Customer Relationship Management in Banking

CHAPTER: 1

INTRODUCTION

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1.1 Introduction to CRM in Banking.

Relationship marketing is another way of marketing. It is a multidisciplinary approach, highlighting
advertising "as an integrated organization including organizational strengths, which emphasizes the
promotion, integration and maintenance of relationships over time." This pattern is designed for the
common movement to internal data, IT, data management, where advertisers have used this new
approach to build closer relationships with their customers. The general purpose of promoting
relationships is to integrate and promote long-term customer communication.

CRM is a long way to go; Continued growth of customer relationships provides consistent integration
between customers Service, advertising, data design and other customer-related skills. It incorporates
people, processes and strategies to grow organizations and all clients. "What motivates a business is
finding a customer." "What motivates a business is to make and keep a client." "The motive of the
business is to find, retain and develop the right customer." In this focused world each effort must be
made to achieve the same customers. Customer-working relationships are currently recognized as a
disposal purpose for promotion and business as a whole. The biggest challenge to manage in the new
millennium of freedom and global business distribution is to help and maintain good customer
relationships. Customer Relationship Management is considered to be the most influential in the early
years of this century. While planning organizations are beginning to produce more to date, advanced
plans have been more flexible across commercial enterprises, found to be easier to use data with
power. Instead of promoting data in a static database for future use, has become a way to continuously
improve understanding of customer needs and behavior. Data preferences, sub-editors, and prominent
organizations empowered to separate data into smaller subsets for the purpose of assessing rigorous
ratings, as well as customer motivation data and feedback. This paper will provide banks in the public
sector. India's banking industry has undergone rapid changes followed by a series of significant
developments. Most important among them is the development of information technology and
communication system. This has changed the concept of Traditional Banking activities and has been
instrumental in increasing the dissemination of financial information and reducing the cost of many

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financial services. Information technology and network communication systems have changed the
performance of banks. Second, increasing competition between a variety of domestic and foreign
institutions in the product market becomes a widespread practice.

The entire service sector has now been redesigned for customer specification. Until the
recommendations of the Narasimhan Committee, Indian banks operate under a protected environment.
Even after 1993 saw the emergence of a new type of banks called new banks in the private sector and
the opening of many foreign banks in India.

1.2 Defining CRM

The previous discussions highlight the scope of the researchers' concepts in understanding and
interpreting relationships. Similarly in marketing literature, the terms customer relationship
management and relationship marketing are used interchangeably to reflect different themes and
perspectives. Some of these themes offer minimalist marketing ideas while others offer a broad and
credible perspective on understanding and practice. A small customer relationship management
concept is database marketing that emphasizes marketing promotional features linked to data
endeavors, Another point to view CRM processing only as customer retention where various post
marketing methods are used to bind customers or stay in the internal markets. for sale. The most
popular way to use the latest information technology is to focus on an individual or individual
relationship with a customer that combines database information and long-term customer retention
strategy.

Jackson used the concept of individual accounts in the industrial market to suggest that CRM markets
mean that marketing is focused on strong, lasting relationships with individual accounts.
(communication and information sharing). Berry, in a broader sense stressed that attracting new
customers should only be considered as a step towards the marketing process.

Developing close relationships with these customers and converting them to trust is an equally
important aspect of marketing. Therefore, define relationship marketing as attracting, retaining, and
improving customer relationships. By focusing on the value of partnerships in marketing and your
subsequent results in customer relationships, the broader perspective proves that customer
relationships should be a prominent marketing paradigm.

Marketing is to establish, maintain and enhance relationship with customers and other partners, at a
profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange
and fulfillment of promises. The implication of Gronroos definition is that customer relationships is
should be devoted to building and enhancing such relationship. Similarly, Morgan and Hunt suggested
that 13 relationship marketing refers to all marketing activities directed towards establishing,
developing and maintaining successful relationships.

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1.3 The Evolution of Customer Relationship in Banking

About 70 years back, in the 1950s, as businesses grew, memory gave way to Pen, Paper and Pad for
collecting, tracking and storing relevant customer information.

Database Marketing: In the early and late 1980s, Database Marketing took center stage, which
allowed the organizations to compile customer data and analyze information to develop customized
communication for retaining and attracting customers. In the later part of the decade, PCs took the
market by storm which enabled the companies to organize customer data and provide insight into their
behavior.

