking hours and two, and most importantly, he
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was not transacting his normal business through them. When approached, the private sector bank obliged their customer well passed the normal time with the draft. The next day the nationalized bank was in for a shock when their customer walked in and closed his deposits shifted his account to the bank where his brother had an account. A heavy price for appalling CRM practices! Some other external customers to a bank are other bankers. While banks inter alias compete with one another for business, they also need each others support from time to time. Having understood the role of internal & external customers we need to understand the dynamics of a relationship. Retail banks customers have high levels of expectations with a plethora of alternatives, routinely demand reduction in user charges, expect rapid response to request, and look forward to customized and personalized products and services. Unless retail banks understand the range of factors that impact customerrelationships, they may fail to judge the value proposition represented by individual customers and consequently miss out on business opportunities. The art of managing the banker-customer relationship is the hallmark of successful retail managers. There is an urgent need to clearly understand the potential long-term value of present and prospective customers focus on profitability and not on revenue generation.

J. CRM Objectives in Banking Sector:-

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
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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. It doesn't happen by simply buying software and installing it.

For CRM to be truly effective an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.

Next, 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. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points.

This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. K. CRM Tools for Banking

CRM tools can be broadly classified into Operational tools and Analytical tools:
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CRM Tools

Operational CRM (Provides required information)

Analytical CRM (Traces activities & makes information more sensible)

Operational CRM provides the software support for business that requires former contact. It is aimed at providing information to employees & documenting customer interactions across channels such as personal contacts, telephonic, electronic & wireless. For Example: if an important customer dials to the banks call enter the Operational CRM can sort the call centre of the customers account status and other details. Analytical CRM helps banks make sense of the information collected. It is aimed at utilizing the customers potential to the maximum. It helps tracking the activities of the customer on a real-time basis. For example, if there is a regular monthly debit of a certain amount in the customers account by means of cheques in favor of other bank, it is an indication that the customer is having a loan with that bank. Analytical CRM can trace this activity and the banker can offer him a loan with better benefits and in the process benefit himself.

L. Customer Channels
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M. Analysis of the Current Banking Scenario- The Role Ahead 1. Most of the banks have not computerized in the recent past a positive development indeed which helps smoothen the banking operations. But everything is not all that green. Have all data been computerized? It is understood that a cut-off period was kept for date entry into the computers so that all information after this date were entered into the computer while all information prior to this date were left out. Well, how does this affect the customers? There are several senior citizens who reside away from their houses, either in India or abroad. Many of them would have saved for their old age by investing in fixed deposit (with automatic renewal, which was in vogue in the late 1970s and 1980s). There was this particular case of a long standing fixed account in a nationalized bank of one grandparent (who is
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currently residing with her children) which it so happened, was not renewed for several years. Recently, she approached the bank for renewing it. The initial response form the bank was that there was no such account. Thankfully because of the kind co-operation of the staff and existence of the document, the money could be retrieved after a long search of the old records. The account had not got an entry into the computer! 2. Another more complaint is that unlike earlier times, bank clerks do not take the effort to update passbooks. Often the bank clerks ask the customers to go for a computer print-out from either the bank or from an ATM centre. The main aim of passbook is an easy check on the account status. This being the case, computer print-outs do not serve the purpose as they are too cumbersome to be maintained and do not aid in periodic reference as and when required. (Not all banks have introduced the system of computerized passbook.) When does this become a problem? Recently, one happened to notice that the cheques deposited by her at a bank for collection was not credited to her account! The cheque, acclaim settlement from an insurance company had been deposited several months back. In the absence of regular updating, it went unnoticed for several months. As it was for a big amount, it was noticed at least a few months later. What of the several cheques of smaller amounts, which many of us deposit for collection, not always in a regular fashion. The good old passbook is indeed missed greatly. Nothing can beat it for ease of use, mobility and updating as far as the consumer is concerned. 3. Has computerization in any way affected the bank passbook? To answer this question just try to recall the number of the passbook you have obtained recently from any one bank. Forget about the elderly. Even the youngsters may face difficulty here. Just imagine if you have accounts in multiple banks! There was this case of a customer losing both the passbook
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and cheque book of one of the leading banks. As he was not in town, he immediately called up the manager of the particular bank and made a request for stop payment saying the letter for the same would be sent immediately. But the name and address were not sufficient for the purpose! Neither was the old three digit number, which he remembered enough. The manager made a categorical statement that it could be done only if the new computer number (as given in the passbook) was given. Well, the poor customer didnt know it, so the question of recalling just didnt arise. Earlier most of the transactions being across the counter, the customer had to write down the numbers in the respective forms for each transaction which helped him in memorizing the number. With credit/debit cards and cheque books doing most of the work, now you dont even need to look at the passbook number. Only if humans had the brains of a computer! 4. Internet is fast becoming the major medium of information transfer. It is indeed a valuable tool for banks to enhance their value. Most of the new services provided by banks are (perceived to be) too complex for the ordinary user to understand, access and operate. It is widely felt that the banking services must be simplified so that more people can avail it easily. 5. Citibank, which pioneered the use of credit cards in India, launched the countys first e-card for its customers wanting to make purchases via the Internet in the year 2000. The Citibank e-card comes without any physical plastic and can be used only on the Internet. Several other banks took the cue and moved on to create virtual cards. This is indeed a boon for the Indian customers as they can make purchases sitting at their desks. You already have a secret PIN number for the normal card and you need to remember another secret code for the e-card. No way are customers going

