Crm in Banking : A Case Study of Icici Bank

CRM IN BANKING : A CASE STUDY OF ICICI BANK

Globally, regulation and technological improvements are responsible for the vast majority of innovations in banking over the past quarter century. The introduction of personal computers and the proliferation of

ATMs in the 1970s captured the bank management's attention. The regulatory changes in the 1980s fuelled much of the industry's growth, which was followed by downsizing as bankers focused on creating a

market presence which resulted in significant merger activity. Recent technological improvements are at

the root of the bankers' focus as well as a target for their significant investment today. In fact, according to

recent projections, bankers and their financial service company brethren will spend almost $ 7 billion this year on CRM and increase that by 14 per cent each year for the next several years.

Why CRM?

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The Changing Environment

The environment within which financial institutions operate has changed in recent years. It is now one of:

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Increased competition

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Growing product commoditization, and

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Diminishing margins Banking customers have also changed in recent years. Customers today are more knowledgeable, sophisticated and assertive than ever before. They demand higher levels of customer service, are less loyal, and more inclined to switch to a competitor. Modern customers thus necessitate flexibility in hours of operation, greater convenience, customization, transparency, accessibility and control. This has led to a shift in business focus from transactional to relationship marketing.

CRM Strategy

Customers are the lifeblood of the business and the way in which a bank can protect and increase its customer base

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and ultimately its profitability

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is to build strong customer relationships through the delivery of superior quality service and to meet customer needs better than the competitors. The CRM approach focuses on maximizing value for the customer and the bank. Research has shown that the key drivers of customer loyalty are:

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Positive staff attitude

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Honesty, integrity and reliability

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Proactive advice and deliver of promise

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Consistent delivery of superior quality service

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Simplicity and ease of doing business

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Good after-sales service

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A fair effective complaints resolution policy.

Focus on ICICI Bank's Initiatives

The use of CRM in banking has gained importance with the aggressive strategies for customer acquisition and retention

being employed by banks in today's competitive milieu. This has resulted in the adoption of

various CRM initiatives by these banks to enable them achieve their objectives. The steps that banks follow in implementing CRM are:

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Identifying CRM initiatives with reference to the objectives to be attained (such as increased number of customers, enhanced per-customer profitability, etc.),

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Setting measurable targets for each initiative in terms