Sales Force Automation: In the early ‘90s, customer relationship management gained credence and a
boom in the software development market introduced Sales Force Automation for organizations,
which improved the sales processes and increased the efficiency.

Customer Relationship Management: And finally, in the year 1995, the term CRM came into
being. In the late ‘90s, CRM kept evolving and the first CRM system was developed and also, for the
first time, Software-as-a-Service or SaaS product was introduced in the CRM industry.

Now and a peak into the future: In the last decade and a half, CRM has become the mainstay of
many businesses and several industries, integrating processes through a single platform. CRM, with
its ability to personalize communication has taken relationship with the customers to the next level.
Cloud based CRM software is developed, mobile CRM improves and social CRM gains popularity
giving customer relationship management an interesting.

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1.4 Need of CRM in Banking

Long-term customers are more likely to become a referral source.

1. The longer a relationship continues; the better a bank can understand the customer and his/her
needs & preferences, and so greater the opportunity to tailor products and services and cross-
sell the product / service range.
2. Customers in long-term relationships are more comfortable with the service, the organization,
methods and procedures. This helps reduce operating cost and costs arising out of customer
error.
3. The Customers in Banking Industry today are well informed. With the introduction of new
technology, the world has become like a small village. Thus, if a Bank wants to have more
customers, it should develop a good relationship with its present customers and try to
maintain the same in the future also.
4. In the present scenario, brand loyalty is on decline. The customers are switching over
frequently to avail the better facilities from other banks. Newer and superior products and
services are being introduced continuously in the market. Thus, the banks have to upgrade
their products, improve customer service and create bonds of trusts through proper care of
customer needs and regular communications. With the help of CRM, strong customer loyalty
and a good image for the organ

1.5 Introduction To ICICI Bank

ICICI bank is an Indian multinational bank and financial services company headquartered in
Mumbai. Offers a wide range of banking products and financial services for corporate and retail
customers through variety of delivery channel and specialized subsidiaries in the area of investment
banking, life, non-life insurance, venture capital and asset management.

This bank has a year of experience in this field and provides a various service to its customer and has
a principle of ONE BANK, ONE ROE and FAIR TO CUSTOMER, FAIR TO BANK.

The bank has a network of 1626 branches and about 4883 ATM in India and presence in 18 countries.

Bank has an objective of creating a development financial institution for providing medium- and long-
term project finance to Indian businesses.

The Ramaswamy Mudaliar is elected as the first chairman of ICICI bank ltd.

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About ICICI Bank

A Bank of Financial Institution which deals with Deposits and advances and other related
services It receives money from those want to save in the form of deposits and it leads to those who
need it. Oxford dictionary defined as on establishment for custody of money, which its posy out on
customer’s order. Finance is the life blood of trade. Commerce and industry. Now day banking
section acts as on the backbone of modern business development of any country mainly depends upon
the banking system.

Banking if we equate it with money lending is perhaps as old as civilization itself. When
money in its modern form was not in existence people in order to obtain goods or services offered
other goods or services in return. This was barter, a clumsy inconvenient system in many ways.

ICICI bank ltd has a 32 branches in BELGUAM DISTRICT of KARNATAKA .

ICICI bank ltd Chinchali is the one of the branches among them and has a years of experience .

This bank provides a various type of loans and advances to its customer. And bank has great
sources of network with its customers. The bank provides various services such as FD, Insurance,
loans, cards etc.

Bank provides various type of services to its customers and keeps their amount safe.

PRINCIPLE OF BANK

• ONE BANK, ONE ROE.

• Fair to customer, fair to ban.

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CHAPTER: 2

RESEARCH & DESIGN

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2.1 Planning and Implementation of CRM

Embedded within each of these five key phases are a number of decision-points and activities, as
follows:

1. Develop the CRM strategy:

● situation analysis & establish goals and objectives

● commence CRM education & identify people, process and technology requirements

● develop the CRM vision & establish goals and objectives

2. Build the CRM project foundations:

● identify stakeholders & establish governance structures

● identify change management needs & identify project management needs

● identify critical success factors & develop risk management plan.

3. Specify needs and select partner:

● process mapping and refinement & data review and gap analysis

● initial technology needs specific caution,&and research alternative solutions.

