Customer Relationship Management Assignment on CRM practices in Bank of India and ING Vysya Bank

SUBMITTED TO: Prof. Reeti Agarwal

SUBMITTED BY: Feroz Ahmad (JIML-11-057) Ankit Pandey (JIML-11-021) Ashish Saxena (JIML-11-39) Bhola Bhakta (JIML-11-FS-021) (Section B) Date: 29 September, 2012

ACKNOWLEDGEMENT
We are grateful to our respected faculty prof. Reeti Agarwal for giving us an opportunity to understand the analysis of CRM practices in banking sector. Through this project we got to learn that how to look at the problem from a Managers perspective. We would like to present our gratitude to Reeti Mam for the successful completion of the project which would not have been possible without her constant help and guidance.

Bank of Baroda is an Indian bank based in Vadodara, India. It is the country's first largest public sector lender in terms of annual profit. BoB is ranked 715 on Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh crores, or Rs. 3,583 billion, a network of 4007 branches (out of which 3914 branches are in India) and offices, and over 2000 ATMs. It plans to open 400 new branches in the coming year. It offers a wide range of banking products and financial services to corporate and retail customers through its delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management. Its total global business was Rs. 6,722.48 billion as of 31 March 2012. Its headquarter is in Baroda and corporate headquarter is in Bandra Kurla Complex Mumbai. In its international expansion, the Bank of Baroda followed the Indian diaspora, especially that of Gujaratis. The Bank has 93 branches/offices in 24 countries including 55 branches/offices of the bank, 36 branches of its 8 subsidiaries and 2 representative offices in Thailand and Australia. The Bank of Baroda has a joint venture in Zambia with 16 branches. Among the Bank of Barodas overseas branches are ones in the worlds major financial centers (e.g., New York, London, Dubai, Hong Kong, Brussels and Singapore), as well as a number in other countries. The bank is engaged in retail banking via the branches of subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The bank plans to upgrade its representative office in Australia to a branch and set up a joint venture commercial bank in Malaysia. It has a large presence in Mauritius with about nine branches spread out in the country. IndiaFirst Life Insurance Company is a joint venture between two of Indias public sector banks Bank of Baroda (44%) and Andhra Bank (30%), and UKs financial and investment company Legal & General(26%).[1] It was incorporated in November 2009 and has its its headquarters in Mumbai.[1] The company started strongly, achieving a turnover in excess of Rs. 200 crores in in its first four and half months, and being recommended for ISO certification within 7 months. In 2011, BoB opened an Electronic Banking Service Unit (EBSU) was opened at Hamriya Free Zone, Sharjah (UAE). It also opened four new branches in existing operations in Uganda, Kenya, and Guyana. BoB closed its representative office in Malaysia in anticipation of the opening of its consortium bank there. BoB received In Principle approval for the upgrading of its representative office in Australia to a branch.

CRM Practices in Bank of Baroda

Technology-based CRM Technology plays the role of enabler in CRM deployment and allows Bank of Baroda to achieve greater customization and better service at lower cost that helps in better customer identification and fast and convenience services to its customers.

Customer Loyalty Programs Bank of Baroda has an aim to be a customer centric organisation and build a favorable and long term relationships with its customers. Loyalty has both an attitudinal and behavioral dimensions to adjudge the customers based on their value and attachment with the bank. Behavioral loyalty will include examples like maintaining long term relationship with bank, word of mouth, etc while attitudinal loyalty will comprise examples like trust or emotional attachment. Further, behavioral loyalty does not necessarily reflect attitudinal loyalty, thus, Bank of Baroda focuses on attitudinal loyalty through its various loyalty programs, marketing communications to emotional touch the target customers because loyalty leads to more business and increase in bottom line of the bank. It has four loyalty cards based on value of the customers such as Platinum, Gold, Silver and Bronze. It helps in identifying the most valuable customers and plans the different offers, schemes and services as per their needs and preferences. Data Warehouse and Data Mining The Data warehouse is the core of any decision support system and hence of the CRM. In implementing its Data Warehouse Bank of Baroda has selected an incremental approach, where the development of information systems is integrated with the business strategy. Instead of developing a complete design of a corporate Data Warehouse before implementing it, the bank has decided to develop a portion of the Data Warehouse to be used for customer relationship management and for the production of accurate and consistent management reports. Here the bank is not concerned with the latter goal, but are concentrating on the former. The Data Warehouse has been designed according to the IBM BDW (Banking Data Warehouse) model that has been developed as a consequence of the collaboration between IBM and many banking customers. The model is currently being used by 400 banks worldwide. Bank of Baroda Data Warehouse is regularly populated both from operational systems and from intermediate sources obtained by partial pre-processing of the same raw data.

