ASSIGNMENT -2

ON
BANKING INDUSTRY
ICICI BANK
&
HDFC BANK

SUBMITTED TO SUBMITTED BY
Mr. Rajan Girdhar Jairaghuveer Bawa
RR1903A03
10902421
 INTRODUCTION

CRM is an acronym for ‘Customer Relationship Management’. It’s a set of strategies, processes,
metrics, organizational culture and technology solutions that enhance an organization's ability to
see the differences in its present & prospective customers, track new opportunities to better serve
customers and act, instantly and profitably, on those differences and opportunities. Recently
CRM has taken a center stage in the business world with businesses concentrating on saving
money and increasing profits by redefining internal processes and procedures. It costs a
company dramatically less to retain and grow an existing client, than it does to court new ones.
The aim of CRM is to optimize the use of technology and human resources.
CRM services consist of the following major segments:
Consulting services
 Implementation services
 CRM Outsourcing services
 Training services

Banking Industry revolves around three basic features being:

1. Intangibility: Unlike a product which can be seen and benefits derived accordingly, the
banking industry thrives practically on the quality of the services rendered. The experience of the
customer determines the growth of the business.

2. Variability: The present day customer is impatient and is highly demanding and dos not
compromise on the quality of the service rendered, as he expects that high cost equals high
quality and vice versa.

3. Satisfiers: Unlike the manufacturing industry that wholly depends on the tangibility and
extrinsic factors, the service industry is totally dependent on the intrinsic and extrinsic factors,
which have a close earring on the core benefits.

Benefits of Using CRM in Banking Industry

 1. Provide better customer balance
2. Increase customer revival
3. Discover new customers
4. Helps sales staff close deals faster
5. Making banking operation more efficient
6. Simplify marketing and sales process

As the banking industry thrives on the services rendered, it becomes necessary to imbibe the
"PQRST" strategy to maintain CRM, where

P: Peace of mind for the customer

Q: Quality of service rendered, which should commensurate to the expectations of the customer
R: Respect to be given to the customer irrespective of his economic background
S: Sincerity in the discharge of duties to the customers, with a personal touch
T: Time bound-which plays a vital role for the customer to have a pleasant experience
In experiencing "PRIDE" while dealing with customers where
P: Personal involvement is taken up by the agency
R: Leading to responsibility for the actions of the team members
I: In
D: Delivering
E: Excellence in the service rendered

CRM AT ICICI

CRM at ICICI Bank involves increased communication between the bank and its present and
prospective customers. Its philosophy focuses on each and every customer’s satisfaction.
CRM facilitated coordination of multiple business functions & multiple channel of
communication with the customers to carry out customer management more efficiently. It also
automated the process flow tracking in the product sales process and helped generate customized
reports and promote cross-selling.

The typical components of a CRM strategy at ICICI are as follows

Understand and differentiate: Understanding customers is important in order to
develop a sound relationship with them. Customer profiling is done in order to
understand demographics, purchase pattern and channel preference. CRM also helped ICICI in
valuation of its customers to understand customer profitability and Customer
Life Time Value (CLV).

- Develop and customize: - In a customer centric business environment, the products and
processes have to be according to customers’ needs and preferences. ICICI has always
focused on developing channels of service delivery according to customers’ need and
service expectation.

- Interact and Deliver: To foster a strong customer relationship ICICI ensured that all
areas of the bank have easy access to relevant, actionable customer information and
employees should be trained on how to use customer information to tailor interactions
based on both customer needs and potential customer value.

- Acquire and Retain: CRM helped ICICI to figure out valuable customers and made it
easy to formulate retention strategies for them. It also helped it cope up with the change
in customer’s life cycle and offer services accordingly.

IMPLEMENTING CRM AT ICICI BANK

The key to implementing CRM was in understanding organization and customers in a better
way. There are five interrelated areas that were taken care of before implementing CRM:
- Business Focus
- Organizational Structure
- Business Metrics
- Marketing Focus and Technology
CRM in HDFC Bank

The HDFC bank has implemented a data warehouse solution that would eliminate the
inconsistencies ofworking with disparate sources. The warehouse pulls information from the
different customer interfacechannels the bank offers, centralizing them in a single database. In
early 2002, the bank completed theinterface of the warehouse with the retail banking liability
system, followed by the assets system and thedepository system by the end of 2002.
The bank gives certain profitable customers ‘preferred’ status in service deliveries and pricing.
This helpsthe bank to know which channels the particular customer prefers to use. The bank then
sets up itsinvestments in that channel. The bank undertakes analytics-driven database driven
marketing effortsbased on the banking behavior of the customer. If he has used his card in an
apparel shop, customizedincentive mailers are sent to him; or marketing programs are sent to
merchants who facilitate usage of thebank’s cards on the bank’s terminals.
The data warehouse with over two terabyte of data under management empowers the product
managers to study and monitor the customer and business trends over the last six quarters in an
online manner.
According to researchers, 81% customers recommend HDFC BANK products, 91% of these are
having good purchasing experience with the company.58% of the customers said that the
maintenance charges charged by the company is moderate, 55%of which are having good
purchasing experience and 85% ofwhich recommend HDFC BANK to others.63% customers are
satisfied with the existing servicesrendered by the organization. Majority (67%) of customers
rated the HDFC BANK products as “good”and 67% of which are highly satisfied with the
service of the company.
According to HDFC Bank, a customer is an asset to the company only if he is a loyal
customer.Approximately 76% customers of HDFC BANK are discovered to be loyal. This is the
area where theorganization can and plans to improve in the near future.
HDFC Bank uses iFlex's Microbanker and Finware for its core banking operations. It plans to
transfer totheir new ``Universal Banking Services'' package as soon as the acceptance tests
currently under way arecompleted. The bank also uses their Internet banking software.
For the, the IT activities span three segments:
• Back-office, which enables all transactions
• Distribution of the bank's products and services in the market. That is, enabling
customerinteraction through the Internet, ATMs, the mobile phone. HDFC's corporate customers
need notvisit the bank for many of their transactions either. PC-based corporate banking lets
authorizedpersonnel in corporate open letters of credit or pays suppliers and integrates the
transaction withthe ERP system.
• The third sort of automation enables the business intelligence and CRM aspects of a bank's

REFRENCES

www.icicibank.com

www.hdfcbank.com

//www.icicibank.com/pfsuser/aboutus/investorelations/annualreport/pdf/2001-
2002/a_r2k2%2845-68%29.pdf
www.sas.com/success/hdfc.html