A PROJECT REPORT On CRM PRACTICES On BANKING SECTOR

Submitted to Bharati Vidyapeeth Deemed University, Pune

BVDU IMED

Department of Marketing presents Case Study as a innovative teaching Practices

Prof .M D. Kakade
HOD Marketing

Institute of Management & Entrepreneurship Development, Pune 411038 (2011)

Practical training is an essential part of every professional program. It is very helpful in providing knowledge for the practical aspects of academic studies. It is also helpful to go through the actual procedure at workplace.

We got an opportunity to do a project on-

STUDY OF CRM PRACTICES AMONG SERVICE ORGANISATIONS (BANK)

ACKNOWLEDGEMENT

We take it as an opportunity to thank all those who helped us and guided us throughout the completion of this project, without which the report would have not been a reality. We are thankful to all of them who have supported us through this.

We are thankful to Prof .Kakade M.D who have been our project guide and supported us with her knowledge and given us opportunity to carry out our project and under her guidance at all times.

DECLARATION
We hereby declare that the project entitled Study of CRM practices of service organization (bank) original work prepared by us & is being submitted to the Bharati Vidhyapeeth University of Pune in partial fulfillment of MBA(BA) degree for the academic year 2010-2012.

We hereby declare that the dissertation is a result of our own accounts work and the same has not been submitted to any examination of this University or any other university.

Name

: POONAM KUMARI : SAVIO DSUZA

ROLL NO-33 ROLL NO-41

Project

: Study of CRM practices of service

organization (bank) Place : IMED, Pune

Certificate
This is to certify that Mr. Savio Dsouza and Miss Poonam Kumari is a bonafide student of Master of Business Administration, programme of IMED, BVU for the year 2010-12 has successfully completed to do his study. As a part of the Marketing Management curriculum, I have undergone this on the topic for study: CRM Practices on Banking Sector

Teacher Guide Date: Place:

TABLE OF CONTENTS
INTRODUCTION (CRM).......................................... EVOLUTION OF CRM.. NEED.. OBJECTIVE.............................. RESEARCH METHODOLOGY...

Primary data Secondary data Sample Size

DATA ANALYSIS AND INTERPRETATION..

Graphs and Charts

LIMITATIONS. BIBLOGRAPHY... REFERENCES.......................................................................... QUESTIONNAIRE..

INTRODUCTION
Analytical study of banking practices towards the CRM, Customer Relationship Management is the primary tool for gaining insight which involves of customer using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service and technical support. Monitoring the customer satisfaction has become one of the main focus areas. Several banking organization have developed their own method towards the CRM. Some of the financial institutes (bank) mainly focusing of gathering information of consumer relations and collect data in detail. To prepare a field work paper on the topic given-Customer Relationship Management , a random sample of 5 banks is to be taken out from the different banks and gather the information.

STUDY OBJECTIVE
The main aim of Customer Relation Management survey and data analysis is to make a generalize statement about the customer satisfaction in banking sector with other various other personal details of bank employee and customer.

Three Most Important Aspects of Deploying a customer Satisfaction Survey: Design our survey to provide actionable information, instead of "feel good" feedback. Monitor the responses to ensure statistically significant results across the entire bank for specific types of customer (seiner citizen). Rigorously evaluating the analysis to ensure that recommendations are made and actions are taken.

Evolution and introduction of Customer Relationship Management (CRM)

Customer relationship management is a widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy.

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Need
Rising competition, proliferating customer contact, intensifying attacks on customer information, increasing customer expectations, identifying new marketing opportunities etc. have made Banking Sector to face superior challenges than ever before in executing their Customer management strategies. Every organization believes in the significance of knowing the customer. The current economic environment and financial crisis has most probably led many financial services institutions to focus on their CRM strategies while screening customer relationship as a key to profitability of a retail activity and managing the cost and risk associated with it. Every bank wants to provide good quality customer service. Most of the Banks believe that CRM is one of the best strategies for increasing revenue profit margin, developing new market share and to create good brand image among the customers. In Marketing Customer Relationship Management have assumed mounting importance in the overall of a Bank, particularly when competitive onslaught has been fiercely active, Customer Relationship Management has been recognized a, a new marketing paradigm and is emerging as the core marketing activity. No wonder that it has emerged as a strategic tool in the hands of marketing people. Customer relationship management is more focused on trust, commitment and conceptualized now. This paper deals with the role of Customer Relationship Management in banking sector, to gain better understanding of the role of CRM in maximizing customer profitability and to serve their customer better and meet their business objectives.

