CRM in Banking Sector with special reference to New Age Banks | Open Access Journals
A selected three private sector banks- ICICI, HDFC and Axis Bank. The cross . Customer Relationship Management emerged as a core banking activity for. is about Customer Relationship Management at HDFC Bank. DATA COLLECTION The objectives of the project are such that both the. 2 HDFC Bank Customer Relationship Manager interview questions and 2 interview reviews. Free interview details posted anonymously by HDFC Bank interview.
In correlation with the growth of the economy, rising income levels, increased standard of living, and affordability of banking products are promising factors for continued expansion. Players are becoming increasingly customer - centric in their approach, which has resulted in innovative methods of offering new banking products and services. This is as an aftermath of the sudden interest shown by Reserve Bank of India paving roadmap for foreign banks in India greater freedom in India.
The following are the list of foreign banks going to set up business in India: Since its inception inthe Corporation has maintained a Consistent and healthy growth in its operations to remain the market leader in mortgages.
Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities.
With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. Today, the Bank is proud to say that it is well on its way towards that goal.
It operates in three segments: Retail Banking, Wholesale Banking, and Treasury. The Retail banking segment provides various deposit products, including savings Accounts, current accounts, fixed deposits, and demat accounts. It also offers Auto, personal, commercial vehicle, home, gold, and educational loans; loans Against securities and property and health care finance Working capital finance, construction equipment finance, and warehouse Receipt loans, as well as credit cards, debit cards, depository, investment Advisory, bill payments, and transactional services.
In addition, this segment Sells third party financial products, such as mutual funds and insurance, as Well as distributes life and general insurance products through its tie-ups with insurance companies and mutual fund houses.
The wholesale banking Segment provides loans, non-fund facilities, and transaction services to large Corporate, emerging corporate, small and medium enterprise, supply chain, Public sector undertaking, central and state government departments, and Institutional customers.
It offers deposit and transaction banking products, Supply chain financing, working capital and term finance, agricultural loans, and funded non-funded treasury, and foreign exchange products.
In addition, it provides correspondent bank services to co- operative banks, private banks, foreign banks, and regional rural banks. The Treasury Services segment operates primarily in areas, such as foreign exchange, money market, interest rate trading, and Equities. The company was founded in and is based in Mumbai, India. Against the regulatory approvals for new branches in hand, the Bank expects to further expand the branch network by around branches by June 30, During the year, the Bank stepped up retail customer acquisition with deposit accounts increasing from 6.
Portfolio quality as of March 31, remained healthy with gross nonperforming assets at 1. After the policy of liberalization and RBI initiatives to take the step for the private sector banks, more and more changes are taking the part into it. That are create competition between the private sector banks and public sector bank. Private sector banks are today used the latest technology for the different transaction of day to day banking life. As we know that Information Technology plays the vital role in the each and every industry and gives the optimum return from the limited resources.
Banks are service industry and today it gives the innovative Technology application to Banking industries. New technology changed the mind of the customers and changed the queue concept from the history banking transaction. Today there are different channels are available for the banking transactions. This type of technology gives the freedom to retail customers.
New private sector banks to withstand the competition from public sector banks came up with innovative products and superior service. The objective is to build sound customer franchises across distinct businesses so as to be a preferred 25 provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk appetite.
Bank is committed to do this while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. Continue to develop new product and technology is the main business strategy of the bank.
Maintain good relation with the customers is the main and prime objective of the bank. They use some technique and methodology for smooth running of business. It is excellent way to free up valuable floor space. That means it identify, organize and arrange retrieval. It largely focuses on good labeling and identification practices. It brings in the sense of ownership.
It involves standard rules and policies. It establish checklist to facilitate autonomous maintenance of workplace.
It assigns responsibility for doing various jobs and decides on Five S frequency. Sustain means regular training to maintain standards developed under S It brings in self- discipline and commitment towards workplace organization. Due to this everyone aware about their particular color file which is coding on it and they save their valuable time.
Logic behind it that, the color coding is always differentiating the things from the similar one. Total number of employees increased from as of March31, to as of March 31, The Bank continues to focus on training its employees on a continuing basis, both on the job and through training programs conducted by internal and external faculty. The Bank has consistently believed that broader employee ownership of its shares has a positive impact on its performance and employee motivation.
