Improvisation of customer relation management in banks by using information technology

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1.0 INTRODUCTION

A survey has shown that their strength is in CRM (customer relationship management) related activities, including front-office and back-office automation and integration, customer segmentation, and service. A study in the U.S. banking industry also reported that those banks which develop a customer-centric strategy get higher profits.

Bates, D. W., and A. A. Gawande have stated that information technology has the power to improve the quality, efficiency of banking service and other areas and promise of quality and efficiency gains. Bates, D. W., and A. A. Gawande have stated information technology in banking service has helped the banks to collect, store, retrieve and transfer information in an electronic manner. There are lot of technological advancement that can be done using information technology and that is writing bills and payments and advances in computer. Financial institutions has been relying on processing, analyzing, and Providing information and that has been done to meet customers .The banks were among the earliest adopters of automated information processing technology. The technology development has started with bookkeeping. There has been advancement of electronic payment and there has been encryption technology that has been developed in banks. The internet has been changing the technology development in banks.

2.0 STATEMENT OF PURPOSE

• Develop and implement new customer relationship management strategies, such as customer insight and segmentation;

• Integrate all customer interaction channels, including implementation of additional self-service capabilities;

• Use process design and training solutions to improve workforce skills and efficiency.

RESEARCH QUESTIONS

1. How Customer relationship management could be improved by using information technology?

2. What is the need for Customer relationship in banking sector?

3. What are the problems that could be faced when using information technology in banks?

BACKGROUND to the COMPANY INFORMATION

State Bank of India is the biggest bank in Asia. There have been many branches in India. The role of IT is immense in the banking sector for the last so many years. The database management is done through IT, the online banking, swift transfers; payments mean all the latest developments are due to the technological changes. The State Bank of India has many branches in many rural areas and there has been wide spread increased demand for improved customer relationship using the latest technology and this is the area that would be put under the research study. There have been more private banks in India that has been offering more customer related services and that has been affecting the profit of State Bank of India. There has been change in the minds of customers about the loyalty factor and that had been made possible by the internet revolution.

RELEVANT LITEREATURE

There are companies that are slow or unwilling to modify their business process and support better customer relationships. There are companies that are not willing to acknowledge that they want improvement. The normal Customer relationship implementation processes are(Francis Buttle, 2008)

The customer relationship should be understood as a strategy that will be aligning people, process and technology that will be used to foster customer relationship .The current situation that the company has been following and that can be taken forward by questions like "where are we now" and "why we are here now? There should be clear difference between goal and objective. The goal is that a company may want to acquire new customers. The objective would be that there will be 200 sales that will be done in the first quarter.

The main factors that will be used for increasing the customer relation are increasing customer loyalty, increasing customer retention, increase profit per customer, increase acquisition of customers and increased customer relationship. Customer relationship should be viewed as a expensive positive feature and be managed well in order to switch the focus from the view of marketing into the improvement of "customer relationship value" (Wayland & Cole, 1997,).

Companies establish their sustaining competitive advantage by creating customer intimacy. CRM is both a business and information technology (IT) discipline that uses information systems to integrate all of the business processes surrounding a firm's interactions with its customers in sales, marketing and service. It seeks to recognize customers (for example, who are they, what do they do, and what they like?) from a multifaceted perspective, and it is a source of competitive differentiation (Kalakota & Robinson, 1999). Financial service could be characterized by the large number of customers and the private, fast and personal needs of them, such that the way a firm delivers them is relevant to its EC development (Seybold & Marshak, 1998). With this point, how banks initiate their services, satisfy customers' needs, strengthen the relationship with customers, and develop their CRM-oriented are the sources of competitive advantage. Most CRM projects are highly fragmented, lack customer focus, and then fail to meet their objectives.

CRM puts emphasis on the improvement of product quality and marketing function, then stresses on cross-selling and providing product or services quickly and precisely. Well-known IT applications are the call centre and sales force automation in this extent. Business sales programs and effectiveness, campaign management, channel integration and optimization, product optimization and management, loyalty and retention, cost reduction, customer service, and after-sales support now fall under the IT applications in the CRM deployment. (Badgett et al., 2004).

CRM has to be taken seriously, because the cost of acquiring a new customer is six times more than keeping an old one, such that the longer the customer is retained, the higher the profits are that the company earns. A profit impact of a 5% increase in customer retention can have a significantly bearing from 25% to 55% in industries (Reynolds, 2002).

Internet banking would be increasing the customer relationship of the bank. The internet banking would be said as customers would be given the access to accounts and general information on bank products and services that could be accessed using personal computer (PC). Other internet banking services may include cash management, Wire transfer, automated clearing house (ACH) transactions, bill presentment, payment, balance inquiry, funds transfer, downloading transaction information, bill presentment and payment, loan applications, investment activity, other value added services. There would be providing of home banking services that could be accessed using an internet connection to the bank's home banking system .Banks has used information systems technology to process checks ,use of ATM services and get a printout of reports.

Today, websites, electronic mail, and electronic bill Presentment and payment systems are an important way for banks to reach their customers. There has been growth of internet and customers could access this service using computer from anywhere in the world and internet has made Banking products and services available to more customers by eliminating geographic and proprietary systems barriers and this has been made possible by growth of internet and computer penetration throughout. There has been an expanded market, and getting access to young customers would mean that there has been an increased product that has been offered by the banks. Internet banking has been able to tap the customers more and the customers are at advantage that they need not go out of their home to get the banking done. Internet banking could be also considered as the cheapest form of banking. Banks could be using computer to increase the customer relationship by either adding the technology to the existing banks and create a bank that would be having only internet service.

Customer Relationship Management (CRM) is a comprehensive strategy and process of acquiring, retaining and partnering with customers to create superior values for the company and Customer retention, repurchase decision and word of mouth will be chosen as the main indicators for CRM performance, as proposed by (Wang et al. (2004)).

Customer relationship management can improve customer data and develop customer-centric (Seeman and O'Hara,2006;).

CRM has revealed many aspects that closely resemble the TQM approach since the core focus is on customer, participation and teamwork and also continuous improvement on learning (Curry and Kklou, 2004).

Chang et al., (2005) found out that CRM performance in electronic service can increase internal process efficiency and also improve channel managements and innovations.

From the customer behaviour perspective, CRM performance can increase customer loyalty, retention and satisfaction).

Many studies have validated the success of CRM performance measurement from customer behaviour perspectives which is based on satisfaction, brand loyalty; repurchase intention and word of mouth.

Electronic banking adoption is referred to the variety of electronic banking service usages such as ATM machines, Internet banking, telephone banking and also phone banking services which are developed by certain banks investigated on the impact of relational plan on the adoption of electronic banking. Customer satisfaction with banks only affected through indirect adoption of electronic banking. They also argued that the experience of electronic tool usages, obstacles of machine availabilities, convenient services and friendly interface, Openness, security, and information updates were among the variables which influence customer decision.

Banking in this present era could be said as customers and bank employees would be meeting to face to face in order to check an account or make a transfer. It would be no longer possible to think in terms of paper-based payment instructions. Computers, telecommunications and internet technologies are now central to daily banking operations. There has been a technology that has been used in banks and they would be having an opportunity to make the communication link look more flexible and professional.

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