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CRM Strategy
In any organization CRM strategy is a wide-ranging and detailed definition of the scope of' the CRM programmed towards organizational goals. "The strategy is needed to keep businesses customer centric and to help the company constantly evolve internal processes and technology to acquire and retain customers," explains Krishna Kumar. CRM is fundamentally a strategy aligned with the superseding corporate strategy. It tries to optimize a firm's profitability, revenue and customer satisfaction by focusing on a customer centric process. The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behaviour of customers and the value of those customers. With an effective CRM strategy, a business can increase revenues by: Providing services and products that are exactly what your customers want Offering better customer service. Cross selling products more effectively Helping sales staff close deals faster

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CRM in banking sector

According to a RBI statement, in future India will have a competitive banking market as one of the most attractive market after 2009. India will see foreign banks come in, through mergers and acquisition. Therefore, it is imperative that Indian banks wake up to this reality' and re-focus on their core asset - the Customer. A greater focus on Customer Relationship Management (CRM) is the only way the banking industry can protect its market share and boost growth. With intensifying competition, declining market share, deregulations, smarter and more demanding customers there is competition between the banks to attain a competitive advantage over one another or for sustaining the survival in competition. In India the banking sector has been operating in a very stable environment from last thirty -forty years. In current scenario of banking sector the raising of interest rates and tough competition between these layers had made Indian bankers to realize that the purpose of their business is to create and retain a customer and to see that the entire business process is consistent with an integrated effort to discover, retain and satisfy customer needs. But the success of CRM Strategy depends upon its ability to understand the needs of the customer and to integrate them with the organization's strategy, people and technology and business process. Financial services are in a structural change whereby competition and customer demands are increasing. As such financial companies need to focus shift from product provider to relationship one on core competencies in order to deliver to the value of the customers as shown in the diagram below:

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Benefits of CRM A CRM system may be chosen because it is thought to provide the following advantage: Quality and efficiency Decrease in overall costs Decision support Enterprise agility Customer Attention

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Challenges OF CRM
Successful development, implementation, use and support of customer relationship management systems can provide a significant advantage to the user, but often, there are obstacles that obstruct the user from using the system to its full potential. Instances of a CRM attempting to contain a large, complex group of data can become cumbersome and difficult to understand for an ill-trained user. Additionally, an interface that is difficult to navigate or understand can hinder the CRMs effectiveness, causing users to pick and choose which areas of the system to be used, while others may be pushed aside. This fragmented implementation can cause inherent challenges, as only certain parts are used and the system is not fully functional. The increased use of customer relationship management software has also led to an industrywide shift in evaluating the role of the developer in designing and maintaining its software. Companies are urged to consider the overall impact of a viable CRM software suite and the potential for good or harm in its use.

Complexity
Tools and workflows especially for large businesses. Previously these tools were generally limited to simple CRM solutions which focused on monitoring and recording interactions and communications. Software solutions then expanded to embrace deal tracking, territories, opportunities, and the sales pipeline itself. Next came the advent of tools for other clientinterface business functions, as described below. These tools have been, and still are, offered as on-premises software that companies purchase and run on their own IT [Link] be complex,

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 Poor usability One of the largest challenges that customer relationship management systems face is poor usability. With a difficult interface for a user to navigate, implementation can be fragmented or not entirely complete. The importance of usability in a system has developed over time. Customers are likely not as patient to work through malfunctions or gaps in user safety, and there is an expectation that the usability of systems should be somewhat intuitive: it helps make the machine an extension of the way I think not how it wants me to think. An intuitive design can prove most effective in developing the content and layout of a customer relationship management system Two 2008 case studies show that the layout of a system provides a strong correlation to the ease of use for a system and that it proved more beneficial for the design to focus on presenting information in a way that reflected the most important goals and tasks of the user, rather than the structure of the organization. This ease of service is paramount for developing a system that is usable. In many cases, the growth of capabilities and complexities of systems has hampered the usability of a customer relationship management system. An overly complex computer system can result in an equally complex and nonfriendly user interface, thus not allowing the system to work as fully intended. This bloated software can appear sluggish and/or overwhelming to the user, keeping the system from full use and potential. A series of 1998 research indicates that each item added to an information display can significantly affect the overall experience of the user

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 Fragmentation Often, poor usability can lead to implementations that are fragmented isolated initiatives by individual departments to address their own needs. Systems that start disunited usually stay that way: siloed thinking and decision processes frequently lead to separate and incompatible systems, and dysfunctional processes. A fragmented implementation can negate any financial benefit associated with a customer relationship management system, as companies choose not to use all the associated features factored when justifying the investment. Instead, it is important that support for the CRM system is companywide. The challenge of fragmented implementations may be mitigated with improvements in late-generation CRM systems.

