customer relation management .docx

8/18/2019 Customer Relation Management .docx

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CRM OF HDFC BANK

CHAPTER 1

INTRODUCTION TO CRM

As the liberalization has taken place the banking industry has been facing competition from theservices of the foreign and private sector banks. This led to the surging of the banks into new

initiatives and strategies. One such initiative for stopping the decrease in market share of Indian

banks and making more profit is C! "Customer elationship !anagement#. $ot only banks

but all other kinds of industries has identified the importance of C! as strategy for retaining

the e%isting customer segments which are profitable and focusing on the long term value of the

customer. As all the products and services offered by the banks being same& the key differentiator

in the banking services which helps developing customer base and sales capacity is C!.

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CRM OF HDFC BANK

Requirements of an effective CRM Structure

An effective C! system consists of the following'

"i#. (ersonal Customer $eeds

) (ersonal contact

) A knowledgeable and reliable banker.

) elevant Information.) Customized and timely solutions

) *alue for money.

"ii#. +usiness Customer $eeds

) A professional partnership approach.

) ,igh levels of information.) Customized and highly responsive service.

) -uality Customer Information.

CRM PROCESS

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CRM OF HDFC BANK

Benefits of CRM

+enefits of C! can be categorized into three groups namely' +enefits for customers& benefits

for employees and benefits for banks.

"I# Benefits for Customers


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CRM OF HDFC BANK

• There is a more coordinated and professional approach to customer contact.

• ith up/to/date customer information& +anks can offer more personalized

services.

• Customers feel empowered if they have greater access to products and

services. 0or e%ample 12 ,ours banking.

• Targeted product and service offerings can be timed to coincide withcustomer events and re3uirements e.g.& 4ducation 5oans and Tourism 5oans.

"ii# Benefits for Em!o"ees

• 4mployees are empowered with the information to deliver high 3uality service

• and meet customer e%pectations.

• 4mployees have more time to serve customers.

• 4mployees have higher satisfaction ratings.

"iii# Benefits for Ban#s

• !anagers are empowered with information that can help them manage

• customer relationships and make better decisions.

• Optimum use of resources.

• Customer satisfaction and increased loyalty.

• Improved customer ac3uisition and cross/selling.

• It helps in capitalizing on short windows of opportunities in the

market.

•

CHAPTER $

OB%ECTI&E AND SCOPE O' STUD(

The main ob6ectives of the study are'

• To analyze the e%tent of the implementation of C! in Indian +anks.

•To study and compare C! implementation between the (ublic and (rivate 7ectorIndian +anks.

• To analyze the perceptions of the customers regarding the impact of C! on service

3uality.

• To evaluate the impact of C! on customer retention.

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CRM OF HDFC BANK

• To e%amine the essential dimensions of service 3uality i.e. AT4/ eliability&

assurance& tangibles& empathy and responsiveness of ,D0C bank and its effect on

customer s satisfaction.‟

• To find out the level of perception of the customers from the service 3uality offered by

the banks.

• To know which service 3uality dimension of the bank is performing well.

• To identify which dimension of service 3uality needs improvement so that the 3uality of

service of ,D0C banks is enhanced.

H(POTHESIS

H"ot)esis 1

Nu!! H"ot)esis* There is no difference in the C! implementation between the (ublic

and (rivate 7ector Indian +anks.

A!ternate H"ot)esis' There is difference in the C! implementation between the (ublic

and (rivate 7ector Indian +anks.

H"ot)esis $

Nu!! H"ot)esis' There is no impact on customer retention between the (ublic and (rivate

7ector Indian +anks.

A!ternate H"ot)esis' There is impact on customer retention between the (ublic and (rivate

7ector Indian +anks.

CHAPTER +

METHODO,O-(

Researc) Desi.n*

A research design is the arrangement of conditions for collection and analysis of data in a manner

that aims to combine relevance to the research purpose with economy in procedure.

esearch in a common parlance is a search for knowledge. esearch is an art of scientific and

systematic investigation. Thus research comprises defining and redefining problems& formulating

"


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$Y#&% OF DA$A

CRM OF HDFC BANK

hypothesis or suggested solutions8 collecting& organizing and evaluating data& making deductions

and reaching conclusions. esearch methodology is the arrangement of condition for collection

and analysis of data in a manner that aims to combine relevance to the research purpose with

economy in procedure. esearch !ethodology is the conceptual structure within which research

is conducted. It constitutes the blueprint for the collection measurement and analysis of the data.

