case study on crm in banking sector

The Importance of CRM in the Banking Sector and Solutions That Help the Industry Evolve

• December 23
• CRM Configuration

This year wasn’t easy for any industry, and the banking sector is not an exception. The leaders of the industry weighed in on post-Covid recovery efforts aimed to save banks from bankruptcy and keep their clients financially secured. One of the main purposes of CRM is to retain existing clients and ease onboarding of the new ones. Banks need their customers to stay alive and it’s the reason why CRM and banking can’t exist without one another. In this article, we’ll uncover the key challenges every player in the banking industry meets when it comes to adopting CRM solutions and what benefits can be delivered.

What is a CRM in the Banking Industry?

In the banking industry, one of the biggest business challenges is understanding customers’ demands and meeting clients’ expectations. Banks should not only focus on providing valuable services to the customers, but also focusing on maintaining a long and good relationship with their clients. 

CRM in the banking sector allows banking organizations to build a customer-focused business framework to understand the customer’s needs and demands and, more importantly, meet them with your banking and financial services.

Just like any organization’s success, high customer satisfaction and retention are critical for a bank’s success in today’s competitive market scenario. According to a study by Reichheld and Sasser , banking businesses can observe an improvement in the profit margins by up to 35%, just from the 5% growth in customer retention rate.

Unlike personal banking, it’s more difficult for business bankers to offer current account services or business lending. You require more in-depth knowledge of the client’s business, niche, market situation, and tailor-made solutions to offer good financial advice and onboard a business client. 

This is why CRM has become more crucial than ever before in the highly competitive banking industry, where you need a customer-centric approach to manage customers, understand their expectations and offer personalized solutions and win more clients and retain them.

Challenges of CRM in the Banking Industry

Just like any other business, banks face several challenges when looking to adopt CRM software.

Data security

The banking industry is very sensitive to data security and aims to deliver an extra level of control over access to their records. Besides their clients’ personal information and account records, the entire banking system should be well protected against cyber-attacks and malicious software. Modern CRM platform providers are well aware of these concerns and provide excellent security measures, from role-based access permission to encrypted transactions and data backups, to ensure high level of information security.

Integration with the existing tech stack

Pretty much every financial and banking organization has a legacy IT infrastructure and tech stack that might be complicated to interfere with. Most of the outdated software wasn’t built to work together with the modern CRM systems. It means that any bank can face the problem of integrating new solutions with the existing ones without any data loss and system failures. The good news is CRM specialists such as OMI can help you seamlessly integrate a CRM system of your choice into your company’s infrastructure and make sure the new solution works perfectly. 

So when does the banking industry need to consider CRM adoption? The answer is pretty simple – ASAP, because lack of data visibility provided by CRM can cost your organization loses in clients and profits. Moreover, lack of customer-related information doesn’t allow you to thoroughly analyze your customers’ behavior and provide them with the quality of services they seek.

Benefits of CRM in the Banking Sector

Both customers and banking organizations can benefit from using CRM. The first ones get more personalized high-quality services, while the second ones get better control of their operations and can deliver this type of service. Here are the main benefits the banking sector can gain from using CRM systems:

Get and qualify more leads

CRM system helps you to reach out to your leads as quickly as possible to either help them with their challenges or understand that your service is not what they are looking for. As a result, the lead qualification process is sped up and your sales department can focus on converting leads into actual sales.

Build strong relationships with clients 

Launch marketing campaigns, streamline communication, and provide a personalized approach to increase your customers’ satisfaction rates and make them get what they need and when they need it. Your clients will appreciate your care and attention.

Improve staff’s productivity

CRMs help to streamline processes across various departments, as well as to eliminate repetitive tasks and let your staff focus more on clients and improve their performance.

Get valuable insights 

The system analyzes data on your customers’ behavior such as chosen types of credit and debit cards, number of transactions, type of transactions, etc. This data can be later used by your sales and marketing departments to improve your services.

Drive new business opportunities

Every industry needs to keep up with the constantly changing economy and market demands. Analyzed customers’ data can be used to introduce new solutions to fulfill your clients’ needs. As a result, your business credibility, loyalty, and awareness increase letting potential customers know that they can trust your organization.

CRM Solutions for Banks

OMI provides one of the best CRM services for banks and financial institutions and offers customizable solutions to make sure their functionality perfectly aligns with your organization’s needs.

Salesforce for Banks

Salesforce is one of the best CRM software for the banking industry and offers a great number of tools and services that can be used across banking organizations for process management and team collaboration. 

Salesforce allows banks to gain a complete view of each client by unifying all your banking operations – in-branch as well as digital channels. Third-party integrations give you endless possibilities to build sophisticated tasks management systems for sales, marketing, and customer service that can help your bank to increase process efficiency.