Business reputation Building and maintaining a strong business reputation has become increasingly challenging. The outcome of internal fragmentation that is observed and commented upon by customers is now visible to the rest of the world in the era of the social customer; in the past, only employees or partners were aware of it. Addressing the fragmentation requires a shift in philosophy and mindset in an organization so that everyone considers the impact to the customer of policy, decisions and actions. Human response at all levels of the organization can affect the customer experience for good or ill. Even one unhappy customer can deliver a body blow to a business. Some developments and shifts have made companies more conscious of the life-cycle of a customer relationship management system. Companies now consider the possibility of brand loyalty and persistence of its users to purchase updates, upgrades and future editions of software. Additionally, CRM systems face the challenge of producing viable financial profits, with a 2002 study suggesting that less than half of CRM projects are expected to 18

provide a significant return on investment. Poor usability and low usage rates lead many companies to indicate that it was difficult to justify investment in the software without the potential for more tangible gains. Security concerns A large challenge faced by developers and users is found in striking a balance between ease of use in the CRM interface and suitable and acceptable security measures and features. Corporations investing in CRM software do so expecting a relative ease of use while also requiring that customer and other sensitive data remain secure. This balance can be difficult, as many believe that improvements in security come at the expense of system usability. Research and study show the importance of designing and developing technology that balances a positive user interface with security features that meet industry and corporate standards 2002 study shows, however, that security and usability can coexist harmoniously. In many ways, a secure CRM system can become more usable. Researchers have argued that, in most cases, security breaches are the result of user-error (such as unintentionally downloading and executing a computer virus). In these events, the computer system acted as it should in identifying a file and then, following the users orders to execute the file, exposed the computer and network to a harmful virus. Researchers argue that a more usable system creates less confusion and lessens the amount of potentially harmful errors, in turn creating a more secure and stable CRM system. Technical writers can play a large role in developing customer relationship management systems that are secure and easy to use. A series of 2008 research shows that CRM systems, among others, need to be more open to flexibility of technical writers, allowing these professionals to become content builders.

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RESEARCH METHODOLOGY
Before examining types of research designs it is important to be clear about the role and purpose of research design. We need to understand what research design is and what it is not. We need to know where design into the whole research process from framing a question to finally analyzing and reporting data.

Research design
The purpose of the study to To Study about the CRM practices on Banking sector.. Hence descriptive research design used for this study. A survey was conducted through which an analysis was drowned.

Sample size
A sample of 10 sample was taken for the purpose of study and analysis.

Sampling unit:
Sampling unit consists of both public and private sector banks in Pune.

Sampling technique
Convenience sampling technique was used for the survey. Questionnaire filled by the Branch Manager of some banks with the help of structured questionnaire and personal interview.

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DATA ANALYSIS
According to you, what do you mean by CRM? Product Centric Customer Centric

12 10 8 6 4 2 0 Product centric Customer centric

Analysis: It shows that every bank or a branch manager perception is that CRM is customer centric not a Product centric.

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 Do you use social CRM activities to analyse the customer sentiment? Yes No

8 7 6 5 4 3 2 1 0 Yes No

Analysis-It shows that Bank are using social activities to promote or analyze the customer sentiment, it shows that bank are giving attention to CRM.

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 Are you satisfying your customer as his/her needs? Yes No Maybe

9 8 7 6 5 4 3 2 1 0 Yes No Maybe

Analysis-It shows that branch manager mostly think they satisfy the
customer needs and some of them talk practically and say that customer needs are indefinite so we are not able to complete the needs of all the customers.

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 Promotional activities they are using: Television Radio Seminar Banner

12

10

0 Television Seminar Banner Radio

Analysis: It shows that every bank is using Television and Banner as a promotional tool but only 2 & 3 are using Seminar and Radio respectively.

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 Means for solving Customer Grievances?

Counter Solution Telephone Internet Social Media

12

10

0 Countersolution Telephone Internet Social Media

Analysis-it shows that every bank is using all solution to solve Customer
grievances but there is only 1 bank that is ICICI that is using social media to solve customer grievances.

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FINDINGS
CRM is Customer centric rather than Product centric. Banks are giving proper attention to the CRM. Now another departments are Made for CRM activities. All employees of the bank are given proper training about the CRM. Now even bank have understand that CRM is important in banking also so they are giving proper attention.

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LIMITATIONS

1. Time constraint of two weeks was not enough, therefore, we could not collect and analyse the data of all the bank employee and customer. 2. The respondents personal bias may be another factor, which is uncontrollable. 3. The finding of the survey is strictly based on the responses of the respondents. It is difficult to authenticate, so we are assuming them to be true.