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to remember two secret codes. Encryption and the need for it will drive people crazy if you dont pay attention to consumers need for convenience. 6. This is again the case if you want to use the ATM facility of more than one bank. Each bank allots a unique PIN number to each of its employees who wants to avail a debit or credit card from the bank. 7. There was this particular customer who on his way back home wanted to deposit some money into his newly opened account at one of the lending private sector bank. He approached the particular counter from where they enquired about the payment mode and said cash payment had to be made separately in the cover provided at entrance. The poor fellow, after a little of walking around located the cover but was unable to make the payment then, since without his glasses he couldnt make the entries correctly. Gone are those lovely days all that you have to do was walk in with the money and put your signatures at the places specified by the clerk in the form handed over to you by the bank clerk. Then there are the more common problems like the bank timings (though many of the recent have gone for customer friendly timings), poor customer request handling and the customers increasing suspicion of hidden charges for the extra benefits provided by the banks. Was it Better Earlier? And is there Hope? The success of the banks lies in exploiting the new technologies: attempt to better understand customers expectations and problems and then delivering value in a superior fashion in tune with their expectation. An analysis of the problems is not complete without a look at the sacrifices made by the customer in the process availing the service. Priority Areas
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The customers needs are straight and specific. The challenge for the bank manager is to foresee the future. New needs emerge based on changing tastes and preferences, which may or may not be due to the changes in environment or technology. Often, especially in the Indian environment, the customer is forced to change despite his reluctance to accept change. The task of bank marketers is to understand the customer and focus on what is important to him. Effective Segmentation In order to focus, bank should segment the market based on customer priorities over a period of time. A large chunk of the Indian customers still like latter category. Effective segmentation helps in addressing the different needs of each customer group more efficiently. The profitable customers must be identified and catered to. Creating value Banks should realize that customers are their prime assets. It is essential that banks understand and accept the fact that the market place is made up of individual customers. The mantra should be to create and deliver value in such a way that it always stays one step ahead of its customers. Another factor, which often escapes the notice of all bank marketers, is the type and degree of sacrifices made by the customer in availing the service. Like in the case of multiple credit cards where the customer has to remember the secret code of each or the difficulties he has to undergo to obtain a bank loan.

N. Will CRM Benefit the Banks?

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The primary purpose of organizing a company based on CRM is to respond to customer driven environment in order to develop the overall business and thereby enhance the return on investment for shareholders. The financial performance ultimately of an organization depends upon Customer Value (CV). The main thrust of CRM is to: Develop new product business Increase added value Gain market dealership Spread risk and vulnerability Maintain existing business Keep competition in check Address operational problems Identify the business from which the bank would like to exist The ability to implement a customer-centric approach focused on optimizing the lifetime value of the customer The ability to concentrate on financial budgeting, cost control, and risk management.

One way to assess the need for a CRM project is to count the channels the customer can use to access the company. The more channels one have, greater is the need for the type of single centralized customer view a CRM system can provide.
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O. Need for CRM Banking industry has undergone tremendous changes during the past decade, during which consolidation and reform became inevitable. Banks have realized the significance of customer service not only for business expansion but also for their very survival. They have woken up to the fact that they need to understand and manage their customers better. Falling interest rate are making corporate lending a low revenue business, prompting banks to look for additional non-interest related business. Thus, consolidation in the market has increased the need for CRM which ensures banks to build and retain close relationship with their customer, especially the most profitable ones. This is aimed not only to prevent the customer from taking their business elsewhere but also to ensure that they are offered the product and services that a most appropriate and most likely to result in new revenue for the bank. CRM helps categorize and segment customers and align products that best suit them. P. CRM Strategy in Banks The bank has to decide on the strategy or pathway to go ahead with CRM. Here two major issues must be addressed: The need to approach CRM in a strategic and systematic manner and the need to understand what constitutes CV. For this purpose a strategic framework has been developed to help clarify CRM functions to fit within the organization and optimize its use as a strategic management approach. This framework is comprised of the following inter-related as functional processes. They are: Strategic development process
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Value creation process Multi-channel integration process Information management process Performance assessment process

These processes though have universal application, need to be formalized by applying framework, depending on each organizations unique framework.

