BENEFITS OF CRM TO BANKS

CRM Banking Focuses on the Customer

            CRM manages to places the customer at the focal point of the organization in order to cater to his needs, satisfy him and thus maximize the profits of the organization. Banking CRM understands the needs of the customer and integrates it with people, technology, resources and business rocesses. It focuses on the existing data available in the organization and uses it to improve its relationship with customers. Banking CRM uses information and analytical tools to secure customer focus. Thus it is completely essential that banks implement CRM in order to secure this.

Overall Profitability

                         CRM enables banks to give employee's better training that helps  them face customers easily. It achieves better infrastructure and ultimately contributes to better overall performance. The byproducts of CRM banking solutions are customer acquisition, retention and profitability. Banks that don't implement CRM will undoubtedly find themselves with lesser profitability coupled with a sharp decline in the number of customers.

Satisfied Customers

            It is important to make a customer feel as if he / she is the only one - this will go a long way in satisfying and retaining them. Bankers need a return on investment and it has been proved that increase in customer satisfaction more than contributes a fair share to ROI. The main value of CRM banking lies in satisfaction and increased retention of customers.

Centralized Information

            CRM banking solutions manage to clearly integrate people, processes and technology. CRM banking provides banks with a holistic view of all bank transactions and customer information as well and stores it in a single data warehouse where it can be studied later.

5.2 BENEFITS OF CRM TO CUSTOMERS

            Customer relationships are becoming even more important for banks as market conditions get harder. Competition is increasing, margins are eroding, customers are becoming more demanding and the life-cycles of products and services are shortening dramatically. All these forces make it necessary for banks to intensify the relationship with their customers and offer them the services they need via the channels they prefer.

► Service provisioning throughout the entire life cycle of the corporate   customer, from the initial stages to the establishment of a close, long-term relationship with profitable clients,

► Optimization of the use of bank resources, such as alternative channels of distribution (internet and home banking),

► Significant reduction in and limitation of operational costs through system automation and standardization,

► Low maintenance and expansion costs owing to the use of modern administration tools which allow bank employees to make a wide range of modifications to the system

► CRM permits businesses to leverage information from their databases to achieve customer retention and to cross-sell new products and services to existing customers.

► Companies that implement CRM make better relationships with their customers, achieve loyal customers and a substantial payback, increased revenue and reduced cost.

► CRM when successfully deployed can have a dramatic effect on bottom-line performance. For example, Lowe’s Home Improvement Warehouse, in a span of 18 months, achieved a 265 percent return on investment (ROI) on its $ 11m CRM investment.

► According to a study conducted in the sector of banking, convenience of location, price, recommendations from others and advertising are not important selection criteria for banks. From customers’ point of view, important criteria are: account and transaction accuracy and carefulness, efficiency in correcting mistakes and friendliness and helpfulness of personnel. Thus, CRM, high-quality attributes of the product / service and differentiation proved to be the most important factors for customers.

► Another study conducted in a European bank shows that with CRM, the bank was able to focus on profitable clients through efficient segmentation according to individual behavior. Information about ‘who buys what and how much’ enabled the bank to have a commercial approach based on the client and not solely on the product. Thus, the bank was able to better satisfy and retain its customers.

CHALLENGES FACED BY BANKS IN SUCCESSFUL  IMPLEMENTATION OF CRM

►  The difficulty of obtaining a complete view of customers.

►  The need to move away from disjointed, standalone, and inconsistent       channels to provide a cohesive, multichannel offering.

►  The burden of disconnected legacy systems and disparate databases that store client financial data.

►  The cost and complexity of meeting stringent government regulatory and client security and privacy requirements.

►  The pressure on margins and growth prospects from increased competition.

►  The costs associated with retaining customers and developing customer loyalty.