Customer Relationship Management (CRM) in

Banking: A Case Study of ICICI Bank

Focus on ICICI Banks Initiatives
The use of Customer Relationship Management (CRM) in banking has gained importance with the aggressive
strategies for customer acquisition and retention being employed by banks in todays competitive milieu. This has
resulted in the adoption of various CRM initiatives by these banks to enable them achieve their objectives.

The steps that banks follow in implementing Customer Relationship Management (CRM) are:

Identifying CRM initiatives with reference to the objectives to be attained (such as increased number of
customers, enhanced per-customer profitability, etc.),

Setting measurable targets for each initiative in terms of growth in profits, number of customers, etc. and

Evaluating and choosing the appropriate Customer Relationship Management (CRM) package that will help
the company achieve its CRM goals (a comparison of pay-offs against investments could be carried out during
the evaluation exercise).

Customer Relationship Management (CRM) has been deployed in retail banking. The challenges in managing
customer relations in retail banking are due to the multiple products being offered and the diverse channels being
used for the distribution of the products. Customer expectation from banks can be summed up as:

Any time anywhere service, personalized offers, and lower payouts.

Aggressive marketing and promotions on the part of the banks have resulted in most customers happily switching
loyalties to enjoy better privileges, thereby making the task of retaining them more difficult for the banks.

The use of Customer Relationship Management (CRM) in banking has been essentially done for the following
purposes:

Targeting customers: It is necessary for banks to identify potential customers for approaching them with
suitable offers. The transactional data that is generated through customer interactions and also by taking into
account the profile of the customer (such as the lifecycle stage, economic background, family commitments,
etc.) needs to be collated into one database to facilitate its proper analysis. For example, a customer interacts
with the banks for savings accounts, credit cards, home loans, car loans, demat accounts, etc.

the data

generated through all these services needs to be integrated to enable effective targeting. After the integration
is done, a profitability analysis of the customer needs to be undertaken to acquire an understanding of the
profit-worthiness of the customer before targeting him with new offers.

Sales reference material: A consolidated information database on all products, pricing, competitor
information, sales presentations, proposal templates and marketing collateral should be accessible to all the
people concerned. These prove to be very helpful in Sales Force Automation (SFA) wherein the salesperson
gets instantaneous access to all relevant material as and when it is required (especially when he/she is in a
meeting with a client.)

Consistent interface with customers: The communication to customers from various departments like
sales, finance, customer support, etc. should be consistent and not contradictory. Therefore, all departments
should be privy to a unified view of the customer to enable a consistent approach. Removal of inconsistencies
is necessary to ensure that customers are not harassed and frustrated owing to poor internal co-ordination.
This is bound to enhance customer satisfaction. The contact centres used to interface with customers should
ensure consistency in customer interaction, irrespective of the medium used for the interaction such as
telephone, Internet, e-mail, fax, etc.

Banks can use the data on customers to effectively segment the customers before targeting them. Proper analysis
of all available data will enable banks to understand the needs of various customer segments and the issues that
determine value for that segment. Accordingly, suitable campaigns can be designed to address the issues
relevant for that segment and to ensure higher loyalty from these customers. When data analysis is done in the
right manner, it helps in generating opportunities for cross-selling and up-selling.

Read More: Customer Relationship Management in the Banking Sector

ICICI Banks CRM Initiatives
ICICI Bank has to manage more than 13 million customers. The bank has over 550 branches, a network of 2025
ATMs, multiple call centres, Internet banking and mobile banking. Its customers often use multiple channels, and
they are increasingly turning to electronic banking options. Business from the Internet. ATMs and other electronic
channels now comprises more than 50 per cent of all transactions.

In the process of making its business grow to this level, ICICI Bank has distinguished itself from other banks through
its relationship with customers.

The Teradata solution focuses on a Customer Relationship Management (CRM) platform. Information from various
legacy and transaction systems is fed into a single enterprise called wide data warehouse. This allows the bank to

generate a single view of its customers. The warehouse has the capability to integrate data from multiple sources
comprising Oracle and flat files. The Behaviour Explorer enables profiling of customers and querying on various
parameters. These enable the bank staff create suitable campaigns for targeting individual customers on the basis
of their requirements.