Process automation in the banking sector is essential to eliminate many tedious tasks that are essential to reduce operations costs and improve work efficiency and gain more clients faster. Salesforce comes with a Marketing Cloud module, that allows you to manage everything from marketing intelligence to customer retention, and community engagement, for a centralized platform.

Salesforce consultants at OMI help you evaluate your business state and challenges and pick the right CRM configuration.

Microsoft Dynamics 365 for Banks

Microsoft Dynamics 365 is another great CRM solution that features a variety of tools for all kinds of business needs, from internal process management to customer engagement. 

Microsoft Dynamics 365 along with the “Banking Accelerator” feature, allows banks to quickly develop intelligent financial services and innovative solutions powered by industry-standard data models. This data-driven “Banking Accelerator” helps banks to offer an improved banking experience – that helps them to stand out from their competitors and boost customer acquisition, loyalty and retention. 

Communication process automation and customer insights help banks to offer customized deals and personalized experiences for financial services. Positive customer experiences directly impact long-term customer relationships that result in higher retention rates and accelerate business growth.

OMI can help your organization to implement MS Dynamics and power up your teams with full-feature tools to help your company grow. Make sure to reach out to one of your specialists and we’ll be glad to discuss your project in more detail.

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Please note you do not have access to teaching notes, electronic customer relationship management (e-crm), customer experience and customer satisfaction: evidence from the banking industry.

Benchmarking: An International Journal

ISSN : 1463-5771

Article publication date: 27 May 2021

Issue publication date: 10 February 2022

The purpose of this paper was to examine the relationship between electronic customer relationship management (E-CRM) and customer satisfaction through the mediating role of customer experience in the banking industry.

Design/methodology/approach

The data were collected from customers of 10 banks (5 public and 5 private sector banks) of Delhi, India. In total, 836 useable structured questionnaires were filled, and the data were analyzed using structural equation modeling (SEM) through AMOS.

The results revealed that customer experience mediated the relationship between E-CRM and customer satisfaction confirming well with the hypothesized model.

Research limitations/implications

The model was tested in the domain of banking industry; future results may be conducted in different domains for improving generalizability. A comparative study between public and private sector banks in terms of E-CRM, customer experience and customer satisfaction could also be conducted.

Originality/value

The study was the first to unequivocally analyze the influence of the E-CRM on customer satisfaction through customer experience in the banking industry. The study also introduced stimulus-organism-response (S-O-R) model as a theoretical support to associate E-CRM to customer satisfaction through customer experience. Thus, this study will enhance the current knowledge base and will also aid E-CRM managers amid decision-making process.

• Customer experience
• Customer satisfaction
• Banking industry

Kumar, P. , Mokha, A.K. and Pattnaik, S.C. (2022), "Electronic customer relationship management (E-CRM), customer experience and customer satisfaction: evidence from the banking industry", Benchmarking: An International Journal , Vol. 29 No. 2, pp. 551-572. https://doi.org/10.1108/BIJ-10-2020-0528

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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Customer relationship management: A case study of a Greek bank

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• Published: 01 December 2006
• Volume 11 , pages 116–124, ( 2006 )

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Today, banks are facing an aggressive competition and they have to make efforts to survive in a competitive and uncertain market place. Banks have realised that managing customer relationships is a very important factor for their success.Customer relationship management (CRM) is a strategy that can help them to build long-lasting relationships with their customers and increase their profits through the right management system and the application of customer-focused strategies. CRM in the banking sector is of strategic importance. In this study, a single descriptive case study of one major Greek bank that has implemented CRM is presented. The aim of this study is to analyse the design and implementation of CRM in the bank, identify the benefits, the problems, as well as the success and failure factors of the implementation and develop a better understanding of CRM impact on banking competitiveness as well as provide a greater understanding of what constitutes good CRM practices.

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2 has a degree in engineering from the National Technical University of Athens (NTUA) and an MBA from the Athens University of Economic and Business, direction General Management. His areas of specialization include Customer Relationship Management (CRM) applications, Electronic Commerce and Quality Assurance. Michalokopoulos is occupied in the Technical Studies Department of the National Printing House of Greece, conducting technical and economical studies.

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Blery, E., Michalakopoulos, M. Customer relationship management: A case study of a Greek bank. J Financ Serv Mark 11 , 116–124 (2006). https://doi.org/10.1057/palgrave.fsm.4760014

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Received : 21 February 2006

Published : 01 December 2006

Issue Date : 01 November 2006

DOI : https://doi.org/10.1057/palgrave.fsm.4760014

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The banking sector’s future is shaped by digital business models. Digitization has caused a shift in customers’ behavior and preferences for conventional financial services. It has also elevated the competition by putting pressure on banks to become “digital first” to stay competitive. 

73% of bank customers use digital services at least once a month, and the global digital banking market is estimated to reach 12 trillion USD by 2026.  