● call for proposals ,revise technology needs identify caution & assessment and partner selection.

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4. Implement project:

● refine project plan & identify technology customization needs

● prototype design, test, modify and roll out

5. Evaluate performance:

● project outcomes

● Business outcomes. The rest of this chapter will add further detail to the CRM project design.

2.2 Key Benefits of CRM in Banking Sector

The most compelling benefits of a successful CRM implementation include:

 Better Sales/Marketing Information: For example, customer names, customer background,

customer needs, competitive positioning, etc. is just some of the information that is collected
as a result of implementing a CRM system.
 Improved Productivity: For example, effective target market identification, reduction in the
number of cold leads, and the ability to provide accurate and on-the stop quotations, look up
inventory availability quickly, enter orders directly from the field, etc. all of which help to
shorten the sales cycle.
 Enhanced Customer Care: For example, more time to spend with customers due to a
reduction in the sales administrative workload, an ability to monitor customer service levels,
and ability to highlight existing or potential customer service problems and to react more
quickly to customer needs, etc.

Benefits of CRM can be categorized into three groups:

1. Benefits for Customers

i. There is a more coordinated and professional approach to customer contact.

ii. With up-to-date customer information, Banks can offer more personalized services.
iii. Customers feel empowered if they have greater access to products and services. For
example24 Hours banking.

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2. Benefits for Employees

i. Employees are empowered with the information to deliver high quality serviceand meet
customer expectations.
ii. Employees have more time to serve customers.
iii. Employees have higher satisfaction ratings.

3. Benefits for Banks

i. Managers are empowered with information that can help them to manage customer
relationships and make better decisions.
ii. Optimum use of resources.
iii. Customer satisfaction and increased loyalty.
iv. Improved customer acquisition and cross-selling.

2.3 Advantages and Disadvantages of CRM

Advantages:

1. Enhanced Customer Experience: CRM systems enable banks to provide

personalized services tailored to individual customer needs and preferences. This can
lead to higher customer satisfaction and loyalty.
2. Improved Customer Retention: By better understanding customer behaviors and
preferences, banks can proactively address issues, offer relevant products/services,
and retain customers over the long term.
3. Increased Cross-Selling Opportunities: CRM systems allow banks to identify cross-
selling opportunities based on customer data and interactions, thereby increasing
revenue from existing customers.
4. Operational Efficiency: Streamlining customer data and interactions through CRM
systems can improve operational efficiency, reduce redundancies, and lower costs.
5. Better Decision Making: Access to centralized customer data and analytics can
enable banks to make data-driven decisions regarding marketing strategies, product
development, and customer service improvements.

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Disadvantages:

1. High Implementation Costs: Implementing a CRM system in a bank can be costly,

involving expenses related to software, hardware, training, and integration with
existing systems.
2. Complexity and Integration Challenges: Banks often have complex IT
environments with multiple systems and data sources. Integrating CRM with existing
systems and ensuring data accuracy can be challenging.
3. Resistance to Change: Employees may resist using new CRM systems if they
perceive them as complicating their workflow or requiring additional effort for data
entry and maintenance.
4. Data Privacy and Security Concerns: Handling sensitive customer data requires
robust security measures to prevent data breaches and comply with regulatory
requirements (e.g., GDPR, CCPA).
5. Over-reliance on Technology: While CRM systems provide valuable insights,
there's a risk of over-reliance on technology without maintaining personal
relationships and human touch points with customers.
6. Customization and Adaptation Issues: Off-the-shelf CRM solutions may not fully
meet the specific needs of a bank, requiring customization which can be time-
consuming and costly.

2.4 Five Key Components of CRM in Banking

The five key components of the CRM process determine the effectiveness of your overall customer
relationship management strategy. Managing customer relationships means taking a proactive
approach to understanding the needs and challenges of your prospects, and actively engaging them in
your sales strategy.