The logistics in the system have also led to other benefits like interactive reports, unearthing cross-selling
opportunities as well as finding out about the channel usage undertaken by a segment. The data access was
facilitated through the use of Cognos Power Cubes.

The Benefits of CRM

Customers usage pattern: ICICIs CRM data warehouse integrates data from multiple sources and
enables users to find out about the customers various transactions pertaining to savings accounts, credit
cards, fixed deposits, etc. The warehouse also gives indications regarding the customers channel usage.

New product development: Analysis at ICICI guide product development and marketing campaigns
through Behaviour Explorer, whereby customer profiling can be undertaken by using ad hoc queries. The
products thus created take into account the customers needs and desires, enabling the bank to satisfy
customers through better personalization and customization of services.

Central data management: The initial implementation of CRM allowed ICICI to analyse its customer
database, which includes information from eight separate operations systems including retail banking, bonds,
fixed deposits, retail consumer loans, credit cards, custodial services, online share trading and ATM.

Some Noteworthy CRM Initiatives of ICICI Bank

Mobile ATMs: Customers of ICICI Bank can access their bank accounts through mobile ATMs. These ATMs are kept
in vans and parked at locations that have a high traffic of bank customers such as the commercial areas in a city or
upmarket residential areas ICICI Bank now provides standard ATM facilities through ATM vans. This facility has been
tried at Mumbai, Chandigarh and various places in Kerala during specified timings.
Bulk Deposits: The ICICI Banks Bulk Deposit ATMs enable customers to deposit large amounts at one time. Unlike
conventional ATMs, which are able to accept only 30 notes at a time, these ATMs allow the deposit of huge
amounts. The Bulk Deposit ATM is available in Mumbais Vashi sector branch office of ICICI. The bulk deposit facility
can be availed of by select customers who need to deposit huge amounts of cash. ICICI Bank issues a special card
called the `Deposit Only Card to facilitate this service. This card allows for deposit transactions only. The service is
further facilitated by the provision of special bags at ATMs in which a customer can put his money. After the deposit

slip is filled, the bag can be inserted in the ATM. The transaction slip is then generated by the ATM as an
acknowledgement of the deposit. ICICI Bank also has cash pick-up service for business customers under the
business banking segment.
ATMs for the visually challenged: ICICI Bank has launched ATMs with special voice-guided systems, which guide
a visually challenged person to access ATMs without any help. The jack on the terminal enables headphones to be
connected to it and voice commands enable the customer to transact business. Customers may choose a suitable
language to get voice commands. After the language selection is done, the customer is guided to ensure that the
ATM card is inserted in the right slot and thereafter, guidance is provided for entering the PIN by using the keypad.
A raised button is provided on number 5 to enable users to identify the numbers easily through touch. The slot for
cash collection has such raised `pips that enable easy identification through touch.
Other Services through ATMs: Apart from the usual transactions involving the bank, some other services can
also be availed of by ICICI Bank customers. These include:

Prepaid mobile recharge

Buying and renewing Internet packs (such as those of TATA Indicom Internet service provider and Sify).

Making donations for Tirupati Tirumala Devasthanams, Nathdwara temple and Shri Mata Vaishnodevi
shrine.

Mutual fund transactions, and

Bill payments

Mobile phone as a Virtual Wallet: The mobile phone has been transformed into a virtual wallet a new
innovation in mobile commerce. On September 19, 2005, Airtel, ICICI Bank and VISA announced the launch of
mChq a revolutionary new service which is a credit card using the mobile phone. This is the first mobile-tomobile payment option which enables Airtel customers and ICICI Bank Visa cardholders to pay for their purchases
with their Airtel Mobile phones. The service has eliminated the need for carrying physical cash for making a
purchase and also the problems associated with the point of sale (POS) terminal since the mobile phone services as
a secure POS and a payment mechanism.
Social Events: ICICI Bank organized the largest domestic invitational amateur golf event for HN1 (high-net-worth
individuals) customers. This nation-wide golf tournament had over one lakh high-net-worth clients of ICICI Banks
private banking division participating in the event.
Mobile Banking Benefits: Mobile banking enables the customer to avail of many facilities by just sending an
SMS. These facilities, which are currently offered free of cost, are as follows:

Locating ATM

Locating branch

Locating drop box

Alert facilities like salary credit, account debit/credit, cheque bounce, etc., and

Queries on banking, cards and demat account

Questions
1.