As time goes on, we can expect many banks to evolve into tech companies that provide digital services, utilizing their extensive customer base and broad distribution networks. Many banking organizations have adopted customer-focused technology such as a CRM to improve their internal infrastructure and gain a competitive edge. If you’re still on the fence or are looking to adopt a tool, this article shares the advantages of a CRM in the banking sector to help you make a call!  

Before we get into the advantages, let’s understand the challenges that are slowing down banking organizations.  

Key challenges faced by the banking sector 

Lack of digitization is one of the key issues that negatively affects customer satisfaction in the banking sector. It limits access to services, causes inconvenience, creates security risks, and makes it difficult to compare products and services. Customers may be frustrated, dissatisfied, and may even lose trust in the bank due to the lack of digital services.  

Banks also face operational issues without the right digital tools to mediate back-end processes and customer-facing functions.  

These include: 

• Customer dissatisfaction: Customers are becoming increasingly accustomed to the convenience of digital services and expect the same level of service from their banks. Banks that do not digitize their services risk losing customers to more digitally-savvy competitors. 
• Inefficient processes: Banks that rely on manual processes are prone to errors, delays, and higher costs. Digitization can streamline processes and make them more efficient. 
• Competition from FinTech: Financial technology (FinTech) companies are entering the market and challenging traditional banks with their innovative, digital-first business models. Banks that do not digitize risk losing market share to these competitors. 
• Security concerns: As more financial transactions are conducted online; the threat of cyber-attacks and data breaches increases. Banks that do not invest in digital security risk damaging their reputation and losing customer trust. 
• Inability to scale: Digitization offers banks the ability to scale their business as efficiently as their tech-savvy competitors. Without it, they can’t reach new customers and expand their offerings more easily. 

In conclusion, traditional banks are sorely lacking in both the software tools and the digital literacy that is required to compete with the modern fintech institutions. A Banking Customer Relationship Management (CRM) solution can play a significant role in the digitization of the banking sector by addressing several key challenges faced by banks. A CRM solution can help banks digitize their services and improve the overall customer experience , streamline processes, increase efficiency, improve cross-selling and upselling , and enhance customer engagement . 

What is a Banking CRM?  

A Banking CRM is a centralized system that integrates with other banking software to provide a comprehensive view of every customer account. It records every customer interaction, including deposits, loan requests, and other pre-determined actions. 

It is a software tool designed specifically for the banking sector that helps banks manage their customer interactions and relationships. It helps banks understand their customers’ needs and preferences, automate and streamline key processes, and provide a more personalized customer experience. 

A banking CRM solution typically integrates with other systems used by banks, such as core banking systems and marketing automation tools , to provide a comprehensive view of customer interactions and data. It can also help banks engage customers through multiple channels , such as email, social media, and mobile, and provide real-time insights into customer interactions and feedback. 

10 Advantages of CRM in the Banking Sector

Here are some of the key benefits of implementing a dedicated banking CRM solution.  

1. A complete 360-degree view of every customer 

A comprehensive overview of each customer can be obtained through a banking CRM . This is achieved by integrating the CRM with various banking software applications, creating a unified system that offers a single view of all customer accounts. 

Any pre-determined actions taken by customers, such as using an ATM or inquiring about a specific loan, can be recorded in the CRM. This allows businesses to gain deeper insights into customers’ habits and personal preferences, enabling them to match financial products to their goals more easily. 

2. Personalize customer journeys 

Given the abundance of private banks available, customers often use multiple banks to meet their various financial needs, rather than relying on a single bank. To stand out from the competition, providing a personalized customer experience is crucial. 

A banking CRM eliminates gaps in the customer journey and allows banks to offer assistance from the moment a customer opens an account until they make transactions, apply for loans, and beyond. This helps banks value their customers’ business and meet their financial needs in a timely and efficient manner. Additionally, regularly following up with customers demonstrates that the bank cares about their relationship. 

3. Better customer segmentation  

Banks should aim for a customer-focused business model that is tailored to their needs. A banking CRM helps categorize customers based on various factors such as gender, demographics, age, income, credit rating, and more. It also facilitates segmentation based on investment preferences, investment size, and length of the customer relationship. 

This classification serves as a specific parameter to build a personalized approach. Doing so, significantly aid banks in reaching out to customers and fostering business relationships.

4. A boost in loan sales 

By using an appropriate Banking CRM, banks can deliver a digital-focused banking experience that customers expect. A CRM helps sales executives understand the intent for the customer, the type of loan he needs, previous engagements with the customer to estimate behavioral patterns, and other such insights to strategically sell. A banking CRM can also help in the context of omni-channel customer engagement, opportunity management, reports, lead management, and more.

