Indian Banking Industry_Anit

7/29/2019 Indian Banking Industry_Anit

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Presentation Flow

Indian Banking Overview

Introduction

Evolution

Current Banking Structure

Business Segment

1

Illustration of CRM in Indian Retail Banks Case Study: HDFC Bank

Case Study: ICICI Bank4

Customer RelationshipManagement 2

CRM as a Business Strategy

Phases in CRMCRM in Banking Sector

3 Key Business Requirements in CRM

Historical Evolution of CRM in Banking Sector

CRM in Retail banking: Current Trends and Dynamics

Final CRM Best Practices Scale


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BANKING SECTOR OVERVIEW

1990-91 2011-12

CAGR growth

of18%

Key Highlights

Backbone of the countrys economy Between 2000 2010, Total Assets increased 5 times

from US$250 billion to more than US$1.3 trillion

General Bank of India, established in 1786, was the First

Bank in India now defunct

Bank of Bengal which later became the State Bank of India

State Bank of India, established in 1806, is the oldestbank to be still in existence

Today there are 26 Nationalized Bank and 17 private

sector banks in India

Evolution of Indian Banking Industry

Initial banks in India were primarily traders banks

engaged only in financing activities

Over the years, immense developments have been

made in terms of the regulations, ownership structure,

products and services offered and the technology

deployed

Evolution of Indian

Banking Industry

Current Indian Banking

structure


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Customer Relationship

Management


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What is Customer Relationship Management?

Understand

Anticipate

& Manage

CustomerRelationshipManagement

BusinessStrategyT

o

theneedsofan

organizations

current

and

po

tentialcustomers

It is a comprehensive approach

which provides seamless

integration of every area of

business that touches the

customer- namely marketing,

sales, customer services andfield support through the

integration ofpeople, process

and technology

CRMentails all aspects of interaction that a

company has with its customer, whether it is sales

or service-related. CRM is often thought of as a

business strategy that enables businesses to:

Understand the customer

Retain customers through better customer

experience

Attract new customer

Win new clients and contracts

Increase profitably

Decrease customer management costs


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CRM - What the experts say?

PWC , Bain & Co. says Impact on Profit by CRM

2% increase in customer retention = 10% reduction in overheads 5% increase in customer retention = 25 % increase in Profit of Banks

A study by Woodstock(2000) proved a correlation of0.80

Customer Management = Business Performance

Simns (2003) - CRM reduces attrition by 25%, helps spend less onacquiring new customers

Zeithaml et al (2006) CRM provides social benefit

Customers develop a social relationship with their service providers


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Components and Process of CRM

Customer managementorientation.

Integration and alignment

of organizational processes

Information capture andalignment of technology

CRM strategyimplementation

Components of a successful CRM

strategy The CRM process model

Develop customerstrategy

Set customer objectives

Assess organisationalreadiness

Align organisation behindgoals

Execute CRM programs andmeasure programeffectiveness


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Gartner-3 steps for successful CRM

Know Where You Are Going

Audit Your Current Status

Map Your Way


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Customer Relationship

Management in Banking Sector


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CRM in Banking Sector

For more than 200 years, banks were using branch based operations

Technology has now revolutionized the banking sector with the advent of ATM, online banking,

debit/credit cards, Mobile Banking etc.

In recent years, banks have moved towards marketing orientation and the adoption of

Relationship Banking principles

Customer service became the only major differentiator in many cases. Companies realized the

need to focus on enterprise customers. The advent ofe-CRM applications was the first big step

toward providing better support to strategic business customers.

Key motivators for embracing CRM principles

in banking industry:

Intense Competition

Well Informed Customers

Decline in Brand loyalty


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CRM in Banking Sector Trends and Dynamics

As banks strive to create and manage customer relationships, several emerging trends

affect the approach and tools banks employ to achieve sustainable growth.

These trends reflect a fundamental change in the way banks interact with

the customers they have and those they want to acquire.