Q. Goals Requiring CRM Solution

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Customer Identification

Cross Selling/ Up Selling

Customer Satisfaction & Delight

CRM Solutions

Customer Acquisition

Customer Retention

The primary redundant goals of banks require CRM solution are:

Customer Identification: It refers to acquiring the entire customer-centric data such as knowledge of customers current demographic details, related products and their holding pattern with the bank. This should allow the banks to generate a single, comprehensive view of everyone of its customers. With this base, the banks must identify prime customers who require to be specially treated under CRM. Cross Selling or Up Selling: Cross selling and up selling are huge untapped opportunity for banks. CRM solution should adopt an integrated approach to customer needs, which not only would be customer loyalty and business, but also enable
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banks to offer their customers the additional services they might really want. For example, a minor customer may be offered an educational loan; a Savings Bank customer may be offered a credit card or a housing loan, a busy business man may be offered Internet banking etc. Customer Acquisition: CRM is aimed at optimizing processes and functions related to the customer. All operations can be optimized and systemized to enhance efficiency effectiveness, on a continuous basis. This continuous learning process would help banks to bring out better product that target potential as well as existing customers. The operation can be aimed at getting the right customers and then retaining them by extending special treatment under CRM environment.

Customer Retention: Customer retention is the most important focus of CRM. Bank should employ CRM function that consolidates information from all customer interactions, whether it is personal contact or inquiries to the call center or the Internet. It should be kept in mind that it is many times costlier to obtain a new customer than to retain an existing one. Every banking representative should have an ability to access a 360-degree view of the customer, in time, to enhance the competitive advantage and customer retention. Customer Satisfaction and Delight:

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When a customer receives a higher level of service than what he expects, he is satisfied. On the contrary, if he receives the level of service lower than his expectations, he is dissatisfied. A dissatisfied customer tells at least 10 other people about what went wrong with the bank, which can trigger an exodus of customers from the bank. Else, will definitely stem the flow of new customers into the bank. Hence, the banker would make all efforts to improve services on a continuous basis. ones, beyond the level of satisfaction. Banks operate in a dynamic To achieve this, banks must market and it is important to be proactive to delight a customer, at the prime continuously innovate new product and features using technology as a tool. R. Key Problems Requiring CRM Solution Lack of Software System Multiple Product Databases Multiplicity of Contact Ineffective Tracking Mechanism Absence of Exclusivity How Customer Responds to Service Failure

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Service Failure Dissatisfaction / Negative Emotions Complaint Action

Complain to provider Negative Word of Mouth

No complaint action Third Party Action Stay

Exist / Switch

Exist / Switch

Stay

CRM System to Bridge the GAP An effective CRM solution should provide the following: Integrate communications from various channels to deliver a unified customer view across the bank. Provide collaboration tools for the employees using e-mail, messaging, chat etc.
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Provide for customer support activities such as Contract, management, Accounts management, Opportunity management, Activity and Calendar management, Campaign management, Product management etc.

