CRM IN BANKING SECTOR
CRM is an acronym that stands for Customer Relationship Management. It describes the strategy that a company uses to handle customer interactions. CRM is the systematic oversight and maintenance of consumer relationships, and the data, sales, and engagements that go a long with it. CRM systems and applications help businesses easily organize and track customer information, all in one place.
One important aspect of the CRM approach is the systems of CRM that compile information from a range of different communication channels, including a company’s website, telephone, email, live chat, marketing materials, social media, and more. Through the CRM approach and the systems used to facilitate CRM, businesses learn more about their target audiences and how to best cater to their needs. However, adopting the CRM approach may also occasionally lead to favouritism within an audience of consumers, resulting in dissatisfaction among customers and defeating the purpose of CRM.
CRM is a sound business strategy to identify the bank’s most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, reprising, discretionary decision making, and customized service-all delivered through the various sales channels that the bank uses. Under this case study, a campaign management in a bank is conducted using data mining tasks such as `dependency analysis, cluster profile analysis, concept description, deviation detection, and data visualization.
Crucial business decisions with this campaign are made by extracting valid, previously unknown and ultimately comprehensible and actionable knowledge from large databases. The model developed here answers what the different customer segments are, who more likely to respond to a given offer is, which customers are the bank likely to lose, who most likely to default on credit cards is, what the risk associated with this loan applicant is.
The idea of CRM is that it helps businesses use technology and human resources gain insight into the behaviour of customers and the value of those customers. If it works as hoped, a business can: provide better customer service, make call centres more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues. It doesn’t happen by simply buying software and installing it.CRM is an approach to managing a company’s interaction with current and potential . The CRM approach tries to analyse data about customers’ history with a company, to improve business relationships with customers, specifically focusing on customer retention, and ultimately to drive sales growth.
CRM IN BANKING SECTOR
Over thes last few decades, technical evolution has highly affected the banking industry. For more than 200 years, banks were using branch based operations. Since the 1980s, things have been really changing with the advent of multiple technologies and applications. Different organisations got affected from this revolution; the banking industry is one of it. In this technology revolution, technology based remote access delivery channels and payment systems surfaced. ATM displaced cashier tellers, telephone represented by call centres replaced the bank branch, internet replaced the mail, credit cards and electronic cash replaced traditional cash transactions, and interactive television will replace face-to-face transactions. In recent years, banks have moved towards marketing orientation and the adoption of relationship banking principles.
The key motivators for embracing marketing principles were the competitive pressure that arose from the deregulation of the financial services market particularly in India. The bank would need a complete view of its customers across the various systems that contain their data. If the bank could track customer behaviour, executives can have a better understanding, a predicative future behaviour and customer preferences. The data and applications can help the bank to manage its customer relationship to continue to grow and evolve (Dyche, 2001). According to Stone et al. (2002) most sectors of the financial services industry are trying to use CRM techniques to achieve a variety of outcomes. In the area of strategy, they are trying to:
• Create consumer-centric culture and organisation;
• Secure customer relationships;
• Maximize customer profitability;
• Integrate communications and supplier – customer interactions across channels;
• Identify sales prospects and opportunities;
• Support cross and up-selling initiatives;
• Manage customer value by developing propositions aimed at different customer segments;
• Support channel management, pricing and migration.
The idea of CRM is that it helps businesses use technology and human resources gain insight into the behaviour of customers and the value of those customers. If it works as hoped, a business can: provide better customer service, make call centres more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues.