Investment in CRM: A Strategic Approach for the Indian Banking Sector

Authors: Ms. Shivani Dixit, Dr. Tazyn Rahman

Pages: 1-10

Abstract:

Indian Banks have recorded a phenomenal growth in the past decade with the initiation of Economic Reforms. The banks, both Public and Private, have transformed themselves into profit-oriented business organizations besides playing a developmental role in the economy. In the backdrop of this scenario, this paper emphasizes on the implementation of Customer Relationship Management (CRM) in the banking sector. Time has changed; earlier people were very loyal to their banks but in today‟s competitive era banks cannot expect committed relationship from their clients. With increased number of banks, products and services and practically nil switching costs, customers are easily switching banks whenever they find better services and products. The top concern in the mind of every bank is increasing or at least maintaining the market share in every line of business. To address this challenge, there have been active efforts in the banking circles to opt for a customer-centric business approach. Banks have realized that they need to ensure through their services that the customers do not leave them. So, banks are now stressing on retaining customers and increasing market share and this has contributed to the growth of CRM in the Banking Sector. Implementing CRM involves collecting and reviewing the most relevant customer data. Relevant customer data can uncover needed information about behavior patterns and attitudes. This paper is an effort to highlight the impact of CRM on service quality and customer retention in the banking sector. It also tries to evaluate the major issues and challenges facing the industry in implementing such a strategy.