And balanced between these two things rupee earned and rupee spent are required for smooth running of business and financial soundness. This type of watch can control and eliminate the unnecessary spending of business. In this diagram it include both things from where Bank earned Rupee and where to spent. These are the major earning Sources of the bank.
Bank also earned from the Forex and Derivatives and some other Interest Income.Relationship Manager
As we discuss above that balancing is must between these two for every organization especially in the era of globalization where there are stiff competition among various market players. The balance sheet size of the combined entity would be over Rs.
The shareholders of the Bank approved the issuance of one equity share of Rs. This is subject to receipt of Approvals from the Reserve Bank of India, stock exchanges and other requisite statutory and regulatory authorities. The Shareholders of the Bank have also approved an increase in the authorized capital from Rs.
Promoted in by Housing Development Finance Corporation HDFCIndia's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services to its over 11 million customers across hundreds of Indian cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking.
Within a relatively short span of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments. The bank's competitive strength clearly lies in the use of technology and the ability to deliver world-class service with rapid response time. Over the last 13 years, the bank has successfully gained market share in its target customer franchises while maintaining healthy profitability and asset quality.
As of March 31, total deposits were INR Total balance sheet size too grew by Leading Indian and international Publications have recognized the bank for its performance and quality. The bank serves individual consumers, small and medium businesses and large corporations with a full range of financial products and services for investing, lending and advice on financial planning.
The bank is also a strong player in foreign exchange services, personal loans, mortgages and agricultural loans. This merger has further strengthened the geographical reach of the Bank in major towns and cities across the country, especially in the State of Kerala, in addition to its existing dominance in the northern part of the country. Centurion Bank of Punjab now operates on a strong nationwide franchise of branches and ATMs in locations across the country, supported by employee base of over 7, employees.
Required to address these issues: Research problem is the one which requires a researcher to find out the best solution for the given problem that is to find out the course of action, the action the objectives can be obtained optimally in the context of a given environment. A good research design lays the foundation for conducting the project. A good research design will ensure that the research project is conducted effectively and efficiently.
Typically, a research design involves the following components, or tasks: So both primary and secondary data was used for the project. The primary data was collected to measure the customer satisfaction and their perception regarding HDFC Bank. The primary data was collected by means of questionnaire and analysis was done on the basis of response received from the customers.
The purpose of collecting secondary data was to achieve the objective of studying the recent trends and developments taking place in banking. Sample size — customers were selected.
Analysis and Interpretation After the data collection, it was compiled, classified and tabulated manually and with help of computer. Then the task of drawing inferences was accomplished with the help of percentage and graphic method.
What are reasons that attract you to be a customer of the bank? From the above graph it is clear that majority of the respondents i. From the above graph it is clear that majority of the respondents are aware of products and services offered by HDFC Bank i. Do you know about these following services of the bank? Which of these services are you using?
Which of these services are you further interested in? Which service of the bank would you rate the best? Do you know about the Extra services being provided by the bank? Which of the following Extra service of the bank would you like to go in for?
What is your perception about the service of the bank? Are you satisfied with the dealing of the bank officials? Any problem you are facing regarding the bank? How likely are you to recommend Bank services to a friend or colleague? What is your overall satisfaction rating with our bank? But not all the services. The new CRM approach, while recognizing these key elements still need to be addressed, reflect the need to create an integrated cross functional which focus on marketing — one which emphasizes keeping as well as winning customers.
Thus the focus is shifting from customer acquisition to customer retention and ensuring the appropriate amount of time, money and managerial resources are directed towards these tasks. Successful ownership will create competitive advantage, which result in improved customer retention and profitability for the company.
HDFC Bank Employee Reviews for Project Manager
Margins are shrinking, competition is increasing and industries are consolidating. While customer expectation intensify for quality, service and delivery, businesses are reducing staff and the same time searching for ways to arm employees with information to make better decisions and innovate. Customer is the most important asset in businesses. The concept of CRM as a strategy reflects the business process and technology that can be combined to optimize revenue, profitability and customer royalty.
The CRM market is evolving rapidly and is one of the fastest growing market segments in application software. CRM has captured the mind share of senior executives across a variety of industries.
