Customer Relationship Management for Banks
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Final Report
“CRM for Banks”
(Customer Relationship Management, Term V, PGP 2003-05)
Submitted to:
Prof. J.K. Das
Submitted by:
Indian Institute of Management Lucknow
November 29, 2004
Table of Contents
Executive Summary
Introduction
CRM Initiatives in Banks
Retail Banking:
Corporate Banking:
CRM Initiatives in Indian Banks
CRM Initiatives in Foreign Banks
Gap Analysis: CRM Initiatives at Indian Banks
Case Study: ICICI Bank
Objectives
ICICI Bank-Infosys Partnership
Implementation of CRM Intiatives
CRM Redefines ICICIs Online CRM Objectives: Future Actions
Customer Acquisition
Service Channel Medium
Virtual Community
Future Opportunities
CRM Packages
Conclusion
Executive Summary
The various market drivers for the CRM market in India are Ð- need for improved customer service, high global adoption, and reduced product differentiation, capabilities of new technologies and media attention. On the other hand, there are certain market inhibitors like Ð- low awareness of its benefits, high cost of implementation, poor IT infrastructure, lack of customer orientation, lack of information about CRM market and also lack of success stories. Banking, Insurance and Financial Services are the sectors that are expected to benefit the most from CRM practices and technologies. To study this sector on which the impact of CRM initiatives is expected to be immense we have specially taken up the detailed live case study of ICICI Bank. From this case study and the secondary analysis of various other national and international banks, we have tried to identify the areas where there is scope for improvement, solutions and strategies for implementing these future plans and the lessons drawn from the initiatives taken by various banks. Also the market for CRM packages has been explored to identify the leading packages for Banking and Financial Services. SIEBEL emerges as the top-of-the-mind CRM package followed by Oracle and Talisma (Based on survey by Icicle Consultancy). Finally some of the major suggestions for future course of action for ICICI Bank are in the area of database, interaction and personalization technology; at the same time in general data gathering, access and integration through marketing and sales automation would enable achieve ultimate customer relationship management objectives.
Therefore, the goal is to take full advantage of what customer data the bank do have and can acquire within legal means. Identifying sales opportunities from this customer data and acting upon them quickly and effectively is key to meeting banks day-to-day and long-term business objectives. Without being able to effectively tap into banks customer data to provide high-quality service and offer easy-to-understand products, these sales opportunities may be lost forever.
Introduction
CRM requires information. Financial Service Companies often share customer data in order to be able to serve their customers better. Customers of financial services companies obtain significant benefits from information sharing, including increased convenience, personalized service, and real savings of time and money. Ernst & Young estimated the benefits to customers of the 90 large banks, insurance and securities companies that are members of The Financial Services Roundtable (FSR). Based on publicly available industry data and a survey of the FSR membership, the findings are:
Trust and the Use of Information: U.S. customers provide information to their financial institutions because they trust them to protect that information and use it wisely. To the extent these companies share customer information with affiliates and/or third parties, the information sharing provides customers with more services at lower prices, and allows the companies to increase efficiency, lower costs, and pass savings forward to customers
Savings Per Household: Information sharing saves FSR members customers on average $195 per customer household per year. In addition, the average FSR household saves close to 4 hours per year because of convenience provided by information sharing.
Money Saved: For all customers of the FSR members, the current dollar savings due to information sharing total about $17 billion per year. About $9 billion of this total comes from information sharing with third parties, and about $8 billion is due to information sharing with affiliates. These estimates would be larger for the entire financial services industry.
Time Saved: In addition, information sharing saves FSR members customers about 320 million hours per year. About 115 million hours are saved because of information sharing with affiliates, and 205 million hours because of information sharing with third parties.
Sources of Benefits: Customers benefit from information sharing across a wide variety of services. They save money from outsourcing to third parties, relationship pricing, and proactive offers. Customers save time because of information sharing by call centers; internet based services, third party services, proactive offers and pre-filled applications.
Sources of Benefits
Sources of customer benefits from information sharing are as shown below-
FRAUD AND IDENTITY THEFT. Fraud detection techniques often rely on information sharing to identify anomalies. Sharing information makes it easer to contain