Customer Relationship. Management in Banking Sector and A Model Design for Banking. Performance Enhancement. Semih Onut. Ibrahim Erdem. Abstract. This study examined the effects of Customer Relationship Management (CRM) practices on commercial banks performance in. Therefore, banks are increasingly focused on identifying customer needs, pulling and storing them. Customer Relationship Management is a process that.
It can also be described as a business strategy comprised of process, organisational and technical change to better manage business around customer behaviours. Operation CRM — In this, CRM software packages are used to track and efficiently organise inbound and outbound interactions with customers including the management of marketing campaigns and call centres.
Operational CRM supports frontline processes in sales, marketing and customer service, automating communications and interactions with the customers. The major benefits of operational CRM to banks are: It involves the use of data analysis to extract knowledge for optimising customer relationships.
The major benefits of Analytical CRM to banks are: Collaborative CRM — These involve systems facilitating customers to perform services on their own through a variety of communication and interactive channels.
It brings people process and data together and enables channelling of data and information appropriately to bank staff for proactive decision making and enhanced informed customer service and support activities. It provides a means of information sharing to all concerned in timely manner and includes customer as a creator of service. Global scenario Worldwide banks have explored and realised the benefits of CRM in a variety of ways.
Different banks have implemented the philosophy in their own different way. A few illustrations will give a glimpse of the global scenario with respect to CRM in Banking. Royal Bank of Canada utilised CRM to develop models of assessment of customer profitability and life time value.
CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING SYSTEM (CASE OF KOSOVO) | Open Access Journals
These were then included in determining customer decisions like — Customised Marketing campaign, establishing service levels, segmentation, targeting, product design and pricing. Wells Fargo Bank renowned for leadership in service and convenience to varied customer segments focused on customer service through CRM. Application of CRM enabled better integration of customer information and service applications to assist representatives of customer sales and services to easily provide a one-stop-shop for any banking service or transaction.
Using CRM, Wells Fargo takes full advantage of available customer information to offer customer the choice, convenience and price benefits so that they give the Bank, all their business. Indian scenario Although significance of Relationship Marketing practices and optimising and maintaining customer relationships across diverse customer segments has been realised and practiced by all banks in India, the technology enabled CRM is still at a developing stage.
Different Banks are at different levels of CRM adoption and implementation and majority of them can be considered to be at preliminary stages. Also SMS alerts at various significant customer service events are proliferating.
Analytical CRM is being utilised but not by all banks. These enable sharing of relevant customer information to all concerned staff members to design new products, provide proactive service, and informed customer handling leading better service.
It enables collaboration among staff and customers to create higher customer value through use of CRM software. The payoffs are in terms of increased customer base, cross- selling, sales force optimisation, efficient lead management and higher productivity. Core areas of transformation were business focus, organisation structure, business matrix, marketing focus and technology.
This brings the bank one step ahead in providing convenience and service through CRM. The system generates reports daily for top management and each of the branches have access to reports generated particularly for them. Bank of Maharashtra has developed in-house software which generates and updates a variety of reports on detailed customer information and sends to branches. These reports are utilised for better customer understanding, better customer support and service by access to relevant customer information with all stakeholders to enable decision making and Business Development as well as retention activities.
Issues and challenges CRM is a strategic initiative which has organisation wide implication. Many banks are still struggling to make proper use of this very useful mechanism. However, the adoption and utilisation is dependent on a number of factors and impediments.
Broadly the issues are pertaining to: People, Processes, Data and Technology. Also a major drawback is the general perception of CRM being a Technology imperative. There is a great need to understand that technology is only the enabler to CRM.
CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING SYSTEM (CASE OF KOSOVO)
In the real sense it is an organisation wide strategy. Most officers perceive technology as a limited to record of information and transaction.
- Customer Relationship Management in Banking Sector
The use of technology in further sophisticated information processing and dissemination is not done. There are multiple channels and multiple technologies in use simultaneously in customer interface, service and sales.
Empowerment to frontline staff: Frontline staffs have customer profile and data.
Most of them have no motivation to further process these and make full utilisation of these to provide better services and proactive selling effort. They are neither trained to use customer analytics nor to customise the Banks offering. Keywords CRM Concept; CRM Strategy; Processes; Banking Sector; Management Introduction Kosovo's banking market is at its beginnings, but the variety of customer requirements and a large number of banks in the market forces firms banks to use different systems and strategies in order to keep their customers.
CRM for bank executives is the key to their success in the market, the total of all the tools, technology and processes that manage, improve and facilitate sales, but also support customer relationships.
Banks, in addition to maximizing profit, they aim to create a stable relationship with their clients, by identifying their preferences and competing in real time.
Almost all of the banks under review used the same CRM process but understood with different development strategies, Figure 1 gives an overview of CRM processes. Review Literature Managing client relationships is a strategic platform that has its origins in relationship marketing.
Marketing of relationships is considered one of the main areas of modern marketing development, which has generated great research interest for years [ 1 ]. After the s, CRM increased the ability of banks to better understand the actual needs of their clients and also helped them develop strategies for meeting their benchmarks [ 2 ]. CRM as a strategy offers companies banks the attributes to compete with them for a limited number of customers in order to absorb more and more of the market segment.
In seeking the current trend of the globalizing economy, competition from substitutes and from entirely new off-the-shelf offers or packages is becoming increasingly harsh [ 3 ].
In today's developments, customers are the key assets for an organization, and customer relationship management is equally critical for organizations [ 4 ]. Customer Relationship Management CRM from a financial institution perspective is a sound strategy to identify clients and the bank's most lucrative prospects and takes time and attention to expanding account relationships with those clients through individualized marketing, repricing, decision making - discretionary and customized service - all offered through various sales channels used by the bank.
The overall success of the organization depends on customer satisfaction and customer satisfaction cannot be achieved without being managed Relationships with clients [ 4 ].
CRM aims to coordinate all customer-related business processes and includes collecting, comparing, and interpreting customer data to determine purchasing behavior models that can be used to support effective marketing programs [ 5 ].
Being competitive and the products are easily copiable, many companies banks are trying to gain a foothold over the competition through customer relationship management policies. In this situation, consumer behavior is volatile as they have a wider choice of products that are often less distinct and they are much more informed.
For many bids, the balance of power moves toward the customer that raises their expectations of how companies should look after them [ 3 ]. The tendency to develop a strong relationship between customers and a company can prove to be an important opportunity for competitive advantage. CRM has focused on assessing critical dimensions of satisfaction and defining customer groups with preference and distinctive expectations in the private sector of banks [ 6 ].
CRM helps companies improve their profitability with their clients while at the same time making interactions seem friendly through individualization.