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Banking CRM for themicrofinance industryThought Banking Solution | Systems Integrati...
The microfinance industry             The microfinance industry is growing and has            •	 The sheer number of custo...
system linked to the sales system to onboard         marketing information coupled with analytics   the customer directly ...
availability of a new variety of seeds can be          customers” in terms of their profitability,             notified on...
About FinacleFinacle from Infosys partners with banks to transform process, productand customer experience, arming them wi...
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Finacle - Banking CRM Solutions For Microfinance Organizations


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Read the whitepaper to know how Banking CRM solutions are benefitting Microfinance Sector and how the challenges associated with microfinance industry are resolved with these right tools i.e. CRM.

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Finacle - Banking CRM Solutions For Microfinance Organizations

  1. 1. Banking CRM for themicrofinance industryThought Banking Solution | Systems Integration | Consulting | Business Process Outsourcing
  2. 2. The microfinance industry The microfinance industry is growing and has • The sheer number of customers and members the potential to create jobs, reduce poverty and and the small ticket size of loans, deposits, bring social and economic equality by creating insurance policies and payments combine to wealth and woman empowerment. Microfinance make this a high volume-low value game. is a reliable tool to eradicate debt traps, • Inadequate knowledge, infrastructure, provide alternatives, and foster trust and a specialization and tools prevent microfinance savings culture within the local community. It is institutions (MFIs) from offering the right products. estimated that more than 665 million accounts worldwide fall into the microfinance segment • Compared to conventional banking, microfinance with a sizeable proportion belonging to regions is less profitable and less sustainable. in Asia and Africa. There is significant correlation • MFIs are unable to effectively cross sell and between poverty alleviation and the state of up sell to existing customers. the microfinance industry, although it is hard to substantiate this observation (source: Wikipedia). • The microfinance network is not effective at propagating social and welfare schemes and According to the World Bank, the industry is messages. not even close to meeting demand. 500 million people living in poverty could benefit from a • MFIs lack a holistic view of the customer small business loan, and only one-third of the including family history and needs, which world’s population has access to any kind of is necessary in order to provide the right bank account! suggestions and service. While the potential is beyond debate, many problems prevent the industry from realizing the same: Banking CRM Banking CRM is a Customer Relationship • Service requests that can be configured Management (CRM) platform that specializes to capture and track received requests, in banking operations. It has some or all of the pre-configured service requests and workflows below features: for common banking practices, with escalation and routing templates. In addition, the • A centralized customer database with solution has an out of the box offering for data pertaining to unique customer recording complaints, queries and frequently ID, segmentation, household statistics, requested services. demographics, preferences and overall relationship. The customer capture system also • Sales and mass marketing management with usually has the ability to capture regulatory out of the box offers for generic banking compliance data including KYC, blacklist products and the ability to create templates checks and approval by required authorities. out of them. In addition, there is an origination02 Thought Paper
  3. 3. system linked to the sales system to onboard marketing information coupled with analytics the customer directly into the respective on cross sell and up sell of products. account systems. • Accessibility over multiple channels including• A comprehensive 360 degree customer the web, kiosks, smart devices and offline perspective including transaction history, devices apart from traditional channels like segment, product holdings and sales and postal mail, email, telephone, fax and chat.How banking CRM can benefit themicrofinance sectorCustomer understanding information, which is required from a compliance, convenience and businessIdentifying potential customers is of utmost perspective. For example, a customer whoimportance in the microfinance industry, as has been with the institution for many yearsis recognizing their needs in order to and availed of several products and servicesrecommend the right product. A sound need not prove identity every time hemarketing plan is required to attract the right acquires a new product. Also, the institutioncustomers for different product offerings. can offer better rates and service to him, inMarketing campaigns can be delivered recognition of his loyalty.through traditional channels like email,telephone, print, billboards, roadshows and Advisory offerspamphlets. The content and offers of thesecampaigns can be stored in the system for The institution can also enhance routinefuture reference and audit. The response to services, such as collection of loan installmentsa campaign can be recorded in the system, and insurance premiums or query resolution,which can also list out opportunities for with the help of banking CRM. A well-defineddifferent products. The system can store workflow with escalation rules can be put inand track leads, and follow them up. It can place to note requests and ensure that theyalso be set up with a set of standard are attended to within stipulated timelines.questionnaires to capture important customer The customer knowledge gathered by theinformation. These features minimize field system can also guide bank executives asrepresentative training requirements and they deliver advisory services. For example,increase transparency. the system would prompt an executive to offer a new loan product designed for smallCapture onboarding businesses, to a livestock dealer when he callsBefore onboarding customers, details the bank. Or it might recommend an upgradeincluding standard information establishing based on past history.identity, social and domiciliary status, and It is also possible to incentivize customers bygranular financial information on collaterals, rewarding desirable behavior, such as timelyother loans, deposits, insurance products or payment of loan installments, maintenanceremittances can be captured in the system of minimum balance and so on, with loyaltyand a unique customer identifier assigned points that can be redeemed for gifts, cash orfor future transactions. This process helps in extra services.knowing the customer, understanding his needs,qualifying him for various products and above The reach of the microfinance network canall, building a relationship. The unique reference be leveraged to communicate social andnumber enables retrieval of all the above welfare schemes effectively. For example, the Thought Paper 03
  4. 4. availability of a new variety of seeds can be customers” in terms of their profitability, notified only to farmers, or a reminder to revenue generation potential, and overall administer polio drops can be sent only to those viability. This information can be used to with young children. fine tune offerings. For example, the loans of habitual defaulters can be restructured in • Growth planning order to facilitate prompt repayment. The Banking institutions can use CRM system data CRM system can also measure the impact of to strategize growth. For instance, they can microfinance on different sections of society identify the products to market to different and capture customer feedback on the customer segments, and the right time to do same issue. This information can be used to so. Or they could measure staff productivity measure the institution’s success and define and plan hiring requirements accordingly. future direction. One of the biggest advantages of banking CRM is its ability to measure “returns from Conclusion The microfinance industry is faced with great to use the right tools like CRM to augment the challenges. However the changes brought about chances of success in this industry. Banking by the industry on successful implementation CRM has a lot to offer this industry and can and working is greater and hence it is imperative make a positive difference in enabling its success. Shriram Parthasarathy Principal Consultant, Infosys04 Thought Paper
  5. 5. About FinacleFinacle from Infosys partners with banks to transform process, productand customer experience, arming them with ‘accelerated innovation’that is key to building tomorrow’s bank.For more information, contact© 2012 Infosys Limited, Bangalore, India, Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosysacknowledges the proprietary rights of the trademarks and product names of other companies mentioned in this document. Thought Paper 05