CUSTOMERS SATISFACTION TOWARDS CRM PRACTICES ADHERED BY PUBLIC SECTOR BANKS IN E-BANKING ERA

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International Journal of Management (IJM)
Volume 11, Issue 11, November 2020, pp. 3867-3872, Article ID: IJM_11_11_383
Available online at https://iaeme.com/Home/issue/IJM?Volume=11&Issue=11
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: https://doi.org/10.17605/OSF.IO/7GE2Q
© IAEME Publication Scopus Indexed
CUSTOMERS SATISFACTION TOWARDS CRM
PRACTICES ADHERED BY PUBLIC SECTOR
BANKS IN E-BANKING ERA
Mrs. B. Parkavi
Part – Time Research Scholar in Commerce, M.R.Government Arts College, (Affiliated to
Bharathidasan University, Tiruchirappalli) Mannargudi, Tiruvarur District, Tamil Nadu, India
Dr. S. Rajkumar
Research Advisor and Assistant Professor in Commerce, M.R.Government Arts College,
(Affiliated to Bharathidasan University, Tiruchirappalli) Mannargudi, Tiruvarur District,
Tamil Nadu, India
ABSTRACT
In a country, banking sector servers as the foundation on which the pillars of
economic growth and development can be constructed. With the major reforms in
banking sector, the scenario of bank market has been changed. Target market of
banking sector has become highly competitive, dynamic and fragmented. Hence, there
is a need for a shift from the transactional marketing strategy to relationship-based
marketing strategy in all the banks. The current study attempts to conduct a study of
deployment of CRM Practices Adopted by Public Sector Banks in E-Banking Era
specific to an Indian Public sector bank, The research objective involves describing how
the selected bank is deploying the CRM Best Practices toward building relationships
with their customers.
Key words: Customer Satisfaction, Customer Relationship Management-Banking.
Cite this Article: B. Parkavi and S. Rajkumar, Customers Satisfaction Towards CRM
Practices Adhered by Public Sector Banks in E-Banking Era, International Journal of
Management (IJM), 11(11), 2020, pp. 3867-3872.
https://iaeme.com/Home/issue/IJM?Volume=11&Issue=11
1. INTRODUCTION
Customer Relationship Management (CRM) is a term that refers to practices, strategies and
technologies that companies use to manage and analyse customer interactions and data
throughout the customer lifecycle, with the goal of good business relationships with customers,
assisting in customer retention and improving sales growth (Gopinath, 2020a). CRM systems
are designed to compile information on customers across different channels or points of contact
between the customer and the company which could include the company's website, telephone,

Customers Satisfaction Towards CRM Practices Adhered by Public Sector Banks in E-Banking Era
live chat, direct mail, marketing materials etc. Today, many businesses such as banks, insurance
companies and other service providers realize the importance of Customer Relationship
Management (CRM) and its potential to help them acquire new customers retain existing ones
and maximize their lifetime value (Gopinath, 2019a). At this point, close relationship with
customers will require a strong coordination between IT and marketing departments to provide
a long-term retention of selected customers. Customers have more power in deciding their bank
of choice. Consequently, keeping existing customers, as well as attracting new ones, is a critical
concern for banks. Customer satisfaction is an important variable in evaluation and control in a
bank marketing management (Gopinath, 2020b). Poor customer satisfaction will lead to a
decline in customer loyalty and given the extended offerings from the competitors, customers
can easily switch banks. Banks need to leverage effectively on their customer relationships and
make better use of customer information across the institution.
2. STATEMENT OF THE PROBLEM
Today, customers want to have a better quality of lifestyle and they are buying against future
cash flows. The opening of new career options has fuelled the aspirations, backed by the rise in
salary. Emergent middle-class population, changing demographic pattern and emerging
psychological shift would be key drivers of growth (Gopinath, 2020c). This response of the
customers has created an enormous business opportunity for the banks and they have responded
promptly with the new products, quick and efficient service and new delivery channel of
banking. The banking sector in India is growing rapidly and helps to improve the economic
development of a nation. The success of banking in the fast-changing economic scenario
generally depends on the people, customers and technology. The ultimate performance of a
bank depends upon the satisfaction of its customers (Gopinath, 2019b). In order to boost their
economic lines banks are increasingly looking at ways of achieving organic growth through
acquisition of new customers and retaining existing customers. All these can now be possible
with the effective adoption of CRM in this sector.
3. OBJECTIVES OF THE STUDY
• To measure the customers level of satisfaction towards CRM Practices adhered by the
banks.
• To understand the role of technology in services enhancing of Public Sector Banks
through CRM practices.
4. METHODOLOGY OF STUDY
This is a conceptual paper based on previous theoretical and empirical studies. The data is
secondary in nature. We explored the review of literature and proposed a conceptual model to
further conduct empirical studies.
5. REVIEW OF LITERATURE
Galbreath and Rogers (1999) the study found that Customer relationship management, or CRM,
is a new management concept - a new approach - to managing customers. CRM is about the
management of technology, processes, information resources, and people needed to create an
environment that allows a business to take a 360-degree view of its customers. CRM
environments, by nature, are complex and require organizational change and a new way of
thinking about customers - and about a business in general. Creating such an environment
requires more than adequate management of the customer relationship or new technologies. He
suggested that CRM environments improve business performance; initiatives undertaken in this
new management field require sound leadership as well. CRL is a recommended approach to

