IMPORTANT ROLE OF CRM IN BANKING SECTOR

 28-Sep-2018

 Product Development

Although, there are many banks who struggle a lot to make profit, still they hardly pay
attention to enhancing their customer strategy. Now, those days are literally gone when
people had a misconception about banks being okay with not on a client enough since
they had clients. As per the statistics by Reichheld and Sasser, to demonstrate 5%
growth in customer retention can increase the profitability up to 35% in the banking
industry. Therefore, banks are now stressing on to retain the customers and rising up the
market share. With such marvelous insights, it is yet a surety that CRM Solution will
take off in the coming years ahead. In present Indian banking scenario, there are two
prominent phenomena that are the focal points to emerge the practices and policies,
which are the technology and the relationship marketing. According to the reports
of Philip Kotler, CRM software is the process of carefully managing the information in
detail about each and every individual customer and all customer touch points for
maximizing the customer's loyalty.

Due to the increase in globalization, the new generations of private sector banks and
many foreign banks have also entered into the market and they are bringing several
useful and innovative products. Banks are required to differentiate themselves by adding
the value-added services, offering and building long-term relationships with their
customers. They need to offer the create a good customer experience by offering them
more customized products, enhanced value offerings, personalized services and
increased accessibility. Money related rebuilding and authoritative adjustment are the
catchphrases for the management for addressing the development of difficulties
emerging out in globalization. According to the reports, Yes Bank (YCCRM) has the
prominent feature of discussion board and templates; on the other hand, Punjab
National Bank (PNB) has deployed CRM software services with the modules of
prospect management, lead management, and activity management while ICICI
bankhas identified the functional areas which are integrated on core businesses.

Issues & Challenges of CRM in Banking Stream

The following are the impediments to CRM implementation services:

 Technological issue

Most of the officers perceive the technology limited to record the information and
transaction about the customers. The use of technology in further sophisticated
information processing and dissemination is no done. There are multiple integration
channels that simultaneously use the latest technologies in customer interface, service,
and sales.

 People issue

It means the lack of knowledge and skills in converting data to customer knowledge.
There is lack of motivation to utilize the potential of CRM software solution. There are
less or insufficient decision-making authority and inadequate performance management
parameters. In order to use the concept of CRM towards the customer centricity,
sufficient decision-making power it requires to provide the customized, responsive and
proactive services.
 Issues & Challenges of CRM

 Process issue

As CRM is an organizational wide strategy, so the complete process requires being

aligned inappropriate manner. The CRM implementation demands a change in
organizational culture in terms of shared values, vision and mission. The success of
CRM software lies in the ownership by all the departments with marketing in the
strategic role to combine all efforts towards better customer service.

Benefits of CRM in the Banking Sector

The CRM software is the most important business management tool for the banking
industry. For any service-based organization, an apt customer relationship management
is the primary determinant & capable of changing the face of the company. The great
solutions can help any industry in marketing new customers, dealing closures and also
to facilitating the outstanding support service. Following are the few key benefits of
CRM software in the Banking industry:

 Improved customer retention

To increase new customers is a difficult job for banks. In this tough market environment,
retaining existing customers is also a difficult job. Retaining the existing customers
becomes an important part to have a grip in this competitive market. The customer's
retention can be accomplished by enhanced customers satisfaction and loyalty.

 Boosted sales

Sales have become a crucial part of banks with an increase in the evolution of CRM.
CRM software implementation assists banks in sales management with the sales
modules. It also helps to identify and convert the leads into prospective customers and
assist in the acquisition of new customers with the help of past track records.

 More effective Marketing efforts

CRM services make the efforts of marketing deportment more productive & effective. It
generates the report highlights that customers touch and data points, purchase
behavior, engagement channels and much more. It also helps marketing team in
exploring new marketing opportunities for engagement and retention.
  Increased productivity

Having the entire data of the customers on a single screen, bankers can now spend
more time on strengthening their customer relationship rather than spending time on
gathering and organizing the data. It increases the productive by reducing cost with the
help of minimizing or eliminating repetitive tasks.

 Personalized Relationships

The ultimate objective of CRM software is to handle the customers on a personalized

level, as apparent identity. It is quite difficult to keep the track records and follow up on
each individual customer data and look at the trends. It also helps to overcome the
difficulties by letting bankers provide personalized services to every customer.

Future Perks of CRM in Banking Industry

Potentially, as the banking industry seeks to replicate the digital experience of such
customer-centric companies like Uber,Apple, Facebook, Amazon, and many others,
the banking is usually unable to leverage the insights on customers for the advantages
of these same customers. Despite the most universal agreement that the banking
industry requires improving the use of data for delivering an enhanced customer
experience and reduce the cost of technology to deliver on this promise, advanced
analytics remains a low priority according the Digital Banking Report, State of Financial
Marketing. According to the reports of State of Financial Marketing, while the banking
industry players indicate that they need to deliver the real-time insights to customers,
less the 20% of the players are currently capable of doing so. Of more concern, a rough
estimate of 40% of all but many large financial institutions’ tale places them in
the “Static Self Assessment Category”. The custom CRM Software will improve the
success level of banks in meeting sales, marketing, and customer objective goals. The
banks ought to spruce up their performance for lead conversion and the customer
retention on regular basis.

With so many options available in the ever-evolving market, the customers can literally
pick and choose, where they will receive advice, invest their money, take out the loans
and purchase financial products. According to Accenture, the consumer has indicated
that they would like banking experience to be seamless and an almost invisible part of
their day-to-day life. In order to be ahead in this competitive market, your CRM in
financial service institutions needs to have brand authority in the market which shows
that yours is the only organization that can be chosen. From the advent of the drive-up
teller, credit card and debit cards, ATM and direct deposit, etc the industry has changed
a lot and leveraged the technology to simplify the segment. In annual recent reports by
digital banking, to remove the frictions from customer journey was the second most
mentioned prediction by close to 100 financial service industry leaders surveyed.
According to J.D. Power, the largest banks have the best customer satisfaction scores
for the first time ever with the potential to steal business from small players.

Conclusion

Effective CRM software has many advanced features which allow banks to link with their
customers and hence build a long-term relationship, helps to set apart the competition.
CRM is no longer optional for banks but is important for its success. So it is high time to
be the bank your customers love with optimal CRM implementation.
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