1. Connect with New Prospects & Leads: The customer relationship process starts long before
a contact becomes a customer. It begins with generating and identifying new potential
customers in the form of prospects, or leads. While the job of introducing leads to your sales
funnel is generally the job of the marketing department, your CRM sales process depends on
being able to consistently identify and attract prospective customers and begin to build a
relationship
2. Track & Monitor Sales Opportunities: Your CRM process will include creating and
tracking sales opportunities and moving them through your sales pipeline. Sales opportunities

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represent

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Potential future revenue as a result of winning your customer’s business, and your CRM
process should define the stages of your sales pipeline as well as the activities necessary to
keep deals moving forward. Additionally, tracking your sales opportunities through a well-
developed sales pipeline ensures that you are taking action in a timely manner. Handwritten
thank-you note every time I meet with a new prospect or book a new project because it helps
that person feel that they are valued and strengthens the relationship.
3. Understand Your Customers: A big part of the CRM sales process understands your
customers and their specific needs. Taking the time to ask questions and listen before
assuming that you know what is most important allows you to better address the specific pain
points they experience and provide products and services that meet their needs. The difference
between a mediocre salesperson and a rock star is often how well they resist the urge to
“sell,” and instead simply listen.
4. Manage Communications: Another important component of the CRM process is to
effectively manage communications with your contacts. Since communication is the primary
activity that builds trust and drives relationships, how you handle this has a direct impact on
the success of your sales process. The goal is to make sure that everyone on your team who
interacts with a contact has the ability to review previous communications and understand
where that customer is at in the process.
5. Manage Your Team’s Efforts: The CRM process involves many moving parts, and many of
those parts are people. This means that it’s important to have a system in place for
coordinating your efforts, assigning responsibilities, and evaluating the performance of your
team. This reduces confusion and eliminates overlap that results from uncertainty when team
members aren’t sure who is responsible for which customers, or step, in the sales process.

2.5 RESEARCH METHODOLGY

Data collection is an elaborate process in which the researches make a planned research for
relevant data. Data is the foundation of all market research. Data are facts may be obtained from
several sources.

Data can be classified as:

 Primary Data

 Secondary Data

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Primary data: It is gathered for the first time by the researchers. If the secondary data is found to be
inadequate or unavailable, the researcher goes for primary data.

Secondary data: Secondary data is the data borrowed from secondary sources by the researcher.
Secondary data can be internal or external i.e., internal records of the company or information
available from library and other statistical organization. This project is based on both primary as well
secondary data. Primary data is collected by preparing a questionnaire and conducting a survey
regarding the topic & Secondary data is taken from internet & various books.

Scope of the Study:

1. Scope of the research is limited to top three public sector and private sector banks Public
sector banks are State bank of India, Bank of Baroda, Dena bank, Union Bank of India,
Punjab National Bank. Private Sector Banks are HDFC bank, ICICI bank, Axis Bank, Kotak
Mahindra Bank and Yes Bank.
2. Research is Carried Out in mumbai City.
3. Research explores certain customer related aspects such as attitude of employees, Saving
Account portability, Locker facility, ATM facility, Passbook facility, Internet banking,
timings, Issue of DD, Customer Care, Ambience, Collection of Cheques, Issue of Cheque
Book, information about new products and services, Cheque Deposit for collection and
parking facility.

Objectives of the study:

1. To find out the overall percentage of customers perception of the services.

2. provided by the banks and to establish comparative analysis of services provided by
Public sector banks and Private sector banks.
3. To examine the customer feedback and their knowledge about various services provided
by the Public sector banks and private sector banks.
4. To study & monitor the working styles, structures, economic objectives of Public banks
in comparison to private banks.
5. To evaluate the control criterion for reducing paper work, level of automation, level of
computerization by banks to provide efficient services to customers.
6. Identification of barriers to successful implementation of CRM.
7. Assessments of customer loyalty towards banks.
8. To suggest a model for successful CRM implementation.
9. To put forward concrete suggestions and recommendations.

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2.6 Limitations of CRM:

1. Require top management support.

2. Confusion in attributes.
3. Problem in implementation.
4. Building relationship.
5. Not functionally organized.
6. Customer Dissatisfaction.
7. Front line staff.
8. Customers do not like hearing that they are not treated equally.
9. In service operations where service discrimination is common, customers satisfaction is
taking “nosedive” and customers complaints are also rise.
10. Privacy issues are also a problem.

2.7 Data Collection:

1. The present study is based on both primary data and secondary data. The information
related to customer perception towards services provided by public sector and private
sector banks is collected for following age groups with the help of structured
questionnaires.
20-30
31-40
41-50
51-60
The sample size of the study is 600 consisting 300 from public sector banks and 300 from
private sector banks. These respondents have been selected on random sampling basis.
2. Separate questionnaires will be structured for relationship managers and executives who
are actually service providers to know their views and existing CRM system.
3. In order to understand customer perception following attributes taken into consideration
and ratings will be given by which customer satisfaction level can be analyzed about each
single service attribute which will help to design appropriate CRM model. Following is
the rating table.

