Indian Banking Industry_Anit
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Transcript of Indian Banking Industry_Anit
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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