Crm in Indian Banks
CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN BANKS
* Popli, G.S ** Rao, D.N.
1. Background
Relationship Marketing is the process of building long term mutually beneficial relationship with the customers. The Financial Institutions in the developed countries are using this marketing tool very effectively by taking full advantage of Information and Communication Technologies. The Indian Banking Industry which was operating in a bureaucratic style prior to 1991 had to undergo large scale transformation with the opening up of the economy. The Sector has been facing unprecedented challenges with the wave of liberalization, privatization and globalization of Indian Economy. Banks in India are under intense pressure in today’s volatile market place. Steep competition, globalization, growing customer demand and exposure to higher credit risks are forcing the banks to find new ways of improving profitability. On the other hand, cost-cutting measures have forced banks to manage
operations with few Customers Relationship Managers and Product Specialists. Industry consolidation also poses fresh challenges to this sector. Even today, most of the banks in India rely on the legacy of Customer Information System. In such a scenario, it is difficult to have a complete customer view across divisions. They face unprecedented challenges to sustain their growth path for survival. The challenges include customer retention, reducing transaction costs, risk management and Regulation Compliance. The result was a huge proliferation in customer’s choice. The strategic tool that was chosen for aiding this process was Information Technology and most of the banks went through adoption of various stages and forms of IT over the years and the process is still continuing. *Popli, G.S. is currently working as General Manager with Oriental Bank of Commerce. **Rao, D.N. is currently working as Director, Centre for Management Education, All India Management Association, New Delhi.
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* Popli, G.S ** Rao, D.N.
1. Background
Relationship Marketing is the process of building long term mutually beneficial relationship with the customers. The Financial Institutions in the developed countries are using this marketing tool very effectively by taking full advantage of Information and Communication Technologies. The Indian Banking Industry which was operating in a bureaucratic style prior to 1991 had to undergo large scale transformation with the opening up of the economy. The Sector has been facing unprecedented challenges with the wave of liberalization, privatization and globalization of Indian Economy. Banks in India are under intense pressure in today’s volatile market place. Steep competition, globalization, growing customer demand and exposure to higher credit risks are forcing the banks to find new ways of improving profitability. On the other hand, cost-cutting measures have forced banks to manage
operations with few Customers Relationship Managers and Product Specialists. Industry consolidation also poses fresh challenges to this sector. Even today, most of the banks in India rely on the legacy of Customer Information System. In such a scenario, it is difficult to have a complete customer view across divisions. They face unprecedented challenges to sustain their growth path for survival. The challenges include customer retention, reducing transaction costs, risk management and Regulation Compliance. The result was a huge proliferation in customer’s choice. The strategic tool that was chosen for aiding this process was Information Technology and most of the banks went through adoption of various stages and forms of IT over the years and the process is still continuing. *Popli, G.S. is currently working as General Manager with Oriental Bank of Commerce. **Rao, D.N. is currently working as Director, Centre for Management Education, All India Management Association, New Delhi.
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