5. Improve sales and marketing performance  

The data accessible through the CRM tool can be integrated into reports that provide a thorough and strategic understanding of your customers. Bankers can effortlessly identify patterns, promotional campaigns, and areas of improvement to develop new strategies and customize future marketing initiatives. 

Banks can leverage the information in their customer profiles to discover potential cross-selling and upselling prospects. 

For instance, when a customer makes a deposit at the bank, the teller can access their complete profile and inform them of new products they may be eligible for or interested in, such as credit cards or exclusive loans. 

6. Higher customer loyalty  

With a Banking CRM solution in place, banking agents have access to a complete history of a customer’s interactions and activities. This enables them to assist the customer, resolving any issues and transforming challenges quickly and efficiently into opportunities for building loyalty and satisfaction. 

To keep potential customers engaged, it is crucial to maintain consistent communication. A Banking CRM allows you to create personalized customer journeys and trigger automated emails based on specific actions. Dynamic templates can also be created to send offers tailored to the customer’s website activity. 

Additionally, instant alerts can be set up to notify the appropriate team member when a lead performs a sales-friendly action. For example, if a prospect begins filling out a loan application but doesn’t complete it, an automated email can be sent or a salesperson can be notified to follow up manually. 

7. Simplify the underwriting process  

Traditional methods of the loan origination process involves manual background verification through tele calling, which can be time-consuming and prone to errors. A robust banking CRM streamlines the entire process, making it easier for banks and their tele calling teams to have insight on past interactions with a borrower along with their financial portfolio for better decision making. 

Furthermore, it’s important for banks to evaluate the eligibility of a loan applicant. Banks have their own criteria, such as credit score, income, employment, etc. With a CRM, the eligibility check of potential borrowers can be automated with knock-out rules, leads can be distributed to relationship managers efficiently, and much more. 

8. Better customer service with reports and analytics 

The use of a real-time Banking CRM system makes it simple for bank representatives to record customer information and makes follow-ups much easier. They can also determine the products that are generating the most revenue in different locations. This helps them keep track of what is successful and what is not. 

For example, a significant increase in loan disbursals in a specific area may indicate a positive impact, and they can easily find out why. If there is a decrease in credit card purchases, they can offer ones with more discounts. 

With online banking readily accessible, bankers should be able to provide personalized services and experiences to their customers proactively. The omnichannel experience of a CRM system enables efficient management of customer interactions through calls, chat, email, social media, and mobile applications, thereby enhancing customer service. 

9. Improve cross-department collaborations  

The CRM tool can simplify a banker’s life by centralizing all data in one place. It helps keep all bank departments on the same page, eliminating the need for customers to go from department to department. The right CRM can also provide a digital experience that matches the expectations of customers in a face-to-face encounter with their banker. 

The CRM can track data from multiple departments, enabling it to prepare future customers. Interdepartmental leads can also be smoothly managed without having to start a new conversation each time. 

10. Prevents customer churn 

The CRM tool provides real-time data that allows banks to make informed decisions about their next steps. The key is to remember effective strategies boost customer satisfaction! By prioritizing customer needs and resolving issues promptly, a bank can differentiate itself from its competitors. 

A Banking CRM can highlight touchpoints, negative interactions, or areas of concerns to reduce customer churn . By tracking lead activity and status, these issues can be resolved early on to retain your relationship with the customer and may even improve it. 

Well, these advantages can turn your business around but before you get to these results, you need to implement the right banking CRM for your business. But don’t worry, the next segment will address all your concerns about implementing a banking CRM.  

Implementing a Banking CRM solution 

To implement a Banking CRM, one needs to define their goals and objectives, identify the target audience, evaluate CRM options, plan for data migration, train employees, launch and continuously monitor how it impacts performance. It is a complex process that requires careful planning and execution to ensure its success

Rethinking legacy workflows for automation  

Traditional banks’ workflows must be optimized for automation. This can eliminate numerous manual procedures and force many employees to change positions. Initial training is also required for the implementation of a banking CRM. 

Here are a few measures banks may take to improve their workflow for automation. 

• Evaluate current processes   Take a look at your present procedures to discover which are out of date and need to be improved. 
• Determine your pain points   Evaluate the bottlenecks in your present workflows that are impeding efficiency and production. 
• Examine the impact   Figure out how your existing procedures affect customer experience and overall business success. 
• Reassess business requirements   Structure your company’s requirements and identify what modifications are required to fulfil your current demands and goals. 
• Create a new workflow   Create a new process that is ideal for automation, integrating the most up-to-date tools and techniques found in a banking CRM. 
• Test and refine   Put the new workflow through its paces to uncover flaws and refine it as needed. 
• Train staff   Finally, offer personnel with training on the new workflows and procedures to enable a seamless transition. 