CRM Practices from Customer Perspective

Since when you are having an a/c in your current bank?

more than 4 year 32% Less than 1 Year 8% 1-2 yr 16% 3-4 yr 16% 2-3 yr 28%

The above graph shows that 32% of total respondents are having their a/c with Bank of Baroda for more than 4 years, 28% are for 2-3 years and 16% for both 1-2 year and 3-4 years. Thus, it shows that Bank of Baroda is doing well and is able to retain its customer through its various attractive services.

Please tick the services you avail of your current bank

Internet banking 11% Current A/c 6% Loan 5% Credit card 22% Demat A/c 5% Mobile banking 0%

Saving A/c 39%

Fixed Deposit 12%

We can infer from this figure that a large no of 39% respondents are having the core facility of the bank i.e. saving a/c and 22% are also using credit card of the bank. All the other facility such as demat a/c, current a/c, loan and internet banking is being used by very small portion of respondents of 5%, 6%, 5%

and 11% respectively. A drawback can be easily identified that none of the respondents are using mobile banking facility, thus, Bank of Baroda should come up with many attracting features to encourage mobile banking.

Please rate the following services of your current bank from 1 to 5 (Least to Most).
14 12 10 8 6 4 2 0 Loaning Bank A/c ATM services Internet banking Mobile Credit card banking Demat facility Locker facility 5 4 3 2 1

The above graph shows that ATM services, credit card, bank a/c and specially locker facility is rated high most by large no. of respondents. Locker facility is generally not considered by most of the customers but Bank of Baroda is doing well in this category, thus, it should be strengthening this facility and should make available to large customers. Internet banking, mobile banking and demat a/c are rated lower by many respondents, thus, company should be extending its strength to this new generation facilities.

Please rate your satisfaction level with your current bank.

Dissatisfied 12% Average 4% Highly dissatisfied 0%

Highly satisfied 16%

Satisfied 68%

The most important aspect for any organisation is to be rated high on satisfaction level by its customers. Here, the graph reflects that 68% of respondents are satisfied with Bank of Baroda and even 16% are highly satisfied. Only 12% are dissatisfied and the best part is that none of the respondents felt highly dissatisfied with the services of the bank. Thus, company should also focus on this 12% dissatisfied because dissatisfaction leads to increase in dissatisfied customers.

Do you have any complaints regarding your bank?

No 44%

Yes 56%

It can be clearly see that 56% of respondents do have complaints regarding bank besides they are satisfied with bank and only 44% feels that they would not complain regarding services of the bank. It generally happens when customers do have complaints and do not want to switch to other service provider due to their loyalty towards the bank. They want to stay with the bank and desire to get resolution to their problems. Therefore, Bank of Baroda should effective handle the complaints of its customers to make them satisfied and un-complained. It should also provide some convenient complaint system and effective resolution of those complaints.

Please tick the area where you have complaints.

Wrong transaction 3%

Rude behavior of Insecure services employee (mobile, internet 13% banking) 19% Disrupti on in service 9% Unresponsiveness of employee 21%

Non-upgraded services 4%

Delay in service delivery 31%

The above areas are the general area of complaints by many customers. Here, 31% of the respondents believe that they do not get their service on time and there happens delays in delivery of services that leads to high waiting time for customers. Waiting time is always unproductive for customers as well as bank because it is also loss of opportunity and may also lead to switching of customers to competitors. Among all the respondents 21% feels that the employees of the bank do not proactively response their queries and complaints and 13% of respondents have also experienced that employees were rude to them while interacting. These two aspects are related to behavior of employees that may influence a customer to be loyal and may also spoil the long term relationship with the bank in a while. Thus, the bank should conduct some soft skill training to make the employees behave with customers in a good manner. Moreover, 19 % responses were about insecurity in digital banking such as internet and mobile banking and that is why most customers do not use these facilities. Thus, Bank of Baroda should come up with good secure system and ensure the security and should convey the same to its customers effectively in taking their confidence.