INSTRUMENTS USED FOR THE DATA COLLECTION

1. Questionnaires.
2. Interviews.
3. Observations.
4. Archival documents and government sources

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METHODS FOR THE DATA COLLECTION

Along with instruments there is another method for collecting data. The data or other methods which I
was used to prepare a project those are

1. Telephone
2. Interview
3. Mail
4. Observations
5. Online

2.8 Research and Design of ICICI BANK

Research design talks about solving research problems scientifically. Exploratory research,
Descriptive research and Experimental research are called as types of research.

Descriptive-The research design is descriptive as the study aims to find out the characteristics
of consumers as well as the employees. The problem is already known, and we are defining the
population characteristics using sample. So, it is a detailed study which defines the 5W and 1H (who
is buying, when is he/she buying, where is he/she buying, why is he/she buying and what is he buying
and how is he/she buying)

2.9 SAMPLING

In statistics, quality assurance, and survey methodology, sampling is the selection of a subset of
individuals from within a statistical population to estimate characteristics of the whole population.

SAMPLING TECHNIQUES

1. SAMPLING AREA: The sampling area is icici bank chinchali ltd. The study is limited to
Chinchali as it is difficult to have comparison here between regions due to the time frame and
cost aspects involved.
2. SAMPLING UNIT: Customers and Employees of bank
3. SAMPLING METHOD: The study uses Convenience Sampling for consumers and
employees. It is difficult to use random sampling for consumers due to the large population.
Also, the bank employees will be selected based on permission of the management.
4. SAMPLE SIZE: A study covers a sample size of 50 customers of “icici bank Ltd” as
respondents.
Area of location : Chinchali

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CHAPTER: 3

BANK PROFILE

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3.1 About ICICI Bank

Formerly : Industrial credit and investment corporation of

India Type : Private development finance institution

Industry : Financial service

Head quarter : Mumbai (Maharashtra)

Branches 5900

CEO : Sandeep Bakshi

Customer service 1800 1080

Founded : 5 Jan 1994

Products : Banking commodities, credit cards, private equity, mortgage loans etc.

Revenue : Rs 186,178.80 crore

Operating income : Rs 53,196.39 crore

Net income : Rs 34,036.64 crore

Total assets : Rs 1,958,490.50 crore

Total equity : Rs 214,497.80 crore

Number of employers : 130542(2022)

Capital ratio : Tier 116.97% (2022) Website: www.icicibank.com

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1.2 Bank Profile

ICICI BANK LTD CHINCHALI

Bank Name : ICICI Bank PVT LTD

Started 2017
Address : Chinchali Tal: Raibag Dist.: Belgaum Karnataka 591217
Contact No 08088667777
Email id : [email protected]
Official website : www.icicibank.com

3.3 VISION AND MISSION OF BANK

VISION

 To ensure most cost-effective power for sustained growth of India.

 To provide clean and green for secured future of countrymen Constituent associates and
stakeholders.
 To achieve excellence in every activity we undertake .

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MISSION

 We will leverage our people, technology, speed and financial capital to Create value for our
stakeholders.
 Expand the frontier of our business globally.
 Play a proactive role in the realization of India’s potential.

 Maintain a high standard of government and ethics.

CORE VALUE

 Worthy of trust.
 Customer focused.
 Respect for each other.
 Respect for each other.

 Winning with integrity.

3.4 ORGANIZATION CHART

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3.5 PROBLEM OF STUDY

 The current study is limited to ICICI bank ltd Chinchali.

 Time is important limitations.
 The whole study was conducted is in a period of time.
 To find out the need of the customer and hence formulate the strategy to level the economy in
the society.
 How the products are helping to the customer.

 To know the utility of the product.

3.6 OBJECTIVES OF STUDY

 Targeting Customers: Identifying potential customers and approaching them with suitable
offers.

 Sales Reference Material: Creating a consolidated information database on products,

pricing, competitor information, and marketing collateral.

 Consistent Interface with Customers: Ensuring a consistent experience for customers.

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