With a rapid growth of E-customer applications and the increasing need to sell to and support customers through Internet, CRM solutions must provide a focal point for all the customers- facing activities across the channels. The effective use of CRM principles requires a three-pronged approach. First, all CRM efforts should begin with a well-defined strategy. Second, an infrastructure must be developed to achieve appropriate objectives. Specifically, the infrastructure should align product and sales goals to meet customer needs, according to their preferences, in the most cost-efficient manner.
Third, continuous analytic intelligence should be used to determine and modify customer interaction. In addition to the above approach, implementing CRM involves collecting and reviewing the most relevant customer data.
Relevant customer data can uncover needed information about behavior patterns and attitudes. Once identified, the customer data should be incorporated into the infrastructure so that effective marketing plans can be developed. The execution of marketing plans is driven both by analytic insights obtained about customers and by any existing marketing communication plans. After appropriate customer data analysis and marketing plan development is complete, the multi-channel customer contact strategies can be implemented within the CRM technology infrastructure.
A firm can use this customer equity to improve its growth and profitability prospects during economic downturns and upturns. Just as a squirrel buries nuts in anticipation of winter, a smart business will build customer equity during good times in order to produce more business during bad times. More resources should be used to market relevant products and services to these MVCs while fewer resources should be expended on unprofitable customers.
CRM in Banking Sector with special reference to New Age Banks
The goal is to make the right offer to the right customer at the right time. Such customer knowledge can immediately and significantly reduce total cost while, at the same time, increase sales with individual customers. This strategy enables an organization to anticipate greater returns from its campaigns, a reduction in costs, an increase in conversion rates, and more one-to-one communication initiatives.
For each customer behind the picket fence, there is a particular objective and a strategy for achieving that objective by the management team. In an upturn economy, business strategies should involve growth. This includes acquiring new customers and increasing the number of current customers. In a downturn economy, business strategies should involve harvesting.
Harvesting implies that an organization gets the most from every existing relationship by selling more to current customers. The concept of harvesting is sometimes referred to as cheap growth. By becoming truly customer-centred, a bank or financial organization can achieve the following benefits: These systems facilitate account opening, balance maintenance, and support a monthly or periodic statementgenerating process.
However, these legacy systems lack the capabilities to manage and grow MVCs because their sole objective is to service the transaction activity of an account. Building an intelligent Customer Information System CIS is the fundamental first step required to manage customer equity in this scenario. The focus of the CIS should be to collect, store, and maintain the following types of information on the customers in a data warehouse: Instead of mining layers upon layers of customer transactional and lifestyle data for knowledge nuggets, KDDs establish a set of flexible knowledge-required algorithms.
The available data is then searched to find any exceptions. Many existing CIS tools are very limited in scope, and do not support customer equity management. Technology solutions sold by vendors have become very complex to use, expensive to maintain, and contain irrelevant information for data mining. Most of the existing data warehouses lack information on recency, frequency, and monetary values.
They also offer information that is insufficient for supporting predictive modelling and predictive scoring.
Business Software used by HDFC Bank
The addition of new capabilities to existing data warehouses is cost prohibitive and takes a long time to bring into production stage capabilities or even to catch up with the fast-changing dynamic nature of the market place. Over the years, many major financial organizations have developed data warehouses by purchasing diverse sets of software tools and then building data warehouses in-house. For example, Data Quality and Cleansing tools, Extract Transform Load ETL tools, database management and storage tools, data mining, and campaign management solutions from various vendors.
Information technology organizations have had to employ individuals who have specialized vendor product skill sets to support multi-vendor tools. This can increase organizational expenses significantly.
Banks could improve the profitability by adopting strategies like market segmentation, innovation, price bundling and relationship. Technology has a major role to play in retail banking, but its role is complementary to customer service initiatives. Due to increased financial market products like commercial paper and variety of financial instruments, big corporate clientele of several commercial banks have shifted their loyalty, and have been raising resources from the market directly and commercial banks have become more retail customer-centric by offering wide range of services.
Banks have identified new customer segments like students, workingwomen, and high rich net worth individuals. In the era of cut throat competition globally as well as locally, Data Mining is used by almost all the proactive corporations and organizations to build and manage customer relationships. Data Mining helps to retain the customers by understanding and fulfilling their needs proactively and thus delighting them in the long run.