Do you feel that your complaints are resolved effectively?

not sure 4%

no 28% yes 68%

The above graph shows the effective handling of customers by Bank of Baroda. It is able to make 68% of respondents feel that their complaints were resolved effectively and this may be the reason of high no. of respondents are satisfied with the bank. There is still need of work to be done to make those 28% respondents happy with the resolution provided to them on their complaints.

You were satisfied with resolution provided on your previous complaint/s.

Disagree 12% Cant say 0% Strongly disagree 4%

Agree 32%

Strongly agree 52%

This graph shows the outcome of the previous question, where 52% of respondents strongly agree that they were satisfied with resolution on their complaints. Moreover, 32% respondents do agree with the above statement that implies that they are satisfied with the resolution provided to them. But, 12% of respondents also disagree and 4% of respondents even strongly disagree that they were given proper resolution to their problems. Thus, Bank of Baroda should focus on effective complaints handling by soft spoken, experienced and helpful employees.

How would you rate the behavior of employees in your current bank
Worst 4% Excellent 12%

Bad 48%

Good 28%

Average 8%

The graph shows the employees behavior that impacts a lot on business of any organisation. It can be inferred from the data analysis that Bank of Baroda is doing very well in terms of services but they value is getting destructed by its employees unproductive behavior, here, 48% of the respondents feel that the behavior of employees was very bad and 4% also feel that they were worst. On the other hand, 12% of respondents have selected excellent and good by 28% of participants on the behavior issue of Bank of Baroda. Thus, there is emergence to work on employee behavior if, the bank wants to improve in the future. It should invest in training program of its employees and make them know the worth of customers.

Do you think that you are given personalized treatment by your bank

no 44% Yes 56%

The above graph is to chart the differentiation between normal and valuable customers. It is good for Bank of Baroda that 56% of respondents think that they are treated in personalized way by the bank and they are given treatment as per their worth in the bank.

Do you use any loyalty schemes of the bank, if yes then please mention
platinum 0% silver 8% gold 12%

bronze 16%

no 64%

The above figure is to show the loyalty schemes avail by various customers, here, 64% of respondents do not avail any loyalty scheme and bronze is 16%, silver is 8% and gold is 12% availed by the respondents. But, none of the respondents use platinum card scheme. Thus, BOB should come up with many such loyalty schemes that help in identifying and retaining most valuable customers of the bank.

Would you like to use more products and services of your current bank in future
may be 8%

no 20% yes 72%

The graph is to show the potential customers of the bank that in future the bank can cross sell or up sell to these customers. It is very good for the bank that 72% of the respondents would like to avail more products and services of Bank of Baroda. Thus, the bank should come with more innovative, attractive, and affordable products and services in future to target these potential cum loyal customers.

Would you like to recommend this bank to your family & friends
never 4% may be 0% no 12%

yes 24%

Definitely 60%

The most important and pleasing graph of this study is to see whether customers are as satisfied to recommend this bank to someone else. It shows that 60% of the respondents would definitely recommend this bank to the known. Among the whole respondents, only 4% would never recommend that shows their dissatisfaction and 12% said directly no. Therefore, the company should focus on improving the behavior its employees to convert these 12% and 4% respondents into satisfied customers that will not only give their future business to the bank but also do positive word of mouth that is the best communication tool used by any company.