B. Parkavi and S. Rajkumar
bridge the gap between a CRM vision and its reality.ParimalVyas (2000) the study attempted
at studying empirically customers' satisfaction with the services provided by different banks
and also analyzed the responses of customers towards the actual time taken by banks to
complete the banking transaction. The finding of the study revealed that nationalized banks and
co-operative banks need to improve on reducing the overall time taken to complete banking
transactions. Comparatively, the private and foreign banks took much less time for completing
their transaction (Gopinath, 2020d). Nationalized and co-operative banks need to increase the
use of information technology and CRM to deliver standardized customer-specific banking
service to its targeted customers. Deepali Singh (2001) The aim of the study was to examine
the status of relationship marketing in India and elicit the techniques to maintain relationship
with customers through information technology and thereby to make a shift from discrete
transaction to enduring relationship. The study revealed that the development of information
technology and opening up of the digital market enabled the marketers to provide customized
products / services and thereby develop value based long lasting customer relationships
(Gopinath & Shibu, 2013). The only strategy that was perceived to make sense in the emerging
marketing environment was that the marketers should learn and practice customer relationship
management. Arvinthan and Prithwiraj (2003) the study found the role of trust encompasses
the exchanges and interactions of are tail bank with its customers on various dimensions of
online banking. Specifically lays stress on the bank-to-customer exchanges taking place
through the technological interface. Hypothesizes shared value, communication and
opportunistic behaviour as antecedents to trust. Trust and commitment also have a causal
relationship. Proposes and empirically tests five hypotheses with a sample of 510 Internet users
of various profiles in India. Develops a structural equation model (Lisrel) and establishes all
hypotheses. Observes that shared value is most critical to developing trust as well as
relationship commitment. Communication has a moderate influence on trust, while
opportunistic behaviour has significant negative effect. Also finds higher perceived trust to
enhance significantly customers ’commitment in online banking transaction. An important
contribution concerns how trust is developed and sustained over different levels of customer
relationship in online banking. The future commitment of the customers to online banking
depends on perceived trust. Anbuoli, P. (2013) in her study found out that The lack of
understanding on Customer Relationship Management (CRM) is always a concern among the
service providers especially banks. Banks have their own way of managing their relationships
with the customers. However, the perception of customers on CRM practices among banks
should also be taken in to consideration (Gopinath, 2020e). CRM activity attend the needs of
customers without delay in time, the banks can create more awareness to customers and can
create a customer data base very significantly. Bhat and Darzi (2016) study found that four
CRM dimensions have a positive effect on customer loyalty and competitive advantage of the
bank. The study commented that among the CRM dimensions, customer knowledge is most
influential of all the dimensions. Munaiah and Mohan (2017) study found that the most of the
female respondents were satisfied with CRM practices of public sector banks compare to male
respondents in Kadapa district. The study established that there prevails significant association
between gender, occupational of respondents and overall attitude of customers towards CRM
practices of selected public sector banks. Based on the knowledge gathered from the extensive
literature review, the study gained a motivation for the conduct of this study. This study aims
to analyse the customer’s satisfaction towards CRM Practices of Public Sector Banks in E-
banking era.
6. IMPORTANCE OF CUSTOMER RELATIONSHIP MANAGEMENT
Customer Relationship Management in banking is a key element that allows a bank to develop
its customer and sales capacity. Retaining customers is a major concern for banking institutions