Earlier it was very difficult to understand and manage the data. Data Mining Data mining is the principle of sorting through large amounts of data and picking out relevant information.
It is usually used by business intelligence organizations, and financial analysts, but it is increasingly used in the sciences to extract information from the enormous data sets generated by modern experimental and observational methods. The Internet and technology opens up a wealth of information 24 hours a day, seven days a week, thereby heightening the transparency of the markets. Customers use the Internet to quickly shop around and see what competitors can provide.
As a consequence, the attention span of customers has decreased, and customer loyalty is subject to new laws. Customers are looking beyond products to assess whether the overall solution you provide addresses their individual needs and priorities.
Technology has also paved the way for a new dimension of customer relationship management. The falling costs for computing power and the arrival of new software tools for capturing and analyzing mass data have provided the main thrust behind the increase in importance of analytical solutions in general. Powerful hardware and software give better ways than ever before to understand and leverage customer relationships. Data mining is one of the technologies which provide analytical ability to the organizations for leveraging on customer relationships and thus customer loyalty and this paper analyzes the potential of data mining for building and managing better relationships.
META, Data Mining uses a variety of techniques to find hidden patterns and relationships in large pools of data and infer rules from them that can be used to predict future behavior and guide decision making. To use data mining effectively for managing customer relationships the data must be categorized in some manner if it is to be accessed, reused, organized, or synthesized to build a picture of the organization's competitive environment or solve a specific business problem Pearlson,p.
Customer relationship Management form a learning relationships with the customers by noticing their needs with the use of online transaction processing i. There may be number of channels by which company interfaces with its customers for example direct mail, Email, telemarketing etc.
Analytical CRM Laudon, includes applications that analyze customer data generated by operational CRM applications to provide information for improving business performance management. Data Mining is defined as exploration and analysis of large quantities of data by automatic or semi-automatic means to discover meaningful patterns and rules and these patterns allow a company to better understand its customers, improve its marketing, sales, and customer support operations.
Berry and Linoff, The process of extracting hidden key information from a large pool of available data is data mining.
Advanced statistical tools are used in data mining to understand current behaviour and to predict future behavioural patterns. Mathematics, genetics, cybernetics and other fields of research make extensive use of data mining. In CRM, Web mining pertaining to Web-related information is used to gain insights into customer behavior. Interesting little poll over on KD Nuggets today - readers were asked where they had applied data mining in the last 12 months. The top 5 were CRM Customer Relationship Management CRM can be defined as the process of predicting customer behavior and selecting actions to influence that behavior to benefit the company Jenkins,usually leveraging on information technology and database-related tools.
CRM initiatives usually seek to fulfill several objectives. One of the objectives is to get closer to the customer by utilizing the data "hidden" in scattered enterprise databases. Examining and analyzing the data can turn raw data into valuable information about customer's needs. By predicting customer needs in advance, businesses can then market the right products to the right segments at the right time through the right delivery channels.
Customer satisfaction can also be improved through more effective marketing. Another objective of the CRM initiative is to transform the company into customer-centric organizations with a greater focus on customer profitability as compared to line profitability. The insights gained from CRM enable companies to calculate or estimate the profitability of individual accounts.
Other CRM objectives include increased crossselling possibilities, better lead management, better customer response and improved customer loyalty Chin, At present there are five functional categories for online banking sites — on line brochure centre, interactive bank, e-mails, calculations and cyber banks, which offer customers access to account information, inter-branch funds transfer and utility bill payments. Banks have tied up with service providers in telecom and power sectors like MTNL, BSES and cellular service providers for allowing their customers to make bill payments online.
The bank has viewed advanced information technology as a managerial and competitive tool and has tried to harness technology to the maximum possible extent to deliver superior customer services. B2B solutions i-payments aim at facilitating online supply-chain management to it corporate clients by linking them with their suppliers and dealers in a closed business loop.
All members in this loop are required to maintain the account with the bank. This product has gained considerable market acceptance and the bank has already entered into memorandum of understanding with over large Indian companies. The Bank became the first bank in India to introduce utility bill payment through Internet. Also one can intimate about the loss of an ATM card over the net when using Infinity. Corporate sector can issue letter of credit and make inquiries regarding bills sent for collection via this service.