ING Vysya Bank is a Bangalore-based retail, commercial/wholesale, and private bank formed from the 2002 merger of the Dutch ING Group and Indian Vysya Bank, following a seven-year strategic alliance between Vysya Bank and now-ING Group subsidiary Belgian Bank Bruxelles Lambert. This merger marks the first between an Indian bank and a foreign bank. ING Group, the highest-ranking institutional shareholder, currently holds a 44% equity stake in ING Vysya Bank, followed by Aberdeen Asset Management, private equity firm ChrysCapital, Morgan Stanley, and Citigroup, respectively. ING Group also maintains a presence in India through shareholding in ING Vysya Life Insurance Company and ING Investment Management (India). Founded in 1930, Vysya Bank was formally incorporated in the city of Bangalore, Karnataka. The state of Karnataka is known as the "cradle of Indian banking" due to the region's bygone banking relationship with several European East India Companies during the 17th, 18th and 19th centuries. Seven of the country's leading banks (Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, State Bank of Mysore, and ING Vysya Bank) were originally established in Karnataka. In 1995, Vysya Bank entered into a long-term strategic alliance with Belgian bank Bank Bruxelles Lambert (BBL). Following this agreement, the Vysya Bank engaged KPMC Peat Marwick for assistance in re-engineering its business processes in preparation for globalization. In 1996, an international investment banking joint venture (JV) with MC Securities (London), an investment banking subsidiary of BBL, was formally established. In 1998, the ING Group acquired BBL and all its contractual and JV interests in Vysya Bank. In 1999, Vysya Bank joined the ING Group in co-marketing/distribution of life insurance products in India. Vysya Bank also acquired a 26% equity stake in the ING Asset Management Company. In 2000, Vysya Bank, ING Insurance, and the Damani Group formed a life insurance JV; this innovative collaboration marks the first bank assurance venture in India. ING Vysya Bank has over 80 years of operating experience in the banking/financial services & insurance sector and currently serves over 2 million Indian consumers. The bank offers an entire range of financial products and services, organized under three strategic lines of business: retail, private and wholesale banking.

CRM practices in ING Vysya Bank IBM to implement CRM solution

IBM, along with its business partners Avaya GlobalConnect and Talisma, has implemented Customer Service Line, a CRM solution, for ING Vysya Bank. The solution ensures 24x7 availability of phone banking service to its customers. IBM Global Services provided business consultancy and lead managed this CRM project and also integrated it, in addition to setting up the LAN and IT infrastructure for this project. The ING Vysya Customer Service Line provides full service phone banking solution to its customers.

BPR Enabled
ING Vysya Bank launched the 'customer first' initiative that would use IT and BPR creatively towards the objective of making the bank 'easy to deal with' for customers. It would help in Reengineering the project for account opening and account maintenance. The service request fulfillment cycle has reduced times by more than 90%, making the customers very happy. By making the bank easier for customers to interact with helped in saving Rs.2.5 crore.

Easy to Deal With

Financial institutions are perceived to be opaque and inwardly focused. And ING Vysya Bank's worldwide market research suggested the same: customers do not feel in control of their money when dealing with financial services companies.ING Vysya Bank decided to launch the 'customer first' initiative that would use technology and BPR creatively towards the objective of making the bank 'easy to deal with' for customers. Using pre-generated kits for accessing telephone banking and ATM, including instantaneous replacement of lost cards was the first step. "Stocking pre-generated inventory of accounts and access devices like PINs and ATM cards at all customer touchpoints took the bank closer to its aim. The bank focus was on pre-processing all operations and technology elements associated with these processes, so that the only task would be to activate the account and channels as soon as the customer's request is received. However, there were some roadblocks in the implementation. From a technology perspective, all customers facing core banking processes relevant for account opening and account maintenance had to be re-engineered for the project. This was very challenging,

users were comfortable with the existing processes and didn't want to change the way they work. Initially, there was a significant disconnect between the people who designed the new processes and people involved in user acceptance testing. To tackle that, additional training on the current and modified business processes with inputs on the benefits of the re-engineered process was provided to the users.

CRM Practices from Customer perspective

Since when you are having an a/c in your current bank?

Less than 1 Year 4%

more than 4 yr 16%

1-2 yr 20%

3-4 yr 24% 2-3 yr 36%

From this chart we can see that, 16% of total customer are having Ing Vysya bank account from more than 4 years, 24% customers are using its services from 3 to 4 years, 36% customers are using from 2 to 3 years, 20% customers using from 1to 2 years and 4% are having its bank account from less than 1 year. 16% customer are more loyal to the bank because they have an account from more than 4 years while 20% customers having account from 1 to 2 years, it shows that company is able to attract new customers as well.

