1.

Title:-

2.Abstract:-
Banks are primarily focused on satisfying needs of clients. Nowadays the banks
are faced with the unfair competition more than ever before. CRM (Customer Relationship
Management) is a recent concept, which completely replaces the traditional approach to
satisfying needs of bank clients, which have been individualized. The competitiveness in the
banking market has created such a business environment banks, where there is a need of rapid
tempo of creating loyal customers of the bank. The use of this concept will be provide
improvement of customer loyalty, minimize operating costs and increase their profitability in
the long term. CRM concept is a complex business strategy of the bank, which in his
development was conceived as a software, and eventually developed into a comprehensive
philosophy, which is focused on the client. Due to the variable and unpredictable conditions
that exist in a globalized financial market, banks are increasingly attach importance of
developing and improvement of the CRM concept. Three key factors for successful CRM are:
people, processes and technology. This paper will attempt to explain the importance of
managing relationships with customers, improve the CRM concept and its application in
banks.
Customer Relationship Management is really much more a human function
than a technology implementation. And while banks need to constantly orient their
employees and vendors towards never losing focus of the customer, technology can be
harnessed to enable the human aspect to function more effectively. Starting with building a
comprehensive view of the customer, the first step begins with putting in place an Analytic
CRM (A-CRM) framework - one that automates data capture across channels and during
every contact with the customer. Central to the system is its ability to integrate data from
multiple contacts made with a single customer for various product and service 1offerings.
This would typically provide the bank with a birds-eye-view of the customer, his saving,
spending and buying patterns. The next logical step is to use this 360 degree view of the
customer, juxtapose it against predictive, descriptive modeling and forecasting techniques in
order to zero in on the best way to reach a particular customer. For E.g.: A customer whose
debit card reflects frequent travel is probably best reached on his hand phone as compared to
a direct mailer sent to a residential address. Additionally the solution is also capable of
performing market basket analyses to predict which customers will be good candidates for
cross-sell opportunities. After analyzing demographics, purchase history and other significant
data, it creates profiles of common customer behavior patterns basis which current as well as
new customers can be approached with specific products rather than random ones. Another
functionality of ACRM is segmentation and profiling which will typically allow a bank to
identify specific segments within its customer base and design marketing strategies
customized for these segments. The core theme of all CRM and relationship marketing
perspectives is its focus on cooperative and collaborative relationships between the firm and
its customers, and/or other marketing factors.

Customer Relationship Management has become inevitable for

growth and profitability of Banks in present scenario marked by rising competition,
technological advancement and empowered customers. The CRM practices are adopted to
generate better understanding of the customer for product development, segmentation,
appropriate targeting, campaign management and maintenance of long term profitable and
mutually beneficial relationships with customers. In Indian banking Customer Relationship
Management is still at a nascent stage. A very small proportion of its potential has been
utilised. The concept has been implemented on a limited scale. The paper investigates the
impediments to successful implementation of CRM. An attempt is made to chart out a
strategic framework to realise the benefits of Customer Relationship Management.