It also provides facility for nicknaming all accounts to avoid remarking lengthy accounts number. UTI bank has tied up with Cosmat Max, to create a communication network for its customers. The network will have VSAT terminals at strategic locations, which will help in ATM servicing and internal management information system.
The bank has signed a memorandum of understanding with equitymaster. This will enable the bank to leverage its database for e-commerce and other initiatives with data-warehousing and data-mining, where information of the customer spending habits will be used to sell other co-related products like credit cards.
HDFC Bank has, for the first time in India made the e-shopping experience secure online and real time with the launch of its payment gateway. The bank has tied up with 15 portals and is in talk with several others to offer secure business to customer e-com, credit card transactions. The first secure, on-line and realtime e-com. HDFC Bank also offers a direct debit option whereby its customer can pay for the goods or services by a secure password enabled transfer of funds from their account to the merchant account.
E-CRM Techniques used by Banks in India Banks leveraging technology can develop innovative customer solutions to attain growth with profitability within the framework of sound risk-management practices.
Technosavvy banks are tapping into online services to initiate a new era in relationship management to create one to one relationships as well as one too many relationships to enhance their competitive advantage. Recent developments in critical areas of IT have changed the way banks are managing their customer relationships.
The following are some of the latest e-CRM techniques used by banks in offering new products and services to its customers. The banking services are provided through Net with convenience of ease and accessibility. Internet banking offers many benefits to the banks viz. Data Warehousing and Data Mining This technique is used to develop and use customer data to check their profile, retention and loyalty patterns.
They provide valuable inputs for retaining customers and developing products and services for the future. Most of the demand for this technology is coming from State owned banks.
Until now, ATM services have been confined to deposits and withdrawal from bank accounts by customers. The growth in ATMs has been fuelled by a race among banks to expand their customer base by going in for more value added services bill payments and ticketing services on these machines.
Telebanking or Mobile banking These services empower the customer with an instant access to routine queries and transaction or check bank balances. Computerized decision support system This helps the banks in applying optimization techniques in functional areas such as, asset—liability management, optimization of investment portfolios and asset portfolios through linear programming. This is a practical tool which helps the bank managers and customers in optimizing investment decisions.
E-mail Banks can maintain the list of its best customers and inform these members through Email the various services and schemes offered by the bank.
These days this is considered as one of the cheapest and effective means of communication. Computer networking Networking between the branches of divisional, regional, zonal and head office of banks provide access to customer data base from the executive desk. This will integrate the front-office applications with back-office requirements, thus generating MIS for branch managers and executives at the different controlling offices including Head office for accurate, speedy and cost-effective customer services.
Customer smart cards These cards are issued to key customers which carries all the relevant information, details of previous and repeat purchases, to make it convenient for the customers to recall and for the banks to keep a track of the behavioural and purchase trends. Analytical CRM Analytical CRM aims at storing, analyzing and applying the knowledge about ways to approach customers, typically using data mining. Analyzing customer relationships from a lifetime perspective is critical for success.
By employing analytical CRM analytics, businesses stand to gain a fuller understanding of their customers in order to serve them better, thus increasing customer longevity and generating more profit. Analytical CRM is the active collection, concentration and analysis of data gathered about the customer and his interactions with the business. Widening the relationship with customers by acquiring new and profitable customers To widen your customer relationships, Data mining can answer questions like: Customer acquisition is the number one issue for small company marketers.
As corporations increase budgets to attract and obtain new customers, data mining becomes a critical tool for profiling good customers, performing market segmentation, and improving the results of direct-marketing campaigns. The number of campaigns that can be managed in a given time period is often much lower than what the business demands.
Data mining solves these problems by putting tools in the hands of the marketers driving these campaigns -- it keeps control where the need is. As a result, marketers can be much more responsive to creating new campaigns and can implement a direct feedback loop to improve their efforts on a regular basis.
Lengthening the relationship with your top customers by targeting existing resources and strengthening the foundation of those relationships To lengthen your customer relationships, Data mining can answer these questions: This retention is also a major issue for all businesses.