T"es of researc) use/*

Descritive Researc)*

In the study descriptive research design has been used. As descriptive research design is the

description of state of affairs& as it e%ists at present. In this type of research the researcher has no

control over the variables8 he can only report what has happened or what is happening

Descriptive research designs are those design which are concerned with describing the

characteristics of particular individual or of the group. In descriptive and diagnostic study the

researcher must be able to define clearly what he wants to measure and must find ade3uate

method for measuring it.

Sources of Data*

The sources of collection and analysis to be used are those data "a# that have already been

assembled and recorded8 and "b# that still re3uires assembling and recording. The former kind of

data is called 9(rimary Data: while the later kind of data is called 97econdary Data:.

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CRM OF HDFC BANK

I0 Primar" Data*

(rimary data is the information which is received by the researcher from the actual field of

research. The data in the given study are obtained by means of 3uestionnaires. In some fields

primary data are collected through interview and observation methods. The observation method&

for collecting primary data& may be both participant and nonparticipant. 7uch data are known as

primary data. The primary source information is collected through Internet& Direct observation&

-uestionnaires& 7chedule and Interviews methods.

II0 Secon/ar" Data*

7econdary data are the information which is obtained directly. The researcher does not obtain

them himself or directly. 7uch data are generally collected form published and unpublished

material. 7econdary data gathered from information;s collected from the individuals and

institutions through personal diaries& letters and survey documents etc. There are various sources

through which secondary data is collected such as +iographies& Diaries& (ublic ecords&

(ublished Data&


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CRM OF HDFC BANK

) !agazines

) $ewspapers

)


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CRM OF HDFC BANK

changers used to display "show# coins of different countries in big heaps "3uantity# on benches or

tables for the purpose of lending or e%changing.

Definition of a Ban#

O%ford Dictionary defines a bank as =an establishment for custody of money& which it pays out

on customer>s order.=

HD'C Ban#

About

The ,ousing Development 0inance Corporation 5imited ",D0C# was amongst the first to

receive an >in principle> approval from the eserve +ank of India "+I# to set up a bank in the

private sector& as part of the +I>s liberalization of the Indian +anking Industry in ?@@2. The

bank was incorporated in August ?@@2 in the name of >,D0C +ank 5imited>& with its registered

office in !umbai& India. ,D0C +ank commenced operations as a 7cheduled Commercial +ank

in s premier housing finance company and en6oys an impeccable track record in

India as well as in international markets. 7ince its inception in ?@BB& the Corporation has

maintained a consistent and healthy growth in its operations to remain the market leader in

mortgages. Its outstanding loan portfolio covers well over a million dwelling units. ,D0C has

developed significant e%pertise in retail mortgage loans to different market segments and also has

a large corporate client base for its housing related credit facilities. ith its e%perience in the

financial markets& a strong market reputation& large shareholder base and uni3ue consumer

franchise& ,D0C was ideally positioned to promote a bank in the Indian environment.

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CRM OF HDFC BANK

T(PES O' BUSINESS ACTI&ITIES CARRIED OUT B( HD'C BAN

,D0C +ank offers a wide range of commercial and transactional banking services and treasury

products to wholesale and retail customers. The bank has three key business segments'

2)o!esa!e Ban#in. Services

The +ank>s target market ranges from large& blue/chip manufacturing companies in the Indian

corporate to small mid/sized corporate and agric/based businesses. 0or these customers& the

+ank provides a wide range of commercial and transactional banking services& including

working capital finance& trade services& transactional services& cash management& etc. The bank is

also a leading provider of structured solutions& which combine cash management services with

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CRM OF HDFC BANK

vendor and distributor finance for facilitating superior supply chain management for its corporate

customers. +ased on its superior product delivery service levels and strong customer

orientation& the +ank has made significant inroads into the banking consortia of a number of

leading Indian corporate including multinationals& companies from the domestic business houses

and prime public sector companies. It is recognized as a leading provider of cash management

and transactional banking solutions to corporate customers& mutual funds& stock e%change

members and banks.