S. Benefits of Relationship Marketing Both parties in the customer / Bank relationship can benefit from customer retention. That is, it is not only in the best interest of the bank to build & maintain a loyal customer base, but customers themselves also benefit from long-term association. Small Benefits for Customers: Assuming they have a choice, customer will remain loyal to a firm when they receive greater value relative to what they expect from competing banks. Perceived value is the customers overall assessment of the utility of a product based on perceptions of what is received & what is given. Value represents a trade-off for the consumer between the give and the get components. Consumers are more likely to stay in a relationship when the gets (quality, satisfaction, specific benefits) exceed the gives (monetary & non-monetary costs). When bank can consistently deliver value from the customers point of view, clearly the customer benefits & has an incentive to stay in the relationship. Beyond the specific inherent benefits of receiving service value, customers also benefit in other ways from long-term associations with a bank. Sometimes it is these relationship benefits that keep customers loyal to a firm more than the attributes of the core service.
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Small Benefits to Bank: The benefits to a bank of maintaining & developing a loyal customer base are numerous. Increasing Purchases: As consumers get to know a firm and are satisfied with the quality of its services relative to that of its competitors, they will tend to give more to their business to the firm. Lower Costs: There are many start up costs associated with attracting new customers. They include advertising & other promotion costs, operating costs of setting up accounts & systems, and time costs of getting to know the customer, sometimes short term. Even ongoing relationship maintenance costs are likely to drop over time. For, example, early in a relationship a customer is likely to have questions and to encounter problems as he or she learns to use the service. Once learning has taken place the customer will have fewer problems & questions (assuming the quality of service is maintained at a high level), the service provider will incur fewer costs in servicing the customer. T. A Technological Perspective to CRM: After all, good customer relationships are at the heart business success. There are many technological components to CRM, but the thinking about CRM in primarily technological terms is a mistake. The better way to think about CRM is a process that will help bring together lots of pieces of information about customers, sales marketing effectiveness, and responsiveness and market trends. It doesnt happen by simple buying software and installing it. For CRM to be truly effective an organization must first decide what kind of customer information it is looking for and what it intends to do with that information.
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CRM in Banks

Next, 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. From a technological perspective, it involves capturing customer data from across the organization and consolidated all internally and externally acquired customer-related data in a central database. This data is then analyzed and the results of the analysis are distributed via customer touch points like mobile sales force, inbound and outbound call centers, websites, point-of-sale, e-mail, etc., for use while dealing with customers at these points. The Internet has revolutionized the way business is done and has virtually taken the enterprise information system within the reach of the customer. It can be accessed through call centers, Internet and increasingly through mobile devices. One bank, for instance, may interact with customers in a myriad of different ways including mail campaigns, websites, bricks-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM Systems linkup each of these points. This collected data flows between operational systems and analytical systems that can help sort through these records for patterns. Bank analysts can then comp through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her. Until recently, most CRM software has focused in simplifying the organization and management of customer information. Such software, called Operational CRM, has focused on creating a customer database that presents a consistent picture of a customers relationship with the bank, and
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providing that information in specific application such as sales force automation and customer service in which the company touches the customer. However, the sheer volume of customer information and increasingly complex interaction with customer has propelled data mining to the forefront of making customer relationship profitable. Data mining is a process that makes use of a wide variety of data analysis and modeling techniques to discover unknown patterns & relationships in the data that may be used for making near-accurate predictions. It can help the bank to select who the right customers are to focus on offer the right product at the right time to existing customer and identify good customer who are about to leave the bank. The outcome of all this is increased revenue because of greatly improved ability to respond to each individual contact in the best way and reduced costs due to proper allocation of resources. These CRM applications that use data mining techniques are called Analytical CRM. U. Execution of CRM Activities:The following are some of the essential requirements for implementing CRM successfully: CRM Cell:The Bankers must establish a CRM Cell to take care of all CRM-related activities. It can serve as an Advisor, Coordinator and Controller of CRM activities of all bank branches. Banks may also select, say around 100, prime, profitable and exclusive customers, whose requirements will be directly dealt with by the cell. This Cell has to be adequately staffed with exceptional track records for this highly specialists function.
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Customer Metrics :Bankers have great concern over their profits, which in turn may hamper their enthusiasm for CRM. Even globally, the spending growth rate on CRM has start declining since 2001. quantify their return on investment. Whenever a new product is introduced or a new facility or technology is offered to customers, bankers do undertake a cost-benefit analysis. For example, when bankers invest in ATMs, their expectation is that it would reduce the branch cost, as the customer would use them instead of a branch. However, studies revealed the fact that ATMs have only a marginal impact on cost, but at the same time there is a significant increase in customer satisfaction which ultimately leads to customer loyalty and customer retention. Surveys:It is also important to undertake surveys at periodical intervals to measure the efficiency of CRM implementation. This enables banks to corrective actions, wherever necessary and adapts themselves to the ever-changing demands of the customer. V. E-CRM in Banks:E-CRM is the integration of the Customer Relationship with e-business application. The CRM enables banks to have new opportunities to learn customer needs add values to services, gain new economies and reach the broader customer base. This needs to categorize or segment the customers into different clusters from the information collected on the customers. Bankers are looking for a way to