In a financial organization, rethinking old procedures for automation should be done in stages. It can, however, assist to streamline procedures, boost efficiency, and improve the customer experience. To establish an automated process, a comprehensive strategy including the latest technologies and best practices is required. 

What to look for in a banking CRM? 

While most banks have their own requirements, all banking CRM solutions should have some core features. Understanding these features and what works for your business can be overwhelming, but you can check out this guide to before finalizing a CRM.  

Here are the 10 key CRM features that are key for banking organizations:   

• Customization: The CRM should be customizable to fit the specific needs of the bank and its customers. Every bank has its specific set of requirements, and you need to check that the CRM of your choice will offer the same. 
• User-friendly interface: The system should have an intuitive and user-friendly interface that is easy to use and navigate. Banks have customers aging from young adults to the elderly with varying levels of digital literacy. The solution should have an UI that everyone can use. 
• Integration: The CRM should integrate seamlessly with other bank systems such as core banking, loan management, and reporting systems. It should also have APIs for integration with other auxiliary services to provide improved social engagement and customer service.  
• Data Management: Your chosen platform should provide robust data management capabilities, including data capture, storage, analysis, and reporting. 
• Automation: Tools to automate repetitive tasks and workflows , freeing up staff time to focus on high-value activities. 
• Lead Management: A banking CRM will help employ a comprehensive approach to lead management, right from lead capture to nurture!
• Campaign management: The CRM should provide robust campaign management capabilities, including the ability to design, execute, and measure the success of marketing campaigns. 
• Reporting and analytics: Reporting and analytics capabilities, including the ability to generate customer-specific reports and analyze customer behavior . 
• Security: Security features to protect customer data and ensure compliance with relevant regulations. 
• Mobile access: The platform should be accessible via mobile devices to allow bank staff to access customer information and manage customer interactions while on-the-go. 

Closing thoughts 

A Banking CRM is vital for banking services because it enables banks to manage their client connections effectively and efficiently. It offers a consolidated platform for storing customer data and recording interactions, which can then be analyzed to determine consumer behavior and preferences. This data can then be utilized to enhance the customer experience, boost customer loyalty, and drive revenue development.  

LeadSquared’s tailored Banking CRM covers all the features you need and more configured to your business requirements. You can check out the product specifications, implementation period, and pricing by getting in touch with our team today!  

Rangan is a researcher currently pursuing a Ph.D. in Machine Learning for Healthcare. He got a Master's and a Bachelor's degree in Computer Science and Engineering. He's passionate about all things computers, particularly software development, and loves cycling.

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Home » Management Case Studies » Customer Relationship Management (CRM) in Banking: A Case Study of ICICI Bank

Customer Relationship Management (CRM) in Banking: A Case Study of ICICI Bank

Focus on ICICI Bank’s 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 today’s 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 Bank’s 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 : ICICI’s CRM data warehouse integrates data from multiple sources and enables users to find out about the customer’s various transactions pertaining to savings accounts, credit cards, fixed deposits, etc.   The warehouse also gives indications regarding the customer’s 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 customer’s 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 Bank’s 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 Mumbai’s 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-to-mobile 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 Bank’s 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
• Explain the initiatives take by ICICI Bank to promote Customer Relationship Management (CRM).
• Discuss the benefits of the initiatives taken by ICICI Bank to promote Customer Relationship Management (CRM).
• 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
• 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.

Related posts:

• Case Study of Global Knowledge: Technology as an Effective Ingredient of Customer Relationship Management (CRM)
• Customer Relationship Management (CRM) in the Banking Sector
• Customer Relationship Management (CRM) in Indian Banking Sector
• Need of Customer Relationship Management (CRM) in Banks
• Introduction to Customer Relationship Management (CRM)
• Case study- “Merger of HDFC Bank and Times Bank”
• What is Electronic Customer Relationship Management (eCRM)?
• Indian banking system: Development banks: Export-import bank of India (EXIM Bank)
• Case Study: L’Oreal’s Customer- Based Brand Equity (CBBE) Model
• Case Study on Information Systems: Integrated Customer Ordering Service at Marks & Spencer

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Analytics transformation in wealth management

The wealth management industry is typically seen as embodying old-fashioned values and providing discrete, tailored services. These attributes remain valuable parts of the business, but for many clients, they are no longer sufficient. In a highly connected world, people want faster and more convenient offerings and a cutting-edge digital experience. Amid rising competition, established wealth managers need to keep pace with new offerings as they retain the values that set them apart.

About the authors

This article is a collaborative effort by Anutosh Banerjee , Fumiaki Katsuki , Vishal Kaushik, Aditya Saxena, Sanchit Suneja, and Renny Thomas .