which shows the importance of CRM practices. In the present time CRM activities are done by
the banks to develop strategy, growth, profitability and competitiveness of bank. Better CRM
activities help to know the needs of the customers and proper development of product. As
competition increased the focus on CRM also increased to maintain the present customers and
to attract the new customers with the help of CRM activities. Adopting CRM practices is useful
to get better understanding of the customer needs and for proper product development. It also
helps in effective segmentation, targeting, positioning, complaints management, maintaining
long-term profitable and mutually beneficial relationships with customers (Gopinath, 2020f).
In the present financial market environment CRM is the most essential factor as well as strategy
for success, growth, profitability and competitiveness of banks, especially Public Sector Banks,
because of cut-throat competition, technological advancement and changing customers’ needs
and preferences.
7. IMPACT OF E-BANKING ON BANKING SYSTEM
The banking system is slowly shifting from the Traditional Banking towards relationship
banking. Traditionally the relationship between the bank and its customers has been on a one
tone level via the branch network. This was put into operation with clearing and decision
making responsibilities concentrated at the individual branch level. The head office had
responsibility for the overall clearing network, the size of the branch network and the training
of staff in the branch network. The bank monitored the organization's performance and set the
decision making parameters, but the information available to both branch staff and their
customers was limited to one geographical location.
8. ADOPTION OF CRM TECHNOLOGY IN BANKING SYSTEM
Information Technology revolution had a great impact in the Indian banking sector. The use of
computers software had led to introduction of online banking system in India. The use of the
modern innovation and computerization of the banking industry in India has improved after
economic liberalization in the year 1991 as the country's banking sector has been exposed to
the world's market. The Indian banks were finding it difficult to compete with the international
banking standards in terms of customer service to provide convenience without the use of the
information technology and computer system and software. Reserve Bank of India in the year
1984 formed Committee on Mechanism in the Banking sector whose chairman was Dr C
Rangarajan, Deputy Governor, Reserve Bank of India. The major recommendations of the
committee were implementing MICR Technology in all the banks in the metropolis in India. It
provided us standardized cheque forms and encoding and decoding system. In the year 1994,
the Reserve Bank of India set up Committee on Computerization in Banks was headed by Dr.
C.R. Rangarajan which emphasized that the settlement operation must be computerized in the
clearing houses of Reserve Bank of India in Bhubaneswar, Guwahati, Jaipur, Patna and
Thiruvananthapuram. It further stated that there should be National Clearing of inter-city
cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should be made Operational. It also
focused on computerization of banking services in all branches and increasing connectivity
among branches through computers. It also suggested implementing on-line banking facilities.
The committee submitted reports in the year 1989 and computerization of all branches started
form the year 1993 with settlement between IBA and bank employees' association. In the year
1994, Committee on Technology Issues relating to Payments System, Cheque Clearing and
Securities Settlement in the Banking sector was set up with chairman Shri.WS Saraf, Executive
Director, Reserve Bank of India. It emphasized on Electronic Funds Transfer (EFT) system,
with the internet communication network as its carrier. It also said that MICR clearing should
be set up in all banks with more than 100 branches.

B. Parkavi and S. Rajkumar
9. CONCLUSION
Today, Banks operations in India, especially Public Sector Banks are admits that they have to
face twin challenges of meeting customers’ satisfaction and ever changing technological
innovations (Gopinath, 2020g). To overcome these issues CRM acts as the best tool. This study
provides a step in understanding the existing CRM Practices in Public Sector Banks from the
E-banking perspective. To achieve the customer requirement and to survive in the competition,
the banks need to deliver best quality service. The banks have to upgrade and constantly think
of new innovative customized packages and services to remain competitive
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