Explain the initiatives take by ICICI Bank to promote Customer Relationship Management (CRM).

2.

Discuss the benefits of the initiatives taken by ICICI Bank to promote Customer Relationship Management
(CRM).

3.

What should be the core elements of CRM that ICICI bank in your opinion should follow, besides what they
are already following to make themselves a distinct bank from their competitors

4.

Outsourcing CRM is one activity that most organizations follow. Is it a viable option. Give your views
keeping in mind the cost involved in implementing CRM and enhancing business also.

Solutions:
About ICICI
India's largest private sector bank and second largest overall in terms of
assets.
Total assets of Rs. 3,562.28 billion (US$ 77 billion)
Profit after tax Rs. 30.19 billion (US$ 648.8 million)2009
ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29%
increase in total income to Rs. 9,712.31 crore
India's largest private sector bank and second largest overall in terms of
assets.
Total assets of Rs. 3,562.28 billion (US$ 77 billion)
Profit after tax Rs. 30.19 billion (US$ 648.8 million)2009

 ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29%
increase in total income to Rs. 9,712.31 crore
ICICI- RETAIL STRATEGY
ICICIs retail strategy was centered around intensive deployment of
technology to help reduce cost of service, increase customer retention, help
in cross selling and up-selling while improving process efficiencies.
The bank looked towards allowing the customers use multiple electronic
channels including internet, ATMs, call centers, contact centers, desktops,
kiosks, mobiles and other hand held devices for conducting financial
transactions.
Why CRM The Changing Environment
1. Increased Competition
2. Growth of Product
3. Diminishing Margins
CRM- THE ICICI EXPERIENCE
CRM at ICICI involves increased communication between the virtual universal
bank and its customers and prospects as well as within the group itself.
The underlying idea is to enhance every instance of contact with the
customer.
ICICI believes that a true customer-centric relationship can only be
accomplished by considering the unique perspectives of every single
customer of the organization.
CRM ROAD MAP OF ICICI
CRM is viewed as a discipline as well as a set of discrete software
technologies, which will focus on automating and improving the business
processes associated with managing customer relationships in the areas of
sales, marketing, customer service and support.
The organizations aims to achieve the end goal of one-to-one marketing.
The CRM SoftwarIt should allow ICICI to engage in one-to-one marketing by
tracking complete customer life-cycle history.

 To begin with, it will automate process-flow tracking in the product sales

process, and be able to generate customized reports and promote cross
selling.
It will also enable efficient campaign management by providing a software
interface for definition, tracking, execution and analysis of campaigns.
e applications will facilitate the coordination of multiple business functions.
Coordinate multiple channels of communication with the customer to carry
out customer management more efficiently.
THE CRM BUSINESS CYCLE

COMPONENTS OF CRM CYCLE

Understand and Differentiate.
Develop and Customise.
Interact and Deliver.
Acquire and Retain.
Understand and Differentiate
Organizations need to understand their customers in order to have a
relationship with them.
Profiling to understand demographics, purchase patterns and channel
preference.

 Primary research to capture needs and attitude.