Trend 1 : Focusing on organic growth

Trend 2 : Creating deep business insight into

customer preferences

Trend 3 : Responding to intensifying

competition through revitalized offerings

Trend 4 : Improving distribution and channel

management

Trend 5 : Safeguarding customer information

The above trends in Indian Banking industry have helped in shaping the CRM practices

of our banks and these are continuously evolving based on the dynamic nature of these

trends and competition


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Research Findings CRM Best Practices inIndian Banking Industry byEuropean Journal of Social Sciences(2009

As per the research, following dimensions broadly define the Best Practices

scale in Indian Banking Industry :

Key Customers

Bank Provides customized services and

products to our key customers

Strives to constantly surprise and delight ourkey customers

Co-branding / Affinity partnering programs to

provide increased value to our customers

CRM Organization

Top mgt. accepts and provides leadership for

building and maintaining customer

relationships as a major goal of the bank.

CRM responsibilities of frontline employeesclearly defined, assigned and understood

Knowledge Management

Customer and employee feedback is taken

using a variety of direct and indirect measures

Bank has a well-developed privacy policy to

ensure confidentiality of data collected from

customers

Does customer segmentation using

Customer Lifetime Value (CLV)/ related metrics

Technology-based CRM

Bank uses technology to automatemarketing, sales, and service functions

Information systems are designed to give

comprehensive data about all aspects of

customers, so as to increase responsiveness

Our CRM software provides for integration of

touch points to obtain a single view of thecustomer at every point of customer contact

Delivers a consistent customer experience

across all customer touch points / encounters


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Illustration of CRM in Indian

Retail Banks


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Case 1: CRM Implementation in HDFC Bank

HDFC Bank is a leading provider of loans, liability accounts and third party products with

various over-the-counter products

The bank also has personal banking, investment advisory and wealth management

services

It has 2544 branches and over 6000 ATMs in 1399 cities/ towns of India.

HDFC Bank has implemented a revolutionary CRM solutions package

called CRMnext which helped it immensely in achieving seamless integration across multiple

transaction points and achieve customer delight.

HDFC Bank uses CRM to

achieve its One Bank vision,

boosting profit and customer

satisfaction


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Case1: HDFC Bank - Before/After CRM implementation

Before:

1) There was no single 360

customer view for the

employees

2) Low visibility and

challenges in monitoringall the customers

3) Low visibility of

information to create

opportunities

After:

1) Customer insight byintegration with datawarehouse and othercore bankingapplications.

2) Consolidation andstreamlining ofprocesses acrossfunctions and products.

3) Intelligent segmentationof customers.


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Case1: HDFC Bank Benefits of CRM implementation

Customer base as on Dec'2012 has witnessed a

whopping jump of 150%

Assets business grew by 100% over 2008 levels

Number of leads captured per month from Sept-2010 to

March 2012 increased by 275%

Service Quality Rating improved from 65% in 2007-08 to

97% in 2011

Number of personalized offers surfaced on monthly

basis increased significantly from Mar 2001- Nov 2011


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Case 2: CRM Implementation in YES Bank

Private sector bank present across all major cities in India

Aims at providing quality, customer centric service to the Future

Industries of India

Yes Bank was established in 2004 with financial support from

Robobank Netherlands

It provides knowledge banking services such as Corporate Finance,

Business Banking, Retail Banking, Investment Banking, FinancialServices, and Transaction Banking

Awarded the Most Innovative Bank award in India


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Case2: YES Bank - Before CRM implementation

1. It needed to cope with an increasing volume ofmultichannel interactions with the customers

2. It wanted to adopt business automation to

improve sales turnaround time, reduce manualdata entry and increase speed of the process

3. The customer care department required anefficient Help Desk Management System where the

calls and complaints could be logged in andautomatically assigned to relevant employee forresolution with automated escalations

Challenges


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Case2: YES Bank CRM implementation

The CRM adopted by YES bank includedfollowing modules:

1. Sales and Leads Management

2. Personalized Dashboards with Activities Planner

3. Help Desk4. Marketing Management

5. Document Management

InfoAxon used its Agile and Iterative

development methodologies to enhance theexisting CRM


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Case2: YES Bank Benefits of CRM implementation

1. Drastic Improvement in customer acquisition

2. Customer Service improved by 60% and

turnaround time for its processes by almost 70%.

3. Helped achieve greater service excellence,

capturing all customer queries, complaints and their

feedback into the common system

4. It helped the Bank understand its customer better

which resulted in better customer retention

5. Product sales substantially surged after the

implementation.


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Appendix


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Appendix 1: Evolution of Indian Banking Industry


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Appendix 2: Current Structure of Indian Banking Industry

Indian Banking Industry_Anit

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