CRM Practices in new generation Private Banks: A Case of ICICI Bank

CRM IN NEW GENERATION PRIVATE BANKS: A CASE OF ICICI BANK

Introduction

CRM is an acronym for Customer Relationship Management. Its a set of strategies, processes, metrics, organizational culture and technology solutions that enhance an organization's ability to see the differences in its present & prospective customers, track new opportunities to better serve customers and act, instantly and profitably, on those differences and opportunities. Recently CRM has taken a centre stage in the business world with businesses concentrating on saving money and increasing profits by redefining internal processes and procedures. It costs a company dramatically less to retain and grow an existing client, than it does to court new ones. The aim of CRM is to optimize the use of technology and human resources. CRM services consist of the following major segments: Consulting services Implementation services CRM Outsourcing services

CRM AT ICICI BANK

Emphasizing on the importance of CRM one of the ICICI employees said, With the overall improvement in the ETL process made possible by PowerCenter, we benefited from greater data immediacy for business users and more reliable information, which resulted in quicker analysis and timely reporting. Gurnam Saini, Assistant General Manager, ICICI Bank CRM at ICICI Bank involves increased communication between the bank and its present and prospective customers. Its philosophy focuses on each and every customers satisfaction. CRM facilitated coordination of multiple business functions & multiple channel of communication with the customers to carry out customer management more efficiently. It also automated the process flow tracking in the product sales process and helped generate customized reports and promote cross-selling.

IMPLEMENTING CRM AT ICICI BANK

The key to implementing CRM was in understanding organization and customers in a better way. There are five interrelated areas that were taken care of before implementing CRM:

- Business Focus - Organizational Structure

- Business Metrics
- Marketing Focus and Technology

Business Focus:
There are various components of CRM like customer information, sales, marketing trends and marketing efficacy that acted in tandem to improve relationship between ICICI and its consumers. ICICI captured customer data and analyzed them while dealing with customers at these very touch points. A CRM solution from Siebel was implemented for the automation of customer handling in all key retail products of the Group. The solution allows customer service agents to track all customer complaints and requests. It also allows target setting and centralized tracking of turnaround times for request fulfillment. The solution went live in phases during fiscal 2002. The Bank has also undertaken a retail data warehouse initiative to achieve customer integration at the back-office. This central view of the total customer relationship is being used extensively for identifying opportunities to cross-sell new products and services to the existing customer base.

 Technology Focus:
ICICI Bank continues to leverage ICT2 as a strategic tool for its business operations to gain competitive advantage. Its technology strategy emphasizes enhanced level of customer services through 24x7 availability, multi-channel banking and straight through processing, and cost efficiency through optimal use of electronic channels, wider and focused market reach and opportunities for cross-selling. The Technology Management Group (TMG) is the focal point for the ICICI Groups technology strategy and Group-wide technology initiatives. This group reports directly to the Managing Director & CEO. A key to ICICIs success has been its ability to harness business information to CRM initiatives that have fueled growth and helped attract more than 30 million customers. The foundation for ICICI Banks wide-ranging CRM programs is a Sybase IQ-based data warehouse. Developers had used a combination of PL/SQL and BTEQ scripting, a proprietary technology specific to the data warehouse, for data extraction, transformation, and loading (ETL). With its growing customer base, IT administrators recognized that the bank needed a more powerful, sophisticated data integration system to help ensure the warehouse lived up to its potential as an analytic CRM engine that delivered tangible bottom-line results. To step up to the next level of data integration, ICICI Bank officials agreed with a recommendation from Teradatas professional services division, which provided systems integration support for the data warehouse, to implement the Informatics PowerCenter enterprise data integration platform. (The Bank initially used Teradata as its data warehouse platform and migrated to Sybase IQ a year ago.) ICICI Bank deployed PowerCenter in 2003 as it embarked on the next phase of its warehouse, which would add data from five new sources, in addition to the initial three sources of retail banking, credit cards, and securities information.

 The next step in the CRM implementation process was gap

analysis which essentially is assessing different loopholes in:

- Marketing, sales and service practices - Collection, capture, processing and deployment of customer information

- Distribution and operations effectiveness at customer touch points

BENCHMARKS/RESULTS
Time-Norms for Various Banking Transactions
S. No. Taken 1 minutes 2 minutes 3 minutes 4 minutes 5 minutes 6 minutes 7 working days 8 within 4 days Outstation Normally Particulars Time

Cash payment
Receipt of cash For issuance of demand draft

Up to 15
Up to 15 Up to 10

Payment of demand drafts

Payment of fixed deposit receipts Opening of an account%

Up to15
20 to 25 25 to 30

Statement of accounts (request for duplicate)

Collection of cheques Local

Within 3

Normally

within 21 days

Deployment of CRM Best Practices- Private Banks

Name of Bank Type Std. Dev 1 ICICI Bank NPB 0.78 2 HDFC Bank NPB 0.63 3 Kotak Mahindra Bank NPB 0.86 4 UTI Bank NPB 0.88 5 IndusInd Bank NPB 1.11 6 ING Vyasa Bank OPB 0.64 7 Centurian Bank of Punjab NPB 1.02 8 Karur Vyasa Bank OPB 1.14 9 Federal Bank OPB 1.06 10 Tamil Nadu Mercentile Bank OPB 1.01 Mean 4.45 4.41 4.1 4.07 3.79 3.76

3.48
3.28 3.24 3.1

In the first table, we can see that the benchmarks set by ICICI are definitely of world class and clearly values customers precious time. Similarly, in the second table its evident that ICICI Bank and HDFC Bank have done very well compared to other banks in terms of CRM best practices. Moreover, the standard deviation is also very less compared to most of the other banks. Clearly this has helped ICICI bank acquire a large customer base (about 30 million) in a short span of time.

CONCLUSIONS
Thus, we see that a focused and customer centric approach helped ICICI Bank become # 2 bank in India (till recently, as PNB has taken over it as the No 2 bank in India now). ICICI has used CRM not only as a tool but also as a strategy to gain competitive advantage over other new generation private banks. It has invested a lot in ICT and spared no pains in giving best to the customers. Its multi-pronged approach towards managing customer relationship is paying dividends constantly and as a result we see millions of happy satisfied customers determined to make it one of the most successful banks in India