Marketing of banking services
Customer relationship management is a broadly recognized, widely-implemented strategy for managing and nurturing a company's interactions with clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs.
These tools have been shown to help companies attain these objectives:
* Streamlined sales and marketing processes
* Higher sales productivity
* Added cross-selling and up-selling opportunities
* Improved service, loyalty, and retention
* Increased call center efficiency
* Higher close rates
* Better profiling and targeting
* Reduced expenses
* Increased market share
* Higher overall profitability
* Marginal costing
Choosing and implementing a system is a major undertaking. For enterprises of any appreciable size, a complete and detailed plan is required to obtain the funding, resources, and company-wide support that can make the initiative successful. Benefits must be defined, risks assessed, and cost quantified in three general areas:
* Processes: Though these systems have many technological components, business processes lie at its core. It can be seen as a more client-centric way of doing business, enabled by technology that consolidates and intelligently distributes pertinent information about clients, sales, marketing effectiveness, responsiveness, and market trends. Therefore, before choosing a technology platform, a company needs to analyze its business workflows and processes; some will likely need re-engineering to better serve the overall goal of winning and satisfying clients. Moreover, planners need to determine the types of client information that are most relevant, and how best to employ them.[
* People: For an initiative to be effective, an organization must convince its staff that change is good and that the new technology and workflows will benefit employees as well as clients. Senior executives need to be strong and visible advocates who can clearly state and support the case for change. Collaboration, teamwork, and two-way communication should be encouraged across hierarchical boundaries, especially with respect to process improvement.
* Technology: In evaluating technology, key factors include alignment with the company's business process strategy and goals; the ability to deliver the right data to the right employees; and sufficient ease of use that users won't balk. Platform selection is best undertaken by a carefully chosen group of executives who understand the business processes to be automated as well as the various software issues. Depending upon the size of the company and the breadth of data, choosing an application can take anywhere from a few weeks to a year or more.
Mumbai: In an attempt to embark on the IT bandwagon, with new initiatives including a centralized call centre, implementation of customer-relationship management and improving existing ATM networks, IDBI Bank is planning to raise its IT expenditure corpus to Rs 45 crore in the financial year 2003-04.
The bank had an outlay of Rs 25 crore for its IT and related expenses during the previous fiscal, which was utilized for providing value-added services to its customers.
Says IDBI Bank chief technology officer Neeraj Bhai: "The expenditure for IT will be increased as under our plans to set up a centralized call centre, implement CRM solutions and other IT initiatives including providing a 'single sign-up password' to customers."
The bank is planning to set up a larger call centre in Mumbai, which will integrate all its minor call centers, amounting to over 30, in this financial year. IDBI Bank is also planning to set up a smaller call centre in New Delhi to deal with the spillover from Mumbai
The bank will also employ customer relationship management (CRM) solutions at these centers, which will help in providing value-added services to the company's customers. The bank is in talks with vendors of CRM solutions, he adds.
IDBI Bank will also increase its existing number of ATMs in India. At present the bank has around 250 ATMs, which will be increased depending on the demand, he sums up.
MEASURE & MANAGE RISK AND MAKING CRM BETTER
IDBI Bank uses SAS Credit Risk Management Solution to measure, manage and mitigate credit risk across its retail assets by using its superior data mining and statistical analysis capabilities.
With an ever-changing financial service marketplace in an environment of continued turbulence, disruptive competitors, dynamic markets and demanding customers, reaching out to the customers effectively is becoming a tremendous challenge. With over million transactions in a day, alongside comes the challenge of understanding the credit worthiness of customers, and therefore to proactively mitigate, measure and monitor credit risk.
With technology deployment seen as the key solution to fuel growth, IDBI Bank, one of India's fastest growing private sector banks, needed a solution that could help the Bank meet the new regulatory framework and also ascertain the credit portfolio of its customers. IDBI Bank needed a solution that would assist in understanding the credit worthiness of its customers, generating superior Portfolio Analysis and enhancing its risk management initiative in retail banking in line with the Bank's plans on being Basel II compliant by 2006.
“At IDBI Bank we were looking at enhancing our risk management initiative in retail banking in line with our plans on being Basel II compliant by 2006. For this we needed a solution that would assist in understanding the credit worthiness of customers and define pre-approved credit lines for individuals. In addition to the above, facilitate the development of analytical models using superior statistical techniques and intelligence”, says Mr. Pramod Vaidya, Head - Risk Management, IDBI Bank.
Keeping these underlying objectives in mind, IDBI Bank decided to implement the SAS Credit Risk Management Solution across its Retail Assets division. Commenting on why IDBI Bank chose SAS, Mr. Pramod Vaidya, Head - Risk Management, IDBI Bank said “SAS clearly scored over the other contenders in terms of understanding our requirements. The company demonstrated superior delivery capabilities, analytical prowess, high level of GUI and technical and domain skills.”
Currently IDBI Bank uses the SAS Credit Risk Management solution for the performance monitoring of Home Loan Score Card which has been recently implemented in the bank and has been developed by an analytics consultant. In addition to this the bank uses SAS for its superior Data Mining and Statistical analysis capabilities for generating the monthly Portfolio Quality Report. In the near future IDBI Bank envisages using SAS for developing and recalibrating the statistical models internally.
According to Mr. Supratik Gupta Head Retail Risk Management, IDBI Bank, “With increasing over-leveraging risk these days, SAS tools will help us achieve our objective with respect to Customer Relationship Management (CRM) to have more profitable customer relationships”
IDBI Bank looks confidently into the future to face and thrive in the intense competitive environment that is emerging. The bank has now gained experience and has in place the strategies required for gaining a leadership position. With cutting edge relevant technology, aggressive marketing, innovation, tight control over costs and with its motivated workforce, the bank is all set to emerge as a model global corporate citizen in the days ahead. And various tools used for crm are also helpful