Retai! Ban#in. Services

The ob6ective of the etail +ank is to provide its target market customers a full range of financial

products and banking services& giving the customer a one/stop window for all hisher banking

re3uirements. The products are backed by world/class service and delivered to customers

through the growing branch network& as well as through alternative delivery channels like AT!s&

(hone +anking& $et +anking and !obile+anking.The ,D0C +ank (referred program for high

net worth individuals& the ,D0C +ank (lus and the Investment Advisory 7ervices programs

have been designed keeping in mind needs of customers who seek distinct financial solutions&

information and advice on various investment avenues. The +ank also has a wide array of retail

loan products including Auto 5oans& 5oans against marketable securities& (ersonal 5oans and

5oans for Two/wheelers. It is also a leading provider of Depository (articipant "D(# services for retail customers& providing customers the facility to hold their investments in electronic

form.,D0C +ank was the first bank in India to launch an International Debit Card in association

with *I7A "*I7A 4lectron# and issues the !asterCard !aestro debit card as well. The +ank

launched its credit card business in late 1EE?. +y !arch 1EE@& the bank had a total card base

"debit and credit cards# of over ?F million. The +ank is also one of the leading players in the

9merchant ac3uiring: business with over BE&EEE (oint/of/sale "(O7# terminals for debit credit

cards acceptance at merchant establishments. Theban is well positioned as a leader in various net

based +1C opportunities including aide range of internet banking services for 0i%ed Deposits&

5oans& +ill (ayments& etc.

Treasur"

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CRM OF HDFC BANK

ithin this business& the bank has three main product areas / 0oreign 4%change and Derivatives&

5ocal Currency !oney !arket Debt 7ecurities& and 43uities. ith the liberalization of the

financial markets in India& corporate need more sophisticated risk management information&

advice and product structures. These and fine pricing on various treasury products are provided

through the bank>s Treasury team. To comply with statutory reserve re3uirements& the bank is

re3uired to hold 1G of its deposits in government securities. The Treasury business is

responsible for managing the return sand market risk on this investment portfolio.

CHAPTER

C)aracteristics of a Ban#

10 Dea!in. in Mone"

+ank is a financial institution which deals with other people>s money i.e. money given by

depositors.

$0 In/ivi/ua! 5 'irm 5 Coman"

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CRM OF HDFC BANK

A bank may be a person& firm or a company. A banking company means a company which is in

the business of banking.

+0 Accetance of Deosit

A bank accepts money from the people in the form of deposits which are usually repayable on

demand or after the e%piry of a fi%ed period. It gives safety to the deposits of its customers. It

also acts as a custodian of funds of its customers.

60 -ivin. A/vances

A bank lends out money in the form of loans to those who re3uire it for different purposes.

70 Pa"ment an/ 2it)/ra8a!

A bank provides easy payment and withdrawal facility to its customers in the form of che3ues

and drafts8 it also brings bank money in circulation. This money is in the form of che3ues& drafts&

etc.

90 A.enc" an/ Uti!it" Services

A bank provides various banking facilities to its customers. They include general utility services

and agency services.

:0 Profit an/ Service Orientation

A bank is a profit seeking institution having service oriented approach.

;0 Ever increasin. 'unctions

+anking is an evolutionary concept. There is continuous e%pansion and diversification as regards

the functions& services and activities of a bank.


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CRM OF HDFC BANK

A bank>s main activity should be to do business of banking which should not be subsidiary to any

other business.

110 Name I/entit"

A bank should always add the word =bank= to its name to enable people to know that it is a bank

and that it is dealing in money

CHAPTER

S2OT ANA,(SIS O' HD'C BAN

Stren.t)s

• ,D0C bank is the second largest private banking sector in India having 1&1E? branches

and B&??E AT!;s

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CRM OF HDFC BANK

• ,D0C bank is located in ?&?B2 cities in India and has more than HEE locations to serve

customers through Telephone banking

• The bank;s AT! card is compatible with all domestic and international *isa!aster card&

*isa 4lectron !aestro& (luscirus and American 4%press. This is one reason for ,D0C

cards to be the most preferred card for shopping and online transactions

• ,D0C bank has the high degree of customer satisfaction when compared to other private

banks

• The attrition rate in ,D0C is low and it is one of the best places to work in private

banking sector

• ,D0C has lots of awards and recognition& it has received +est +ank; award from various

financial rating institutions like Dun and +radstreet& 0inancial e%press& 4uro money

awards for e%cellence& 0inance Asia country awards etc

• ,D0C has good financial advisors in terms of guiding customers towards right

investments

2ea#ness

• ,D0C bank doesn;t have strong presence in ural areas& where as ICICI bank its direct

competitor is e%panding in rural market

• ,D0C cannot en6oy first mover advantage in rural areas. ural people are hard core

loyals in terms of banking services.

