Crm in Banking Sector

Topics: Customer relationship management, Bank, Customer service Pages: 7 (2282 words) Published: January 26, 2011

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. 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. This paper deals with the role of Customer Relationship Management in banking sector and the need for Customer Relationship Management to increase customer value by using some analytical methods in CRM applications. CRM is a sound business strategy to identify the bank’s most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, repricing, discretionary decision making, and customized service-all delivered through the various sales channels that the bank uses.

Customer Relationship Management (CRM) is a customer-centric business strategy with the goal of maximizing profitability, revenue, and customer satisfaction. Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation. Technology to support CRM initiatives must be integrated as part of an overall customer-centric strategy. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy. In literature, many definitions were given to describe CRM. The main difference among these definitions is technological and relationship aspects of CRM. Some authors from marketing background emphasize technological side of CRM while the others consider IT perspective of CRM. From Marketing Aspect, CRM is defined by [Couldwell 1998] as “.. a combination of business process and technology that seeks to understand a company’s customers from the perspective of who they are, what they do, and what they are like”. Technological definition of CRM was given as “.. the market place of the future is undergoing a technology-driven metamorphosis” [Peppers and Rogers 1995]. Consequently, IT and marketing departments must work closely to implement CRM efficiently. Meanwhile, implementation of CRM in Banking Sector was considered by [Mihelis et al. 2001]. They focused on the evaluation of the critical satisfaction dimensions and the determination of customer groups with distinctive preferences and expectations in the private bank sector.

The idea of CRM is that it helps businesses use technology and human resources gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can: ➢ Provide better customer service

➢ Make call centers more efficient
➢ Cross sell products more effectively
➢ Help sales staff close deals faster
➢ Simplify marketing and sales processes
➢ Discover new customers
➢ Increase customer revenues
It doesn't happen by simply buying software and installing it. For CRM to be truly effective an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. Next, the organization must look into all of the different ways information about customers comes into a business, where and how...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Crm Banking Sector
  • Crm in Banking Sector Essay
  • Essay about CRM in Banking
  • Crm in Banking Essay
  • Role of CRM in Banking Essay
  • Essay on Netsuite Crm for the Banking Sector
  • “Role of Crm in Telecom Sector” Essay
  • Crm at Retail Sector Essay

Become a StudyMode Member

Sign Up - It's Free