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With IT in place, we have inexpensive but powerful computers which work at very high speed and low-cost of storing huge data and will make e-CRM more productive. Attitudes and opinions are extremely important in relation to e-CRM. The Web offers opportunities to market products through multimedia presentation, capabilities, such as animation, audio and video. than verbal & written communication stimuli. CRM helps companies improve the profitability of the interaction with the customers while at the same time making the interactions appear friendlier through customization. To succeed with CRM, companies need to match their products and campaigns to prospects and customers, in other words to intelligently manage the customer life cycle. CRM is a topic on which there is a plethora of literature according to Romano, but, no overarching framework to guide and focus IS research in this area. The integration of the five research areas, viz; technology, human factors, markets business models and knowledge and management, provide a novel approach to examine the emerging area to CRM. Finally, the notions, e-CRM processes and outcomes being effected by the five research areas provides a direction for theory, development and empirical study in both the lab and field that yield meaningful and useful results with both theoretical and practical implication. W. Implementation & Involvement of CRM in Indian Banks:Such complex multimedia stimuli are perceived through the senses differently

CRM covers a wide range of products and interfaces (Front office customer touch points to Bank office integration and everything on between) Marketing automation, sales for automation, call centre for customer
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service, data warehousing and data mining which focus on decision making, etc. One of the determinants of the success of the relationship marketing strategies of a firm is how the customers perceive the resulting service quality. In India, with the onset of financial deregulation, banks are functioning increasingly under competitive pressures. In this era, in order to prosper, it will be imperative for banks to focus on developing long-term relationships with their customers. The forces of deregulation, globalization and advancing technology have greatly increased the competitive pressures in the banking industry. The Indian banking industry too is going through turbulent times. Since the financial reforms started, banks too have been going through turbulent times. Since the financial reform started, banks have been given a great degree of freedom is determining their rate structure for deposits and advances, as well as their product range. The freedom of choice which bank customers did not have earlier because of standardized products and regimented interest rates has now been given to the customers. Banks are functioning increasingly under competitive pressures emanating form within the banking system, from non-banking institutions as well as from the domestic and international capital markets (Subramanian et al., 1997). Thus, in this era of increased competition, in order to prosper, it will be imperative for banks to focus on developing long-term relationship with their customers. The focus of banks should be to shift their orientation from transaction marketing to the cultivation of relationship marketing. Importance of Customer data in CRM:-

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CRM software is integrated with bank operational system. The customer contact, billing and financial data together with account transactions history can be imported from the bank system. For each customer its monthly profitability is automatically calculated and profitability report can be created. Basing on the customer profitability customers are organized into groups. Terrasoft CRM enables to track the competitors activity. For each customer its current accounts in other banks are registered. Besides, you can register the competitive bank services provided to your customer. CRM software enables to automate the part of the bank document flow, including deposit and credit contracts, and invoices and payments, linked to them. The system provides a single source for document templates: contracts, acts, applications. Terrasoft CRM helps to evaluate the customer financial state in order to take the right decision while credit providing. In the system you can register different associations of your customer with other persons and companies. Basing on these associations the special report is created to analyze the financial risks. Customer Service You Can Bank On Counting On CRM for Business Information Management: Customer relationship management (CRM) has become a top priority for any financial institution that seeks to gain a competitive edge. However, with the advent of CRM technologies that do a good job of capturing customer data, problems with accessing past and up-to-date information were introduced. While trying to meet increased expectations and maximize

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profitability, CRM solutions do not fully resolve these costly, timeconsuming obstacles that arise when communicating with customers. Improving Customer Service Levels: At your service, not mine We sometimes forget that CRM implementations are there to improve customer service levels, and not only for gaining competitive advantage. After it is in place, banks do not always check to see if the investment has achieved its goal. Analyzing Web-site usage and customer transactions via the Web provides essential input in determining whether the CRM system is being used as it was intended. It is no less important to define adequate levels of service for customers. Service levels should anticipate growth or change, and should be in accordance with bank priorities.

X. Solving CRM Challenges with Business Information Management Solutions: Customer relationship management systems are vital to the success of banks in the 21st century; however, we must not lose our heads in the turmoil surrounding the huge investments required to implement these systems. Automated call centers are essential, and business-information management bundled with service-level management and businessintegrated scheduling play important roles in assuring they meet the high standards expected by customers. Providing access to all customer information, regardless of its source, regardless of its format, and in a timely fashion are vital in reaching the ultimate goal of less rings until the phone is answered, less time spent on each call and most importantly, improved customer service.
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Case Study: 1. Garanti Bank A Model Design for CRM at Garanti Bank

Garanti Bank, one of the leading banks in Turkey was looking at new ways to enhance its customer potential and service quality. Electronic means of banking have proved a success in acquiring new customer groups until the end of 2001. After then, a strategic decision was made to re-engineer their core business process in order to enhance the banks performance by developing strategic lines.