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Industry Discussion

The acronym CRM has been around for over half a decade now and has often been overused. How would you define CRM (for banks)? Michael Otto, Erste Bank: There are many definitions for CRM and all of them are more or less correct. It is important that the client not the product is in the centre. The CRM definition we use is the following, having the right offer for the right client, at the right time via the right channel. That is the reason why we tried to improve the following processes and support it with systems - customer service and advice, customer analytics and campaign-management. Radi Badidi, ABN AMRO: We consider CRM to be a business strategy than anything else - not just technology, not just analytics, not just an impressive story of how customer focused you are. All major banks have invested heavily in technology and infrastructure over the last 5 to 10 years in this area, but hardly any of them have been successful in actually getting it effective. Neither has the customer felt a real difference nor has it contributed to higher ROI. I would say that optimizing every customer contact by effectively creating value for both your clients and your business, using customer knowledge, is the main differentiator compared to non-CRM focused companies. How important is CRM for banks? What benefits can banks hope to achieve through deploying CRM solutions? Michael Otto: CRM is not technology, it is business. CRM has to improve the "moment of truth" when the client is with the bank making the contact more efficient and more satisfactory for the customer. So banks have to improve not only the technology but also the relationship skills of the advisors. 28

Jose Olalla : Few years ago, banks thought about CRM as just a new 'magical' software, and therefore something that should be managed within the technology and systems departments. Now it is a critical part of the agenda of business managers. Since banks pursue high growth strategies, expanding their franchises into growth segments, and are really aware of the winning concept of the multi-channel and multi-price approach, CRM becomes key and critical. Further, today customer centric banking means a new way of thinking. Banks need to focus on relationship banking rather than traditional transaction banking and realize the importance of SOW share of wallet. In the world of margin pressure, being a product specialist is hard, so banks need to make advice rather than product price as the basis of the added value in banking. In this situation, CRM is key because the value of retail banking lies in distribution. Knowing your client is the first requirement of a retailer. It protects your business, helps penetrate growth markets and prevents disintermediation by other players. What are the key aspects that banks need to consider while deploying CRM solutions to achieve a positive ROI? Radi Badidi : Whether CRM only adds to costs or generates revenues is not a technological but a commercial issue. If, for example marketing and sales do not adopt the CRM challenge, CRM will not succeed. It requires intense training, a real dialogue between marketing, technology departments and all channels, it requires commitment to document customer needs whenever possible and a proactive approach towards using customer intelligence on a continuous basis. Michael Otto: Business requirements and targets have to be defined; technology has to make the solution, not the other way round. CRM does not solve all the problems a bank has, so first analysed the problems, and the possible impact of CRM, then prioritize. Secondly, banks need to understand that they need to make a beginning. Start small, but start. Later 29

they can learn and improve. Finally, it is very important to communicate, train and measure all activities. How will the CRM landscape in the banking industry develop in the coming days? Michael Otto : First, as our customers use different channels to go to their bank such as the branch, self-service machines, the service centre or the internet, CRM goes multi-channel. Second, in addition to cross selling, the processes of client retention and improvements in client loyalty are getting more important. Radi Badidi In the coming years there will be more focus on the demand side of customers; they will have various channels at their disposal and have more choice than ever to purchase their products and services with a growing variety of general banks and niche players. As the customer is more in control, we will want to be "actively ready" in all channels when the customer contacts us, based on what we know and anticipate of this client. This requires different marketing skills and new ways of managing your sales. The second trend will probably be that CRM will contribute more to branding. Not just ROI on every contact will be leading, but the way we want to be perceived as a brand will become more important. Now, a lot of effort is put on being there at customers' moments-of-truth. In the future, all customer contacts will be moments-of-truth as all these contacts tell the customers who we are and what we want to be - CRM will help us enable this.

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Questionnaire (Bank)
Hello, we are conducting a survey for the banking industry to know the Banks view on Customer Relationship Management and the steps taken to enhance CRM. Thank you for spending few minutes of your precious time.

1. According to you, what do you mean by CRM? Product Centric Customer Centric

2. Means for solving customer grievances? On-counter solution Telephone Internet Social Media 3. Do you use social CRM to analyse the customer sentiment and perception of your bank? Yes No

4. What types of facilities is being conducted in your bank for satisfaction of your customer?

5. What is the overall percentage of your customer visiting your bank in a month? 100-70 70-50 50-20 Inconsistent

6. Are you successful to in satisfying your customer according to his /her needs? Yes No

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7. What kind of promotional activities is being conducted for promoting CRM of your bank? TV Radio Banner Seminar

8. How are banks using CRM to deepen their relationship with customers?

9. What do you consider in enhancing CRM while providing credit or loans, since most customers are worried about the interest rates and long term uncertainty?

10. How familiar are the Banks employees in using CRM?

11. What do you do, to train your employees on the awareness of CRM and its benefits?

Thank You Your details please, NameDesignationBankDate-

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BIBLIOGRAPHY

1. Research Methodology 2. Marketing management 3. Methodology and Techniques of Social Research

- Random - Ramaswamy- Nandakumari - Wilkinson T.S

REFERENCES
1. 2. 3.

[Link] [Link] [Link]

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