• ,D0C lacks in aggressive marketing strategies like ICICI

• The bank focuses mostly on high end clients

• 7ome of the bank;s product categories lack in performance and doesn;t have reach in the

market J The share prices of ,D0C are often fluctuating causing uncertainty for the

investors

Oortunities

• ,D0C bank has better asset 3uality parameters over government banks& hence the profit

growth is likely to increase

• The companies in large and 7!4 are growing at very fast pace. ,D0C has good

reputation in terms of maintaining corporate salary accounts

• ,D0C bank has improved it;s bad debts portfolio and the recovery of bad debts are high

when compared to government banks

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CRM OF HDFC BANK

• ,D0C has very good opportunities in abroad

• Kreater scope for ac3uisitions and strategic alliances due to strong financial position

T)reats

• ,D0C;s nonperforming assets "$(A# increased from E.?H G to E.1EG. Though it is a

slight variation it;s not a good sign for the financial health of the bank

• The non banking financial companies and new age banks are increasing in India J The

,D0C is not able to e%pand its market share as ICICI imposes ma6or threat J The

government banks are trying to modernize to compete with private banks +I has opened

up to B2G for foreign banks to invest in Indian market.

Ro!e of CRM in t)e Ban#in. In/ustr"

A elationship/based !arketing approach has the

following benefits

) Over time& retail bank customers tend to increase

their holding of the other products from across therange of financial products services available.

) 5ong/term customers are more likely to become a

referral source.) The longer a relationship continues8 the better a

bank can understand the customer and hisher needs

preferences& and so greater the opportunity to

tailor products and services and cross/sell the(roduct service range.

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CRM OF HDFC BANK

Customers in long/term relationships are more Comfortable with the service& the organization&

methods And procedures. This helps reduce operating cost and

costs arising out of customer error. ith increased number of banks& products and

services and practically nil switching costs& customers are easily switching banks whenever they

find better services and products. +anks are finding it tough to get new customers& and more

importantly& retain e%isting customers. One of the marketing strategies to meet globalization

increased competition for banks and

other financial institutions is to e%pand to international business through alliances with foreign

counterparts& 6oint ventures& collaborations or by opening branches or

subsidiaries in the selected countries abroad. 0inancial restructuring and organizational

adaptation are the key words for the !anagement to meet the emerging challenges arising out of

globalization. The final

ob6ective is to arrive at the marketing strategies which will influence consumer behaviour

through strategic decision making. 0or the preparation of innovative

marketing strategies for their successful implementation in the market& C! is very much

essential as it can form the basis of.

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CRM OF HDFC BANK

A8ar/s*

A =world/class Indian +ank= is' ,D0C +ank began operations in ?@@ with a

simple mission. (roduct 3uality and service e%cellence& we will help get us there

realize that only has a single/minded focus. Today we are well on their way to

targets that are proud to say toward.

> $=11

+loomberg LT* 0inancial 5eadership Asian +anker 7trongest +ank in Asia

(acific +est +ank Award 1E??

I+A +anking Technology Awards 1E?E winner / year

?# +est Online +ank

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CRM OF HDFC BANK

1# +est Customer Initiative

F# +est Lse of +usiness Intelligence

2# +est isk !anagement 7ystem

# unner / +est 0inancial Inclusion

CRM )e!s HD'C Ban# ac)ieve +9= /e.ree vie8 of customers an/ imrove

rofits

Based on mar,et ca-itali.ation HDFC Ban, is currentl/ t0e larest -riate3an, in t0e countr/ wit0 more t0an 2" million customers4 It 0as an e5tensie

distri3ution networ, of more t0an 2"++ 3ranc0es s-read across 1** cities

and more t0an ""6+++ em-lo/ees4 Around t0ree /ears 3ac,6 in order to

retain its com-etitie adantae6 t0e 3an, felt t0at it needed to 3etter its

customer enaement -rocesses4 7nli,e ot0er 3an,s6 HDFC Ban, did not

want to 3u/ rowt0 at t0e e5-ense of its -ro8ta3ilit/4

Manaement at t0e 3an, ,new t0at onl/ un-arallel customer e5-erience

could -roide a sustained ede muc0 needed to maintain its rowt0 rate in

s-ite of increasin 3alance s0eet si.e4 $0e 3an, found an answer in a two-ron strate/ w0ic0 included raisin t0e 3ar for its internal -rocesses