Strategic lines were given in order to meet the needs of large Turkish and multinational corporate customers, to expand commercial banking business, to focus expansion in retail banking and small business banking, to use different delivery channels while growing, and to enhance operating efficiency though investments in technology and human resources.

To support this strategy Garanti Bank has implemented a number of projects since 1992 regarding branch organization, processes and information systems. The administration burden in the branches has been greatly reduced and centralized as much as possible in order to leave a larger room to marketing and sales. The BPR projects have been followed by rationalizing and modernizing the operational systems and subsequently by the introduction of innovative channels: internet banking, call center and self-servicing. In parallel, usage of technology for internal communication: intranet, e-mail, workflow and management reporting have become widespread.
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CRM in Banks

CRM Development

To be prepared to the changing economic conditions and, in particular, to a rapidly decreasing inflation rate scenario Garanti Bank has started timely to focus on developing a customer relationship management (CRM) system. The total number of customers is presently around two millions, but an increase to roughly three millions is foreseen as merging with Osmanli Bank and Koferzbank are achieved and the present growth targets are reached.

The importance for the bank of managing the relationships with their customers has been the drive of the joint projects that have been developed with IBM in the last three years. During the projects a number of crucial technological and architecture choices have been made to implement the entire process.

Realizing the importance of customer information availability the first of these projects has focused on the problem of routinely collecting and cleansing data. The project has been undertaken by the bank with the spirit that has characterized the whole CRM development.

The project has promoted a massive involvement of the branches, namely of the portfolio managers and campaigns have been launched for popularizing among branch staff the importance of gathering and maintaining reliable customer data.

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Another set of methods have been tested for customer not included in portfolios (pool customers), such as mailing or distributing questionnaires in the branches or using automatic teller machines (ATM) and the call center.

Methods for data checking and testing have been developed to be routinely employed by the bank's staff. Results obtained are very good: for portfolio customers data available are respectively 98% for the commercial ones and 85% for the retail ones. For pool customers availability goes down to 65%: this is a well-known phenomenon due to the loose relationship with the latter customers. Data Warehouse and Data Mining

The Data warehouse is the core of any decision support system and hence of the CRM. In implementing its Data Warehouse Garanti Bank has selected an incremental approach, where the development of information systems is integrated with the business strategy.

Instead of developing a complete design of a corporate Data Warehouse before implementing it, the bank has decided to develop a portion of the Data Warehouse to be used for customer relationship management and for the production of accurate and consistent management reports. Here we are not concerned with the latter goal, but are concentrating on the former.

The Data Warehouse has been designed according to the IBM BDW (Banking Data Warehouse) model, which has been developed as a consequence of the collaboration between IBM and many banking customers. The model is currently being used by 400 banks worldwide.
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CRM in Banks

The Garanti Bank Data Warehouse is regularly populated both from operational systems and from intermediate sources obtained by partial preprocessing of the same raw data.

Figure 1. The process of Relational Marketing

It includes customers' demographic data, product ownership data and transaction data or, more generally product usage data as well as risk and profitability data. Most data are monthly averages and today's historical depth is 36 months starting from 1/1/1999 to 12/31/2001. As new data are produced they are placed temporarily in an intermediate, from which they are preprocessed and transferred to the warehouse.

The importance of the Data Warehouse stems from the analysis of Figure 1. As a result of strategic decisions customer analysis is carried out by using data continuously updated as well the analytical methods and tools to be described later on.
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The CRM group analyzes results obtained and designs action plans, such as campaigns, promotions, special marketing initiatives, etc. Plans developed are then implemented by means of the several channels used by the bank to reach customers. Evaluation or results completes the cycle. The results become an integral part of the description of the bank-customer relationship in the warehouse.

The learning cycle is thus complete and results obtained can be reused in future analyses and in future marketing plans. It is easy to understand that the Data Warehouse cannot actually be built 'once for all' but is a kind of living structure continuously enriched and updated as the Relational Marketing activity developes. OLAP (On Line Application Programming) analyses are developed by means of Business Object in its web version. CRM analysts use this tool to issue complex SQL queries on the Data Warehouse or on the Analytical Datamart and carry out mono and bivariate statistics on the whole customers' population or on selected groups. Figure 2 shows general structure of Relational Marketing Activity.

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Dataining analyses are not carried out directly on the Data Warehouse, but on the Analytical Datamart by means of the software package IBM Intelligent Miner [Cabena et.al. 1999], using as a computing and data server the same mainframe where the Data Warehouse resides. Garanti Bank believes these tools and methodologies are a powerful competitive weapon and is investing heavily in the human resources needed to develop these analyses.