Customer valuation to understand profitability, as well as lifetime value or
long-term potential.
The ICICI Groups customers need to see that the firm is differentiating
service and communications, based on their learning independently and on
the customer expectation and the expected values expected.
Develop and Customise:
In a customer-focused world, product and channel development has to follow
the customers lead, identify customers wants, determine the value and
desire of the customer, etc.
Organizations are increasingly developing products and services, and even
new channels based on customer needs and service expectations.
ICICI believes that the extent of customization should be based on the
potential value delivered by the customer segment.
Interact and Deliver:
To foster relationships, organizations need to insure that:
All areas of the organization have easy access to relevant, actionable
customer information.
All areas are trained how to use customer information to tailor
interactions based on both customer needs potential customer value.
ICICI is strongly of the opinion that value is not just based on the price of the
product or the discounts offered but are based on a number of factors
including the quality of products and services, convenience, speed, ease of
use, responsiveness, and service excellence.
Acquire and Retain :
The more ICICI learns about customers, the easier it is to pinpoint those that
are producing the greatest value for the organization.
They aim to continue to learn more about each customer segment and use it
for successful customer retention.
As ICICI moves step further in CRM they hopes to gain insight and
understanding that enhance the subsequent efforts. The organization shall
become increasingly sophisticated in the implementation of CRM processes,
and over a period of time shall become increasingly profitable by doing so.

 Successful customer retention is based on the organization's ability to

constantly deliver, based on three principles:
Maintain interaction; never stop listening.
Continue to deliver on the customers definition of value.
Customers change as they move through differing stages of their lives,
which implies that the firm needs to be alert for changes and to modify
its services and value propositions as they change.
IMPLEMENTING CRM :
There are five interrelated areas:

Business Focus.

Organizational Structure.
Business Metrics.
Marketing Focus.
Technology.
The key to building the CRM action plan was in understanding with the
organization that stood relative to each of the five aspects of change.
Interviews with key individuals throughout the organization helped identify
different initiatives that have been launched, all focused on CRM.
The next step in the process was a Gap Analysis, this analysis helped
identify the CRM organizational holes:
Marketing, sales and service practices.
Collection, capture, processing and deployment of customer information.
Distribution and operations effectiveness at customer touch points.
CRM Strategies:
Key drivers of customer loyalty:1. Positive staff attitude
2. Honesty integrity and reliability
3. Proactive Advice

4. Consistent delivery of superiority quality service

5. After sale service
6. A effective complaints resolution policy
ICICI use three steps to build customer relationship :
Determine mutually satisfying goals between organization and customers.
Establish and maintain customer relationship.
Produce positive feelings in the organization and the customers.
Steps minimizing the work regarding adoption of CRM strategy-:
Identification of proper CRM initiatives
Implementing adequate technologies in order to assist CRM initiative
Setting standards (targets) for each initiative and each person involved in
that circle
Evaluating actual performance with the standard or benchmark
Taking corrective actions to improve deviations
Steps followed in implementing CRM :1. Identify CRM initiatives with reference to the attained (such as increased no.
of customers.)
2. Setting measurable targets for each initiative in terms of growth in profits ,
no. of customers
3. Evaluating and choosing the appropriate CRM package that will help the
company achieve its CRM goal ( A comparison of pay-offs against investment
could be carried out during the evaluation exercise.)
Benefits of effective CRM:

Reduced costs, because the right things are being done (ie., effective
and efficient operation)

Increased customer satisfaction, because they are getting exactly what they
want
Ensuring that the focus of the organization is external
Growth in numbers of customers

 Maximisation of opportunities (eg., increased services, referrals, etc.)

Increased access to a source of market and competitor information
long term profitability and sustainability
ICICI Banks CRM initiative:
1. Mobile ATMs
2. Bulk Deposits
3. ATMs for the visually challenged
4. Other services through ATMs
-

Prepaid mobile recharge

Buying and renewing internet packs

Mutual Fund transaction

Bill Payments

5. Mobile phone as virtual Wallet

6. Customer touch points.
7. Customer feedback and actions on these feedbacks.
8. Telephonic awareness regarding new services.
9. Latest ads.
10.
Warm wishes to customers on different festivals.
Use of CRM in ICICI Banking :
1. Targeting Customers
2. Sales reference Material
3. Consistent interface with customers
Benefits of CRM :
1. Customers usage pattern
2. New product development
3. Central data management

Conclusion
Customer Relationship Management is concerned with attracting, maintaining
and enhancing customer relationship. CRM enables the marketer to estimate
the customers sentiments and buying intentions so that the customer can be
provided with products and services before they starts demanding.
Customers are the backbone of any kind of business activities, maintaining
relationship with them yield better result.