Wealth managers are unlikely to be able to serve modern clients effectively without a digitized operating model. This will support advisory and non-advisory activities and service everchanging investment preferences. Some leading managers are building modular data and IT architectures, which enable smart decision-making, personalization at scale, and more extensive product offerings. 1 For an in-depth look at how some of these elements are being developed in an overall banking context, see our collection “ Building the AI bank of the future ,” May 2021, mckinsey.com. The changes are also helping them meet their regulatory obligations, boosting the productivity of relationship managers (RMs), and lifting compressed margins.

For wealth managers interested in pursuing these benefits, this article lays out the potential of deploying advanced analytics and offers a playbook of measures that wealth managers should consider including in a digital transformation.

The case for advanced analytics

Meeting the needs of today’s customers requires a business model that is at the same time efficient and adaptable to individual clients. Wealth managers are finding success with two approaches:

• Serve clients across the wealth continuum on a flat-fee advisory basis. Instead of the still-prevalent product-focused model, wealth managers need to build in pricing flexibility aligned to clients’ needs at every stage of their lives. An increasingly common pricing model is for clients to negotiate a flat fee based on the value of their investments. To maintain revenues with this model, wealth managers need to create new efficiencies and ensure RMs are more productive, which means spending more time with clients.
• Embrace personalization aligned to client life stages and goals. Today’s customers are increasingly dissatisfied with a one-size-fits-all service model, so wealth managers should consider transitioning to needs-based personalization. This requires RMs to get comfortable with a wider range of solutions, from the simplest products to complex higher-yielding investments (private markets, venture capital, pre-IPO, and structured products). In addition, RMs must be equipped to help clients make complex investment decisions, supported by analytics.

In today’s context, each of these goals is achievable only with advanced capabilities in data and analytics, especially targeting relationship management.

Focus on relationship management

Modernization can be game changing when it targets the role of RMs. Based on conversations with industry participants, we estimate that RMs typically spend 60 to 70 percent of their time on non-revenue-generating activities, amid rising regulatory and compliance obligations (Exhibit 1). One reason is that most still work with legacy IT systems or even spreadsheets. As clients demand more engagement and remote channel options, that needs to change.

A few leading wealth managers are using technology to provide RMs with the tools to serve clients more efficiently and effectively. Some have taken a zero-based approach, rebuilding their tech stacks and embracing advanced analytics to inform more personalized services. By providing targeted solutions, these firms have been able to boost revenues and reduce operational costs.

Clear benefits of being more client focused

The benefits of digitization are relevant in most markets, but the potential to leverage digitization to achieve a significant performance uplift is especially great in regions where wealth managers have not yet seized the opportunity. In Asia, for example, many wealth managers still need to fully embrace digital ways of working (Exhibit 2). We estimate that IT-based transformations could create some $40 billion to $45 billion of incremental value for wealth managers serving high-net-worth individuals in Asia, equating to roughly 25 basis points on a wealth pool of $17 trillion. 2 Wealth management penetration in the region is 35 to 40 percent, but for the purposes of the calculation, we assume 100 percent of high-networth individuals’ personal financial assets (investable assets of more than $1 million).

Would you like to learn more about our Financial Services Practice ?

Drilling down in the potential gains from data and analytics, we see benefits in three key areas: acquisition and onboarding, engagement and deepening of client relationships, and servicing and retention.

Acquisition and onboarding. Basic acquisition and onboarding applications include client discovery, risk profiling, account opening, and onboarding. RMs and investment teams can use analytics for lead generation, share-of-wallet modeling, and automated proposals. There are also multiple applications in investment management, risk, and compliance, including social-profile checking, anti-money-laundering and know your customer, and fraud protection.

How analytics creates sustainable impact: Two examples from Asia

One leading Asian wealth manager deployed an analytics-led program to produce granular client insights that enabled it to offer responsive, timely, and personalized services to client microsegments. The bank leveraged personalization at scale to boost assets under management by 30 to 40 percent per client in six to eight months.

A second wealth manager created the position of chief investment officer to inform a bankwide view of asset classes and geographies. The CIO used analytics to link product selection to the “house view,” ensuring consistency across model portfolios.

Engagement and deepening. Client-focused applications include personalized research, portfolio management, and notifications. RMs and investment teams can implement client clustering, propensity modeling, recommendation engines, and digital performance management (see sidebar “How analytics creates sustainable impact: Two examples from Asia”). In investment management, risk, and compliance, there are opportunities to de-bias investment decisions, data analysis, and trade execution.

Servicing and retention. Client-related applications include portfolio simulations and optimization, as well as self-execution of trades. RMs can leverage applications such as churn predictors and work planners, while investment management, risk, and compliance can scale up portfolio planning and trade surveillance.

A playbook for analytics-driven wealth management

Early success stories are encouraging, but they are the exception rather than the rule. More often, firms have started the transformation journey but have faltered along the way. Common reasons include a lack of ownership at senior levels and budgetary or strategic restraints that prevent project teams from executing effectively.