3.Introduction:-
Banking Industry in India has undergone a rapid changes followed by a series of
fundamental developments. Most significant among them is the advancement in Information
Technology as well as communication system. This has changed the concept of Traditional
Banking activities and has been an instrumental behind broadening the dissemination of
financial information along with lowering the cost of many financial activities.
Information technology and communication networking systems have revolutionized the
functioning of Banks. Secondly increasing competition among a broad range of domestic and
foreign institutions in product marketing area becomes a prevalent practice. Thirdly, inline
with the increase in overall economic activities, financial institutions too, have modified
themselves accordingly in all spheres including customer service. The customers are now
demanding more on price (interest rate) financial security, quick service, convenience,
attractive yield, low cost loan, professional service, advice/ counselling, Easy access, simple
procedure, Friendly approach ,and variety of product.
The whole service sector is now metamorphosed to become customer specific. Until the
implementation of the Narasimhan Committee recommendations, banks in India operated
under protected environment. Even after 1993 sawthe emergency of a new breed of banks
called new private sector Banks and opening of most foreign banks in India.
In a service industry like banking, the customer is and would continue to be a prime
factor and the customer service would be one of the factors for improving profitability. Banks
are conscious of the relative cost of acquiring new customer. In the wake of increasing
competition, the banks realized that ‘customer is king’ and keeping or retaining a customer is
less expensive than creating a new customer for their products. According the Sam Walton,
“There is only one boss. He is the customer; he can fire everybody in the company from the
chairman down the line, simply by putting somewhere else”.
The CRM (Consumer Relationship Management) concept is differently
defined in the literature which is dealing with this issue. In recent years, the importance of
this method of managing customer relations in all organizations, as well as in banks, is
increasingly being emphasized. Kotler and Keller (Kotler and Keller, 2006) define customer
relationship management as a process of managing detailed information with clients and
carefully managing in all "touch points" with clients in order to maximize their loyalty. The
German Direct Marketing Association (DDV) (Reichardt, 2002) points out that the continued
application of the CRM concept would bring the company to the position of a leader.
According to Adrian Payne (Payne, 2002, p.4), CRM's approach to the business of modern
companies is aimed at creating, developing and strengthening the company's business
relations with carefully selected segments of consumers, all that for achieving customer value
and profitability for the company, but also maximizing value for all stakeholders in the
company. In a different way, this phenomenon is explained by Parvitayar and Sheth
(Parvatiyar and Sheth, 2001), who define CRM as a comprehensive strategy. CRM is a
process that is aimed at attracting, retaining and building partnerships with selected segments
of consumers in order to create superior value for them and the company itself. Based on a
specific database and appropriate CRM software, it integrates and optimizes processes related
to client relationships in various areas: marketing, distribution, customer service, and research
and development. In the banks application of this concept and its development is more recent
date. One of the first solutions related to improve the competitiveness in the market in the
management area there are in the 70s, as reflected in the application of the Quality
Management times (QM), and still in the 80's it was developed across the Total Quality
Management (TQM ). Then, in the 1990s, the Business Process Reengineering
(BPR)developed. Highlighting the forefront orientation to customers, to improve business
processes within the company management and to build and maintain customer loyalty, leads
to the development of Customer Relationship Management's (CRM) at the end of the 90s of
the last century. Along with this concept, the concept of marketing has evolved, starting with
mass marketing, one-to-one marketing, to holistic marketing.
Customer Relationship Management is really much
more a human function than a technology implementation. And while banks need to
constantly orient their employees and vendors towards never losing focus of the customer,
technology can be harnessed to enable the human aspect to function more effectively.
Starting with building a comprehensive view of the customer, the first step begins with
putting in place an Analytic CRM (A-CRM) framework - one that automates data capture
across channels and during every contact with the customer. Central to the system is its
ability to integrate data from multiple contacts made with a single customer for various
product and service 1offerings. This would typically provide the bank with a birds-eye-view
of the customer, his saving, spending and buying patterns. The next logical step is to use this
360 degree view of the customer, juxtapose it against predictive, descriptive modeling and
forecasting techniques in order to zero in on the best way to reach a particular customer. For
E.g.: A customer whose debit card reflects frequent travel is probably best reached on his
hand phone as compared to a direct mailer sent to a residential address. Additionally the
solution is also capable of performing market basket analyses to predict which customers will
be good candidates for cross-sell opportunities. After analyzing demographics, purchase
history and other significant data, it creates profiles of common customer behavior patterns
basis which current as well as new customers can be approached with specific products rather
than random ones. Another functionality of ACRM is segmentation and profiling which will
typically allow a bank to identify specific segments within its customer base and design
marketing strategies customized for these segments. The core theme of all CRM and
relationship marketing perspectives is its focus on cooperative and collaborative relationships
between the firm and its customers, and/or other marketing factors.
 Customer Relationship Management has become inevitable for growth and
profitability of Banks in present scenario marked by rising competition, technological
advancement and empowered customers. The CRM practices are adopted to generate better
understanding of the customer for product development, segmentation, appropriate targeting,
campaign management and maintenance of long term profitable and mutually beneficial
relationships with customers. In Indian banking Customer Relationship Management is still at
a nascent stage. A very small proportion of its potential has been utilised. The concept has
been implemented on a limited scale. The paper investigates the impediments to successful
implementation of CRM. An attempt is made to chart out a strategic framework to realise the
benefits of Customer Relationship Management.