Technology in Banking-Insight and Foresight for BTA_2011 ... - IDRBT

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Technology in Banking – Insight & Foresight 36 3.4.6. Increase in Cross-sales Banks have utilized data that they have from CRM solutions to improve their cross-selling programs, which range from identifying target segments to marketing new products. In terms of conversion, we see an average of 12% conversion rates from the customers pursued. While some banks have made these initiatives a part of their overall strategy, some others have taken many item-level benefits such as the introduction and selling of new specialized services to HNI/Priority clients as well as the launch of segment-based CASA products. 3.4.7. CRM for Innovation While some banks use CRM primarily for middle/back office systems improvement, including areas of sales force automation, customer service and marketing campaigns management, there are others who have tried product innovation. Having a greater understanding of customers enables banks to introduce new products, which would cater to the needs of customers in a better way. Few banks, if any, have used customer feedback to create a new product or service. 3.4.8. The Future — CRM 2.0 The emergence of Web 2.0 technologies has facilitated CRM 2.0 as the next step in this journey. It is a philosophy and business strategy supported by technology and processes to engage customers in a collaborative interaction that provides mutually beneficial value in a transparent business environment. Banks now see customers as partners in the development and improvement of products, services as well as the company-customer relationship. As traditional CRM is being practiced and put in place, it is imperative for most banks capturing all the data about the customer to give a 360 degree view. The bank is a consumer of all this data created and uses an analytics layer, if at all, on top of this data to run marketing campaigns on customer segments. With the advent of social media, traditional CRM was no longer able to keep pace with customer demands. Earlier an unhappy customer shared his angst with 10 people around him through word of mouth. Now he just posts it on Facebook and reaches out to a few thousand with a click. And the customer knows this! CRM 2.0 or social media CRM is therefore the next frontier, which all banks have to reach to keep pace with the changing environment. India currently has 100 million broadband users and this number is expected to reach 200 million by 2015. These broadband users are also extremely active on social networks. India also has more than 700 million mobile users and, with the digital convergence in full swing, mobile will be the preferred gateway to the internet. Therefore, CRM 2.0 has immense strategic implications for all banks. Banks will need to start monitoring external networks. Just tweeting and blogging will no longer be enough. In banks with CRM platforms, we have seen most of the banks viewing CRM platforms as lead management systems. The high level of integration where the system has a view of each transaction, service query, product and behavior of the customer is still a rarity with only a couple of banks being at that level. Compared to the current methods of having a single view of customers across channels, the insights from CRM 2.0 methods are based on the personal profile of customers; social characteristics associated with them as well as from customer participation, and are therefore more dynamic. Institute for Development & Research in Banking Technology
Technology in Banking – Insight & Foresight 37 CRM 2.0 will focus on collaboration with customers and customer groups. Some banks have started taking baby steps in this direction by starting their Facebook pages. Just creating a page will not suffice. A symbiotic interaction needs to happen wherein the customer plays a role in assisting the bank in improving its products and services and the customer in turn is rewarded by the bank. Net promoter scores will retain their influence, but will be fused with richer metrics to truly gauge customer advocacy. CRM 2.0 also focuses more on customer access and privacy. Customers will be able to decide what products and services they are fine with being pitched by the bank — no longer a blanket yes or no. Sales processes will undergo a sea change with CRM 2.0. The bank will have to be good at social network management and be present at the social networks where their clients are. Banks will need to institute systems of tracking connections and activity in the external world, which are seamlessly in sync with the existing internal sales workflows. Sales measurement metrics will need to undergo changes to compensate for the new way consumers will interact and buy from banks. Sales productivity tools will have to be enhanced to allow better and online access to clientrelated data across various platforms. The old adage of “catch them young and keep them for life” is still true. With the average age of the active social networker being in the twenties, it is imperative that banks have a well thought-out strategy for rolling out CRM 2.0. Banks that have not embarked fully on the traditional CRM may well use this opportunity to leapfrog by implementing CRM 2.0 strategies. 3.5. IT Implementation and Management Over the past few years, the Indian banking and financial services industry has seen transformational changes in how banks are being run from the technological perspective. The implementation of the core banking solution (CBS), in accordance with the guidelines of the Reserve Bank of India, has now been implemented or in the advanced stages of being implantation in most large public sector as well as private sector banks in India. According to the latest guideline issued by the Reserve Bank of India, it has become mandatory for all regional rural banks to be made CBS-compliant by the 30 September 2011 deadline. The following sections of the report have been prepared to understand various aspects of IT implementation and management that banks have used in running their internal IT department at the bank level, which includes the current trend and any emerging trends in the banking technology space. 3.5.1. IT Strategy Alignment with Business Alignment In most large nationalized banks, whether private or public sector, there is a strong emphasis on aligning the IT strategy of the bank with its business goals. The senior management of the bank supports and maintains a culture where business verticals are ready to shift and accept changes brought in by new IT systems and processes, which impacts the operational and technological environment of the bank. Some of the measures that banks have implemented are: The IT strategy of the bank or an IT vision document is typically approved by the board, which serves as a roadmap to the future implementation of IT within the bank. Institute for Development & Research in Banking Technology
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Technology in Banking-Insight and Foresight for BTA_2011 ... - IDRBT

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