1.1 ‘Banking’ on CRM’
“Competition and globalization of banking services are forcing banks to be productive and profitable. To retain High Net Worth individuals, banks should focus strongly on relationship management with customers. Innovative Customer Relationship Management (CRM) strategies and cutting edge software can help, to a great extent, in achieving the desired results. To provide customized services, banks are opening Personalized Boutiques which provide all the required financial needs of a customer”. The entire service industry is now metamorphosed to become customer- specific. In this context, the management of customer relationship in financial services industry demands special focus. Gone are the days when customers at a bank did not mind the long serpentine queues and waited patiently for their turn with a token in their hand. In today’s Internet era, no one has the leisure to wait. In this context, online banking is assuming a great significance. Today, banking is more customer-centric, unlike the yester when it was transaction-centric. Banks are increasingly focusing on the premise that customers choose on the service provider who differentiates through quick and efficient service. However, there is more to Customer Relationship Management (CRM) than just managing customers and analyzing their behaviours. Banks are well aware that their success is predominantly dependent on the CRM strategies adopted by them. Service providers have recognized that good CRM bonds customers with the organization for a longer term, resulting in increased revenues. With customers’ expectations becoming even more competitive, banks are coming up with a wide array of novel products and services every day. The challenge is for the banks to work towards ensuring that customers prefer their products and services over that of competing brands. The key to develop and nurture a close relationship with customers is by appreciating their needs and preferences and catering to their requirements. Leveraging on IT, to appropriately analyze and understand the needs of existing customers better, to ensure customer satisfaction, and exploring the possibility of cross-selling products to gain a competitive advantage are the other issues drawing attention and interest. With the opening up of the economy, a number of private sector banks have joined the fray and are offering a plethora of products and services- rechristening themselves as ‘Financial Boutiques’. Knowledge dissemination has been propelled by electronic and mass media campaigns. Today’s knowledgeable consumer is challenging the Indian retail banking industry to redefine itself. Thus in this current competitive scenario, for a bank to survive competition, succeed and make profit, there is hardly any option but to learn from and actively respond to consumers’ needs. Banks offering retail products need to reorient their strategy from a product-centric to a customer-centric approach to attract and retain High Net Worth Individuals (HNI) and profitable customers as well. The battle of the banks, for gaining a greater slice of the market share, is taking on a new dimension. In the current falling interest rate scenario, banks are finding it increasingly difficult to meet the high growth expectations. In order to bolster their top lines, banks are in pursuit of newer ways and means of achieving organic growth through strategies that enable acquisition of new customers and retaining the loyalty of the existing customers. Success of a bank’s strategy towards customer acquisition will depend on its ability to develop customer insights and translate these into effective operating models. Ensuring a good customer experience at every customer touch point is the cornerstone of a successful growth strategy. A good customer experience will drive customer acquisition and promote customer retention, which translates into...
Please join StudyMode to read the full document