The Analytical Datamart is derived from the Data Warehouse through the following steps: 1)Raw data processing: data selection, data extraction, and data verification and rectification 2) Data modelling and variable preprocessing: variable selection, new variable creation, variable statistics, variable discretization.

The

above processing, based on traditional data analysis, is strictly

dependent on the investigated process; new variable creation, for instance, is intended to aggregate information contained in the raw data into more expressive variables. A simple example is the number of credit transaction on current account, that contains much of the information contained in the individual transactions, but is easier to analyze and represent. Variable discretization, based on the distribution of the original variables, is intended to generate categorical variables that better express the physical reality of the problem under investigation.

The Analytical Datamart is customer centric and contains the following data:

1.

Demographic (age, sex, cultural level, marital status, etc.)

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2. 3. 4. 5.

Ownership of bank's product/services Product/services usage (balance, transactions, etc.) Global variables: profit, cost, risk, assets, liabilities Relationship with the bank: segment, portfolio, etc.

Figure 2. The marketing campaign process and the software supporting it.

Marketing Campaigns

After analyzing strategic and analytical CRM we concentrate here

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on the equally important operational aspects. Marketing Campaigns is the first method that Garanti Bank has used to test the above described analyses and techniques. The overall campaign process is reported in Figure 3, that shows that propensity determination and targeting are the first step of the whole activity.

A number of experimental campaigns have been designed and carried out to test the soundness of the approach before attempting a large scale roll-out. Experimental campaigns have addressed about 900 customers selected within six branch offices in Istanbul. An education process has been started by meeting sales forces in the branch offices, by distribution of an explanation booklet and by publishing on the Intranet a note explaining the whole process.

System interfaces have been modified in order to track the customers under promotion, as well as to enable salespeople in the branch office to complete the sales on promoted customers as well as to record the fact that the sale was a consequence of the promotion.

The bank has so far used for promotion two channels: the salespeople in the branches and the call center. Each channel was used in four different campaigns.

The activity of the call center was supported by the Goldmine software package, while the overall campaign management was achieved through Valex. This product used customer data stored in the Data Warehouse and at the same time manages itself a smaller local database, where campaign data are temporarily stored (list of customers, date of promotion, responses, etc.). These data must be
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copied manually into the Data Warehouse when the campaign has been completed.

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Results obtained by extensive usage of customer data to develop and apply Relational Marketing have convinced the Garanti Bank to proceed along the line undertaken. As lists of customers eligible for four very important banking product/services are available, as above described, the following actions are now being deployed:

1. Extension of promotions to a larger customer population by having sales people in the branches contacting progressively 15,000 customers. 2. Targeted campaigns through Internet and the call center for customers actively using one or both of these innovative channels for their banking operations.

The same approach is now being extended to small and medium businesses and to commercial customers. Moreover the analytical and strategic CRM cycle is being completed by developing an application analyzing customers' attrition and deploying strategies to reduce it.

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2.Union Bank of India Since its inauguration by Mahatma Gandhi in 1919, the Union Bank of India has grown to become one of the countrys largest public sector financial institutions. With annual revenue of more than INR 6,000 crore (approximately US$1.3 billion), the bank is more than fulfilling Gandhis directive that India should have the ability to carry on a big bank, to manage efficiently crores of rupees in the course of our national activities.

The Union Bank of India now operates more than 2,000 branches across India, administered by approximately 80 offices, including 43 regional offices.

Union Banks vision is to be the first choice for customers by building beneficial and lasting relationships with customers through continuous improvement, and in recent years the pursuit of this vision has seen it embrace state-of-the-art banking technology, including online banking and payment gateway solutions. As a result, the bank has earned a reputation for being technology-savvy and customer service-focused. In addition to regular banking facilities of Union Bank of India, today customer can also avail variety of other services like cash management service, insurance, mutual funds, Demat from the Bank. Union Bank of India is a Public Sector Unit Share Capital held by the Government with 60.85% of India.

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Implementation of CRM in Union Bank of India

With the onset of fierce competition in banking, where walk-in business is no more reliable, consistent expansion of the client-base and through this, the business profile of the Bank, is possible only by building up a lasting relationship with the customers. This task is made easy when Union Bank of India were able to create a greater emotional bond between the customers and the bank. The idea of the Customer Relationship Management (CRM) / Customer Care Official (CCO) is, therefore, to ensure fast expansion of our customer-base through the low-cost deposit-track, by effectively marketing SB/CD accounts, along with tech-products, on a scale of operation which is consistent as well as larger, focusing on the younger generation and delighting each customer the Bank serve, through a process of bonded relationship building. Earlier Bank was not specialized in CRM. Front office & back office were not trained by the CRM department unlike today. Front officers are now trained to deal effectively with customers. Today customers are knowledgeable, so the staff or the employees of the bank have to keep up to date knowledge so as to fulfill the needs of the customers. If at all any customer is angry & faces inconvenience caused by the banks and has some problem, the manager of the branch shall call them personally on the spot and manages to solve their difficulty as soon as possible so as to maintain good relationship with them.