The challenges of transforming service models are significant but not insurmountable. Indeed, as analytics use cases become more pervasive, implementation at scale becomes more achievable. In the following paragraphs, we present five ingredients of an analytics-based transformation (Exhibit 3). These can be supported by strong leadership, a rigorous focus on outcomes, and a willingness to embrace new ways of working. Indeed, managers who execute effectively will get ahead of the competition and be much more adept in meeting client needs.

Set a leadership vision

Analytics-driven transformations are often restricted to narrow silos occupied by a few committed experts. As a result, applications fail to pick up enough momentum to make a real difference to performance. Conversely, if support for change programs comes from the top and is guided by an outcomes-driven approach, the business can break away from entrenched operating norms and reset for structural change. With that in mind, executive teams should communicate a vision that can be cascaded through the business. They should also create a safe environment, or sandbox, for business lines to experiment before scaling.

Plot the change journey

Wealth managers have applied advanced analytics to achieving different objectives. Some have found that the application of advanced analytics to business problems delivers significant value and enables them to make better decisions faster and more consistently. Others are using data and advanced analytics to improve sales and marketing, inform investment decision-making, and boost RM productivity.

Any plan for data-driven change must fit the organization’s business model. Implementation will vary based on the technical feasibility, data accuracy and accessibility, time to impact, scalability, and availability of funds. The first few use cases will set the mood and direction, so careful thought is required ahead of action.

One common impediment to scaling is the lack of a single metric to describe impact, which makes it hard for tech teams to communicate benefits. Still, there are workarounds. Financial key performance indicators (KPIs) can show flows across key mandates or volumes of advisory, rather than execution-driven assets under management. Nonfinancial metrics can focus on cross-sell ratios, increased client retention, number of RMs trained, or adoption rates for solutions. Other helpful evaluations include customer satisfaction scores, new trust-based RM-client relationships, time to market, and cultural shifts. Progress on these measures will boost organizational conviction that transformation is beneficial.

The value of personal advice: Wealth management through the pandemic

Build a strong foundation, leading with technology.

Data and technology together form the backbone that supports analytics-led transformation. A strong analytics backbone requires a rigorous standard of data management, coupled with informed decisions about the IT applications and systems to employ.

A digital approach to client-centric servicing

A leading bank created a digital and analytics-powered application that ingests internal and external data points, enabling it to identify “hidden affluence” among its clients.

Another bank combined demographic data with information from client conversations to generate real-time product recommendations and facilitate cross-selling. To continuously train the recommendation engine, the bank built a central data lake—consolidated, centralized storage for raw, unstructured, semistructured, and structured data from multiple sources—so the system has an ever-growing set of data to work from. It then pushed product recommendations through multiple client channels.

A leading investment bank continuously scrapes more than 2,000 financial news sources and more than 800 blogs, stock message sites, and social-media platforms. This exercise helped to enrich the data used by the analytics engine to assess sentiment and inform insights on stocks, bonds, commodities, countries, currencies, and cryptocurrencies.

Wealth managers are routinely in touch with their clients offline. These interactions elicit significant information about client preferences and requirements, but the information is often stored on paper or in RMs’ heads. To mine this knowledge fully, wealth managers must capture it digitally and convert it into a structured format that can be processed to create insights and personalized services (see sidebar “A digital approach to client-centric servicing”). In doing so, they need to put systems in place to ingest, store, and organize the data in line with regulatory obligations while ensuring the data are accurate, available, and accessible.

On the technology side, some leading wealth managers use natural-language processing to analyze text and voice data and identify personalized triggers and insights. Others are building feedback loops across channels to train artificial intelligence algorithms. Technologies can also be applied to processes: robotic process automation, for example, can replace routine manual labor and mental processing in regulatory compliance, risk assessment, reporting, and query management.

Deployment of data-driven decision-making requires scalable, adaptable, and resilient core technology components—a unified data and technology stack that connects across IT activities. 3 Sven Blumberg, Rich Isenberg, Dave Kerr, Milan Mitra, and Renny Thomas, “ Beyond digital transformations: Modernizing core technology for the AI bank of the future ,” April 2021, McKinsey.com. This will enable managers to adopt a tech-first approach to designing customer journeys.

In building data and IT architecture, wealth managers require a basic tool kit with four key components:

• a rationalized IT stack to create a common front-and back-end platform and a unified resource for mobile and web applications
• a scalable data platform with modular data pipelines and application-programming-interface (API)-based microservices for building and deploying analytics solutions at scale
• a semi-autonomous lab environment to enable experimentation, coupled with an at-scale factory environment for production of analytics solutions
• a highly scalable distributed network on the cloud to respond to variable demand for data storage and processing

In parallel to assembling these components, banks must consolidate data from across geographies and business lines. This will enable analysts to elicit insights based on the maximum amount of information. Some leading players first experiment in a sandbox environment and work with external partners to acquire the necessary skills, after which they scale up incrementally.