Please tick the services you avail of your current bank.

Demat A/c 7% Mobile banking 2%

Current A/c 2%

Internet banking 13% Loan 9%

Saving A/c 34%

Credit card 26%

Fixed Deposit 7%

This chart shows that 34% respondents having saving account, 26% are using credit card facility, 9% having loan account, 2% having current account, 13% using internet banking facility and 7% having demat account. Company has more customer in saving bank account, it shows that people prefer it saving bank account than any other account or facility.

Please rate the following services of your current bank from 1 to 5 (Least to Most).

14 12 10 8 6 4 2 0 Loaning Bank A/c ATM services Internet banking Mobile banking Credit card Demat facility Locker facility 5 4 3 2 1

The above graph shows that ATM services, credit card, bank a/c and specially locker facility is rated high most by large no. of respondents. Locker facility is generally not considered by most of the customers but ING Vysya Bank is doing well in this category, thus, it should be strengthening this facility and should make available to large customers. Mobile banking and demat a/c are loaning rated lower by many respondents, thus, company should be extending its strength to this new generation facilities.

Please rate your satisfaction level with your current bank.

Highly dissatisfied 8%

Dissatisfied 16% Average 12%

Highly satisfied 24%

Satisfied 40%

This chart shows that shows that 8% respondents are highly dissatisfied, 24% are highly satisfied, 12% respondents rated Ing facilities as average satisfaction,16% are rated it as dissatisfied and 40% are satisfied with Ing Vysya. Most of the respondent satisfied with Ing but it needs to improve and take measures to make dissatisfied customers to satisfy.

Do you have any complaints regarding your bank?

yes 36%

no 64%

The 64% respondents have not any complain with ING Vysya but 36% having complaints with this bank. Company need to resolve their problems quickly it will help bank to make their customers loyal.

Please tick the area where you have complaints.

Insecure services (mobile, internet banking) 20%

Rude behavior of employee 31% Unresponsiveness of employee 15% Delay in service delivery 8%

Disruption in service 8%

Wrong transaction 15% Non-upgraded services 3%

This chart shows that 31% complaint people have complain about Rude behaviour of employees, 20% have complain about insecure services, 15% have wrong transaction complaints, 8% have compliant of disrupt services, 3% have No upgraded services, 8%

delay in services and 15% have complaints about unresponsiveness of employees. Bank need to give training to their employee that they should not rudely behave with the customers.
Do you feel that your complaints are resolved effectively?
not sure 12%

no 32%

yes 56%

This chart shows that 56% respondents feel that their complaints were resolved effectively while 32% feel that their complaints did not resolved efficiently and 12% complaining respondents are not sure whether their complaints were resolved efficiently or not.

You were satisfied with resolution provided on your previous complaint/s.

Strongly disagree 8%

Disagree 16% Cant say 4% Agree 28%

Strongly agree 44%

This chart shows that 44% complaining respondents highly satisfied with resolution provided on their complaints, 28% are just satisfied, 8% are strongly disagree that they

were provided good resolution, 16% are disagree and 4% are cant say that They were satisfied with provided resolution or not. Company need to provide good solution for 8% strongly disagree and 16% disagree respondents to make them loyal.

How would you rate the behavior of employees in your current bank
Bad 0% Average 8%

Worst 12%

Good 24%

Excellent 56%

From this chart we can see that 56% respondents Rate behaviour of the employees as excellence, 12% rate worst, 24% rated good while 0% respondents rated bad. It means behaviour of the employees are good with the customers but it need to be improve to make more loyal customers.

Do you think that you are given personalized treatment by your bank

no 28%

Yes 72%

This chart shows that 72% respondents get personalized treatment means special treatment and 28% are not getting personalized treatment. This dependent on the value of the customers for ING Vysya.