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Strategies of CRM are made by the Head Office (HO).

The CRM of

each branch has to submit a report to HO every month about the progress of CRM strategies. So accordingly the HO will alter the strategy to improve. In banks staffs are restricted to one particular cabin / area itself, but in Union Bank of India each and every are knowledgeable about the facilities and work. They are specially trained for this purpose, unlike other banks. Now a days due to this particular reason new customers are approaching the Bank. This makes the Union Bank of India different from other banks. To the existing account-holders everyday. To cross-sell at least 1 additional tech-product such as RTGS, NEFT, e-banking etc. To new customers everyday. To retain existing customers by watching withdrawals/closure and personally attending their complaints, if any. To offer the much-needed comfort-level to the customers by providing the human touch & warmth in dealings and ensure their delight. Re-activate the dormant accounts on a regular basis and in any case, not less than 7 accounts, by personally meeting and explaining our tech-edge as well as product-advantages. In short, a CRM/CCO has to customize extensively on the younger generation, with value-added as well as technology-related products.

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Incentive Scheme for CRMs in Union Bank of India The concept of CRM has been introduced in Union Bank of India since August 2006 at the instance of the Worthy Chairman and Managing Director in order to give better and efficient customer service. Subsequently in order to assess the ability of CRMs in raising their scales of performance in a competitive situation, a campaign/Incentive scheme has been introduced by the Top Management dated 26.10.2006, initially for one month which was subsequently made operational till March 2007. The purpose of the campaign is to create a reservoir a good performance, recognize the bank and reward. This being a motivated initiative of Corporate Management, the success therefore depends on the involvement of the bank members. After introducing CRM in the bank it was noted that earlier the marketing efforts are not being geared up substantially. The involvement of CRMs is not upto the expected level. Even all the CRMs are not submitting their scoring point report. This shows a scant attitude on the staffs part towards the campaign launched by Top Management. concern over this. The Corporate Office has expressed a deep

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Campaign for selling banks products by customer relationship managers commencing from 1-11-2006 30-11-2006. Identifying Top performers for rewarding them and giving focused training in Marketing skills / HR in exotic reset identified by the Top Management. Enhancing growth in the low cost Deposit of the bank and selling / cross selling of e-products to the extent of possible. 1. The CRMs place a crucial role in creating strong bonds of lasting relationship with the customers by exhibiting unique qualities like understanding the needs of the customers better and reacting by rendering quick service. In the process, they are expected to mark our low cost deposits, international debit cards and e-products. The key responsibility areas and the measurable for performance are well defined. 2. In this context the Top managements desires that bank should create an excellent cadre of CRMs with unique identity for themselves. Also it is desired that a huge reservoir of outstanding performers amongst the CRMs should be identified at the earliest and be suitably rewarded for their contribution to the business growth. 3. In order to assess the ability of CRMs in raising their scales of performance in a competitive situation, it is proposed to begin with month long campaign commencing from 1-11-2006 and ending on 30.11.2006, wherein a bench mark level is specified to be achieved by each of them. CRMs qualifying by scoring the specified points will be rewarded suitably. A part from this, 2 Top performers from each

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region at the end of the campaign period will be selected and given specialized training. 4. Depending on the success of this maiden campaign being launched during the month of November 2006. It is also proposed to organize similar campaign throughout the financial year. CRMs successful in each of the campaign months will be identified and some of the Top performers at all India level will be sent for Overseas Training after the close of the campaign for the month of 2007. To conclude with the topic the CRM/CCO is holistic concept that envisages a long term warm relationship between the Bank and its customers. By enduring such long-standing relationship, he has to keep increasing regularly the foot-prints of the customer in the branchpremises.

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References

BIBLIOGRAPHY:

(BOOK NAME)

(AUTHOR)

CRM Emerging Concepts, Tools and Application Sheth

Jagdish

N.

Atul Parvatiyar G Shainesh

Banking & Financial Services in India

Dr. Renu Sobti

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WEBLIOGRAPHY:

www.yahoo.com www.google.com www.crm2day.com www.unionbankofindia.co.in

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