Build the team and prioritize change management

It is not easy to scale and sustain analytics impact. Organizational silos and cultural resistance are common inhibiting factors, while the vital role that RMs play in forming and maintaining relationships must be adapted to the new environment. Indeed, RMs must be front and center of the transformation process. For this, organizations need effective team building and change management.

Team building. A productive approach to team building is to create cross-functional squads with a range of talents (Exhibit 4). Product owners and designers should be responsible for ensuring that the team meets the needs of its clients (RMs or end clients) and stays focused on delivering value. Data scientists and data engineers implement use cases and check that insights are generated as data are ingested—a minimal-viable-product (MVP) approach. IT architects and software engineers, meanwhile, build the slick interfaces and back-end systems that deliver insights to clients across channels.

How three Asian wealth managers engaged clients and boosted RM productivity

A leading private bank deployed machine learning to generate next-best conversation ideas. It built propensity models and analyzed customer clusters to identify anchor clients and learn from transaction patterns.

Another private bank built a digital workbench that enables RMs to serve clients via a single platform. The workbench was integrated with a centrally hosted recommendation engine that provides personalized recommendations based on life events and transaction data.

A third private bank used explanatory and predictive modeling to identify “moments of truth.” These informed RM coverage and outreach strategy, which helped the bank develop initiatives to support growth and focus RMs on high-value activities.

A core objective should be to explore analytics and AI use cases that boost RM productivity (see sidebar “How three Asian wealth managers engaged clients and boosted RM productivity”). To that end, the squad should embed business and channel management teams so that ideas are aligned with RM client services. Several firms have found that involving RMs and other domain experts in squads leads to significant improvements in data interpretation and modeling.

In many cases, assembling productive squads will require new talent. In particular, banks will need data scientists to be responsible for building analytics software and data engineers to scope and build data pipelines and data architecture. Translators, who act as conduits between the business and technology teams, will be critical for ensuring that squads understand business needs. Finally, squads need IT skill sets to ensure that analytics and digital solutions are compatible with core data and technology stacks.

The best approach to talent acquisition is to take baby steps: get one squad right, foster RM adoption, and then gradually expand capabilities as use cases multiply and are scaled up. Some of the required skill sets are in high demand, so outsourcing may be a realistic early option. In the longer term, however, it makes sense to build internally.

Change management. Relationship managers should be encouraged to embrace analytics and convinced that new applications lead to better services and higher levels of performance. Change management strategies can help. Examples include creating teams of “influencers,” running capability-building sessions, developing change narratives that generate widespread excitement, redefining roles, and aligning performance with financial or nonfinancial awards.

Institutionalize new ways of working

Analytics-driven transformation at scale should be predicated on collaboration, team self-steering, and an iterative approach to problem-solving—elements of the so-called agile approach, which originated in software development. In running agile sprints, it pays to keep business needs in sight, accepting that failure is part of the process. Two-week sprints are usually sufficient to get pilots up and running, and the aim should be to produce an MVP with every sprint.

Wealth managers can apply these basic principles via four process disciplines:

• Inspect and adapt. Daily check-ins will ensure that teams identify roadblocks, such as product backlogs, and maintain their focus on goals.
• Engage end users. Sprint reviews with end users, stakeholders, and sponsors enable teams to gather feedback and bake in recommendations.
• Embed a sense of unity and purpose. Teams should hold retrospectives to incorporate learnings.
• Institutionalize support infrastructure. Agile tooling (for example, Confluence, Jira, and Zeplin) will facilitate experimentation and support remote working where necessary.

Organizations using agile operating models must embrace flexible learning. This is a departure from traditional waterfall-based approaches, in which decision-making occurs at the beginning of each project. In agile, capability building and a relentless focus on change management will be vital elements of optimizing the program. To cement the relationship between innovation and growth, leading firms also assign KPIs to application rollouts, and they reward decision makers based on the value created.

Most wealth managers would say they have already embarked on an analytics journey; many have begun deploying digital applications in various aspects of their businesses. Often, however, the whole system is less than the sum of its parts, and people remain attached to established ways of working. To make a leap forward, wealth managers should commit to bold agendas that will support the scaling up of analytics-driven approaches.

Anutosh Banerjee is a partner in McKinsey’s Singapore office, where Vishal Kaushik and Aditya Saxena are associate partners; Fumiaki Katsuki is a partner in the Hanoi office; and Sanchit Suneja is an associate partner in the Mumbai office, where Renny Thomas is a senior partner.

The authors wish to thank Tiffany Kwok and Charu Singhal for their contributions to this article.

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