Customer Centricity in Banking Strategic plans for banks and credit unions are replete with references to their superior customer- or member-centricity. Nearly every financial institution says their competitive edge is their customer service. However, when everyone competes on the same thing – and they all claim to be the best – then the only logical conclusion is the vast majority are clearly wrong. A large majority of banks claim they are customer-centric, even while competing with product-centric business strategies like focusing on rates and fees. Far too many banks today fail to define what customer centricity means, nor do they organize their business strategies around what customers truly want, even developing products or services customers have voiced little demand for. When it comes to adjusting their strategy, banks have only a handful of options. They can revisit their strategy and define it differently to reflect a product-centric approach – i.e., lowest cost, unique or specialized products, etc. – or they could double-down on customer centricity and practice what they preach. Assuming they are insistent on customer centricity, what should banks do? Definition of Customer-Centricity First, we need to level-set with a definition of customer-centricity. According to Forbes, customer-centricity is: “The ability of people in an organization to understand customers’ situations, perceptions and expectations. The customer should be at the center of all decisions related to delivering products, services and experiences to create customer satisfaction, loyalty and advocacy.” Customer-centric organizations understand every facet of their customers. Many banks and credit unions measure customer satisfaction just once a year and have call center reports detailing complaints and use that limited analysis to say they understand the customer. Or, worse yet, banking executives often say they know the customers’ needs because they are a customer. There are also variations of, “I know the customer because I’m in the community,” or, “I understand millennials because my children are millennials.” A true customer-centric organization holds the customer as the single most important point when making decisions that will affect the customer. Most publicly-traded organizations are likely to fail this test as revenue, income, cost or overall financial impact most often trump customer needs or wants. Similar attitudes abound in privately-held organizations and even credit unions, which are member owned. If the first question when presenting a business case to the executive team isn’t “How will this affect our customers?” then the organization is not likely to be customer centric. Characteristics of a Customer-Centric Organization Merely saying that an organization is customer-centric and having a pithy tagline doesn’t make an organization so. Organizations that are customer-centric exhibit the following characteristics: 1. Strong Leadership and Strat

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3. Concept of Customer relationship management (CRM)
Concept of customer satisfaction
Challenges in CRM
Why CRM is important?
Implementation process of CRM By Banks
Implementation stages of CRM
Benefits of CRM implementation in Banking
Conclusion
Learning Objectives:

4. Customer relationship management (CRM) refers to the principles, practices and
guidelines that an organization follows when interacting with its customers. From the
organization’s point of view, this entire relationship encompasses direct interacting with
customer, such as sales and service related processes and forecasting and analysis of
customer trends and behaviors. Ultimately CRM services to enhance the customer’s
overall experience.
Concept of Customer Relationship Management:

5. ●Customer satisfaction is the degree of happiness that a customer realize with a
product or service and it is the most important driving force for retention of an
existing customer which in turn results in growth of bank business.
●Customer satisfaction can’t be limited to one short concept and include
different ideas: Customer loyalty, Customer delight and customer retention, to
name of few. Satisfaction is a word that summarize the feelings of customer
that they hold about their experience with a company.
Concept of Customer Satisfaction:

6. Q:How can companies know that they are succeeding in satisfying the
customer?
• If a company knows about customer expectations and attitudes and can meet the
requirements, they are more likely to make successful decisions and increase
customer satisfaction.
Service
Quality
Knowledge
able
Employers
Competitive
pricing
Friendly
Employers
Billing
Clarity
Customer
Satisfaction
• There are many factors that affect
customer satisfaction.
They are:

8.  The major challenges in CRM are integrating customers, products and services and
delivery channels.
 Under e-CRM, the customers are allowed to have dialogue with the operating staff
relating to deposit and loans .
 The benefit that come out of implementing CRM are:
Challenges in CRM:
i. Greater empowerment for users.
ii. Lower cost of service delivery by shifting certain
interactions to self-service and chat.
iii. Better visibility across services, delivery channels.
iv. Gains in customer communication, accountability
and improved organizational efficiency.