9alt0ou0 t0e 3an, were alread/ out-erformin t0e industr/: to -resere

-ro8ta3ilit/ and ensurin consistenc/ of information and actions across

c0annels to create an unmatc0ed customer e5-erience ; ainin trust and

lo/alt/ to sustain t0e rowt0 tra


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CRM OF HDFC BANK

,ind and faced tremendous ris, due to in0erent com-le5it/ and tec0noloical

c0allenes6 considerin t0e transformation 0ad to 0a--en across a

eora-0icall/ distri3uted team6 wit0out 0am-erin 3usiness and at a -ace

t0at ,e-t it releant4 Also it needed to streamlinin delieries ,ee-in in

mind t0e readiness and t0e round realities4

Anot0er c0allene was leerain t0e data ware0ouse to 3uild intellience

on customers and de-lo/in t0is information at arious touc0 -oints to 0el-

ma5imi.e customer life c/cle alue4

$0e 3an, selected CRM ne5t=s solution w0ic0 -romised to ful8ll t0e 3an,s

needs4 %ome of t0e ,e/ ca-a3ilities o>ered 3/ t0e solution included?

Customer '+@ iew creatin a uni8ed customer iew 3/ collatin and

massain data from arious sources includin t0e data ware0ouse4

Controllin customer information 3ased on t0e role of users4 &na3lin access

to sinle iew across arious c0annels li,e 3ranc06 -0one 3an,in6 etc

Interated sales -latform Multi;wae -rocess wor,outs to ensure uni8cation

and consolidation of all unstructured -rocesses 9run on e5cel: and semi

automated -rocesses4

#0asin out ' a--lications li,e lead trac,in s/stem6 customer contact

manaement6 etc4 Interatin wit0 ( core and oriin s/stems to -roide end;

to;end status isi3ilit/4 #rocess $A$ uaranteed 3/ alerts and multi;stae

escalations across de-artments and c0annels4 7sin mo3ile two wa/ %M%

ca-a3ilities to create leads6 u-date status6 reuest for customer o>ers6 etc

Customer e5-erience manaement &na3lin im-roed relations0i-

manaement 3/ creatin irtual -ortfolios and accounta3ilit/ &nsurin

information aaila3ilit/ at all customer touc0 -oints to 3oost t0e ualit/ of

interactions &na3lin s/stem drien contact strateies 3ased on customer

3ands to ensure alined actions Focus on roadma- to esta3lis0 CRM ne5t as

a sinle destination for all needs Cross %ellin Ca-a3ilit/ $0e -latform

o-erates across all c0annels6 -roidin lo3al isi3ilit/ and status of o>ers4

arious s/stems interated to -roide eent 3ased trierin suc0 as lare

de-osits6 c0annel usae6 etc mar,etin team continuousl/ enerates cross;

sell o>ers and ne5t 3est -roducts to 3e sold4

$oda/6 CRM ne5t is seen as a star inestment and a mission critical

a--lication t0at t0e 3an, de-ends on4 $0e CRM s/stem led to a 0i0 im-act

transformation w0ic0 resulted in com-lete sales -rocess re;enineerin4 $0e

CRM 0as also im-roed sales re-resentaties= a3ilit/ to cross;sell 3/

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CRM OF HDFC BANK

sini8cantl/ increasin t0e num3er of -ersonali.ed o>ers enerated on

mont0l/ 3asis4

CHAPTER

SU--ESTIONS

?. The banks must use C! software not only core banking software to improve its service

e%perience such as 7A( or (eople 7oft. This software helps in handling large data

volume and integrating with the IT.

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CRM OF HDFC BANK

1. The bank should take care of employee behavior towards the C! and customers as ithas

been seen during the study that many bank employees yet lack customer centricity inproviding

service to the customers.

F. The bank should position itself as a more customer friendly bank as it is the second largest

private sector bank in India.

CHAPTER

CONC,USION

• As we all know that Indian banks are becoming more and more innovative and gradually

dominating the market.

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CRM OF HDFC BANK

• It is an continuous process& more the services will be offered more the customer base will

grow and more the customers grow more the services has to be offered .

• Instead of having broad customer base& the bank;s aim is to get broad loyal customer base

and the same is achieved by offering better service 3uality and customer relationship

management to its customers.

• C! is an important catalyst for the growth of the ,D0C bank. The bank is able to attain

growth as a whole due to its emphasis on the customer centricity as a key ob6ective.

• As the bank is providing multi/channel services through AT!s& internet& phone& and

mobile banking in addition to its e%panding branching network and deeper penetration in

untapped areas& the customer base is increasing and hence the bank;s profitability is

increasing. This ensures the bank;s growth.

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