Do you use any loyalty schemes of the bank, if yes then please mention
platinum 8%

gold 24%

no 44%

silver 8%

bronz 16%

ING Vysya having some loyalty schemes like platinum, gold, silver, bronze cards. 16% respondents using bronze card loyalty scheme, 24% using gold card, 8% using silver card, 8% using platinum card loyalty schemes while 44% respondents are not having any kind of loyalty card. It is very good that bank has so many schemes and it also beneficial for the Bank.

Would you like to use more products and services of your current bank in future
may be 4% no 8%

yes 88%

This chart shows that 88% of the total respondents would like to use more products and services of ING Vysya in future, 8% would not use more products in future while 4 % may be use ING more products in future. It is very good for company that their existing customers are ready to use its future product also.
Would you like to recommend this bank to your family & friends

never 16% no 8% may be 8% yes 20%

Definitely 48%

This chart shows that 48% respondents are definitely refer ING Vysya bank for their family and friends, 8% are not recommending, 20% are saying yes for recommendation, 8% are not decided while 16% are never recommend ING Vysya bank to their family and friends. The recommendation percentage is good, its good for bank. But there is also customers who do not like to recommend it means they are not fully satisfied with the bank Services. So Bank needs to make satisfy them and try to win their recommendations.

Conclusion
Although all banks recognize the need for CRM, not every bank is implementing the complete CRM concept. The way CRM has been implemented thus far seems to depend heavily on the current balance between the discretionary and advisory services that the bank provides. Customer Relationship Management is beneficial for all stakeholders: customers, employees, and investors. It is being used large or small banks in India as well as abroad. Due to privatization, deregulation, and globalization competition has increased. This has led in the intensive use of CRM. ING Vysya Bank has implemented CRM to some extent, but still is on the initial stage. It has invested a lot of money in implemented various IT based solution to make its banking operations more easy, convenience for its customers but in terms of its customer dealing, it needs to more to make its customers satisfied. Its employees are coming out to be its strength where majority of respondents have responded excellent behaviour of the employees that is an edge over Bank of Baroda. Moreover, 44% respondents do strongly agree with the statement that implies that they are satisfied with the resolution provided to them. But, 16% of respondents also disagree and 8% of respondents even strongly disagree that they were given proper resolution to their problems. Thus, ING Vysya Bank should focus on effective complaints handling by soft spoken, experienced and helpful employees. Bank of Baroda is more customer centric than ING Vysya Bank. BOB has got more positive and favourable response from the respondents and specially in case of recommendation by customers to his/her family members where it has higher positive response. Therefore, the company should focus on improving the behavior its employees to convert these 12% and 4% respondents into satisfied customers that will not only give their future business to the bank but also do positive word of mouth that is the best communication tool used by any company. None of the respondents use platinum card scheme. Thus, BOB should come up with many such loyalty schemes that help in identifying and retaining most valuable customers of the bank.

Recommendation to both banks to improve CRM

Both the banks need to understand the needs and demands of their target customers and then formulate their strategies and practices to serve them efficiently and effectively. Technological solutions are also compulsory but they must be user friendly. To make CRM a successful story banks have to take some critical steps: ING Vysya Bank Banks should recognize the diversity of experience and needs of different customers. Banks need to develop the propositions both relevant and practical, but not too complex. Banks should get support from local media, newspapers and magazines to build commitment and trust in the community and to reflect values and aspiration of local community in services and products. Banks should sponsor different social and cultural activities of their stakeholders to build the mutual confidence and relationship. Customer education programmes should be launched to improve understanding of banks procedures and decision making and increase comfort levels.

Bank of Baroda Banks should hire professional people from the local community they are trying to serve to improve understanding and performance, also increased comfort levels and trust for customers. Attractive salaries and befits can motivate employees to perform their duties well. Bank should focus on measuring current business volumes in branch/geographic penetration, to help predict future value/growth patterns; in branch marketing research, to ensure understanding of customers satisfaction levels, service expectations, customer loyalty etc. and tracking the success of advertising and PR and transfer learning into future campaigns. Measurement is a key to the understanding, learning and improvement customer experience. Banking sector management needs actively to articulate the need for an improved and consistent customer experience and branch mangers should localize this approach and coach their staff to deliver it. Banks should use customer friendly technology which their customer can use and brings value in their life.