9. Why CRM is Important?:
Why
CRM?
Establish a
need based
customer-
centric
business
model Personalize
customer
relationship
at scale
Make
marketing
effects more
effective
Increase
operational
efficiencies
Increasing
competition
in Retail
Banking
Increase
customer
interaction
& customer
satisfaction

10. Establish a need based customer-centric business model: To
put customers at the centre of the business. bank can better
anticipate their needs & engage with customers at the right time
throughout their financial life journey.
Why CRM is Important?:
Personalize customer relationship at scale: CRM can track
customer data across the bank, including service or loan
origination departments. So bankers can get a 360 degree view of
each customer.
Make marketing effects more effective: CRM makes it easy
to create reports highlighting customer data points,
engagement channels, product purchasing trends & more.

11. Why CRM is Important?:
Increase operational efficiencies: Operational efficiencies are basically
managing operational costs for bank in general & delivery cost in particular
as applicable to retail banking. The classic example in branch banking is
shifting the customers to electronic & remote channels like ATM.
Increasing competition in Retail Banking: Competition is buzz
word in retail banking. As retail banking is a profitable business model
for private foreign banks. To retain high net worth individuals, banks
should focus strongly on relationship management with customers.
Increase customer interaction & customer satisfaction: CRM helps
in improving marketing strategies to retain existing customers,
improve customer service, attract new customers, improve sales
process & reduce customer acquisition costs.

12. Implementation process of CRM by Banks:
 The different key issues in the implementation of CRM by banks are discuss below:
 Business Process:- The orientation and the description of the business process is a
key requirement for the customization of the CRM solution for the particular
bank. The evaluation of the current business process is essential to determine the
nature of products the bank wants to offer and the way it wants to develop its
customer portfolio.
 Information Process:- It’s involves the analysis of the existing information
process which the bank is currently working. The integration of these in the CRM
system and the suitable restructuring is essential for implementation of the CRM
system in bank.
 Information systems:- The existing information infrastructure of the bank needs
to be analyzed and the implementation of the CRM infrastructure accordingly
customized.
 Internal Organizational Culture:- The integration of the systems is only one
dimension for successful implementation and there is another important
dimension. The bank’s systems have to get with the organizational change.

13.  There are four stages through which CRM is implemented. This four stages are discuss below:-
Implementation Stages of CRM by Banks:
Identification of customers:- The bank need to identify the customers based on
their products availed and focus of the bank. This will help the banks to focus
the segment they want to target and to use the CRM system to effective target.
Classification of Customers:- The nature of interactions bank has to have with
the above information depending on the profitability and the size of the account
have to be developed and accordingly the CRM database should be updated.
Interaction with the most valued customers:- Banks can segment the whole
market and then looking at the product and service usage of the customers can
develop different kind of marketing strategy and design campaigns to reach
customers.
Customization of Bank Product and Services:- Selection of media mix and
customer interaction points backed by the customers past usage data and
intention forecasts, the product managers can design mass customized products
for each of the target segments and launch campaigns.

14. Customer satisfaction
Increase share-of-wallet
Operational efficiency
Customer focus and retention
Improve customer service
Understand custom
Better relationship marketing
Benefits for employees
Benefits of CRM implementation in Banking:

15. Customer satisfaction: CRM improves customer satisfaction and cross selling potential for the
banks.
Increase share-of-wallet: CRM helps the bank to derive increased share of wallet from the customer.
Operational efficiency: CRM enables financial institutions to give employee’s better training that
helps them face customers more easily.
Customer focus and retention: CRM uses information and analytical tools to secure the customer
focus.
Improve customer service: CRM helps to improve customer service through effective interaction of
all remote delivery channels.
Understand customer value: CRM helps to understand customer life -time value through the
structured data based on a dynamic basis.
Better relationship marketing: It results in better relationship marketing as customer segments are
better target based on the data available in CRM.
Benefits for employees: Employees are empowered with all the crucial and accurate information at
their fingertips to deliver high quality service and meet customer expectations.
Benefits of CRM implementation in Banking:

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