Customer Relationship Management (CRM) in the banking sector is very different as compared to that of other industries. In this article, we will explore the same via this case study of the CRM of ICICI Bank Ltd.For the Indian banking sector, CRM is the integration of relationship marketing and technology. It has the ability to dynamically change the marketing practices of banks to be able to facilitate business growth via the effective management of the financial assets of customers, the systematic collection, analysis, & dissemination of customer, and the usage of customer information for customer acquisition, retention, and provision of improved & personalized customer service. Hence, CRM has become an important facet for the banking sector in the present scenario that is characterized by technological advancements, competition, and changing demands of customers.
ICICI Bank is among the largest private-sector banks in India based on consolidated assets. As of June 30, 2019, the bank’s consolidated total assets stood at Rs.12.50 trillion. At present, ICICI Bank has a network of 5,275 branches and 15,589 ATMs across India.ICICI Bank, along with its subsidiaries, offers a wide range of banking and financial services, which include retail banking, commercial banking, corporate & project finance, insurance, insurance, working capital financial, private equity, treasury products & services, and broking.ICICI Bank has presence in 17 countries, including India. The bank’s equity shares are listed in India on the National Stock Exchange of India Limited and Bombay Stock Exchange. The bank’s American Depositary Receipts (ADRs) are listed on the New York Stock Exchange. This is the first Indian Bank to be listed on the New York Stock Exchange.
CRM at ICICI Bank Ltd.
1. Understanding Customers and Customer Differentiation
ICICI Bank understands the importance of understanding customers to develop a strong relationship with them. Hence, it engages in customer profiling to understand the purchase patterns, demographics, and channel preferences of customers. In addition, CRM has enabled ICICI bank in the valuation of its customers based on the profitability they bring as well as determine the Customer Lifetime Value (CLV).
2. Development & Customization of Services
ICICI Bank has always acknowledged the fact that the business environment is customer-centric, i.e., products & services must be customized as per the needs and preferences of customers. Hence, the bank has always focused on understanding the evolving needs of its customers to be able to match their service expectations.
3. Effective Customer Interaction
To foster strong relationships with its customers, the bank has ensured that all of its employees across the board have easy access to relevant customer information. In addition, employees of the bank are trained on the effective usage of this information to tailor their interactions with various types of customers based on the latter’s needs and potential CLV.
4. Processes & Tools for CRM at ICICI Bank
a. Customer application form
Opening an account at ICICI Bank requires persons to fill an application form with not only their address and other contact details, but also information pertaining to their average monthly income and lifestyle. This enables the bank to determine what product to offer. It also enables the bank to understand what the customer is likely to want or need in terms of the various services offered by the bank, for instance, credit card, personal loan, investment options, insurance, etc.
b. Centralized software for data management
The data collected in customer application forms and feedback forms is saved in one centralized server, which makes it accessible by any ICICI Bank employee from any branch. After appropriate analysis of this data, the team is able to determine which products to offer specific customers. In case of high-value customers, more personalized services, such as Privilege Banking, are offered.
c. Feedback formsICICI Bank distributes a large number of feedback forms at all branches. These forms are designed to gather customer feedback pertaining to the various services offered by the bank, the efficiency of its technologies (net banking, mobile app, etc.), as well as the behavior of its staff and their promptness in solving the grievances of customers.
d. Cross-sellingBased on customer information, credit history, financial status, and other data collected from the customer, the bank offers other products or services to the customer, which he/she has not opted for. For example, in case a customer holds a savings account with the bank, the bank will encourage him/her to opt for its other services such as fixed depsits, recurring deposits, insurance, etc., depending upon the customer value. However, the bank does not offer cross-selling to each customer. It only markets its other services to high-value and loyal customers.
e. ClusteringICICI Bank is the perfect example of industrial cluster-based customer segmentation. The bank customizes its service approach by segmenting its customers based on their industries and businesses. This makes it easy for the bank to offer customized services to the needs to specific clusters. For instance, ICICI Bank offers support to export companies by financing pre-shipment orders without any collateral. In addition, the bank is known to garner equity stakes in IT startups. In this manner, the bank follows a “beyond lending” approach for the support of various SMEs. It offers SMEs of different industry clusters a wide variety of services such as cash management, trade services, banking services, checking of accounts, etc. This has enabled the bank to garner an SME client base of close to 1 million!
f. Wide range of offeringsApart from the usual service offerings of banks, such as savings accounts, current accounts, fixed depsits, debit & credit cards, insurance, and the like, ICICI Bank offers certain unique products for customers, some of which have been listed below:
i. iWishiWish is a flexible Recurring Deposit (RD) facility that enables customers to save up for a particular goal in a fun way. Customers can set a financial/saving goal and add money to their iWish RD account as and when they want, unlike traditional RDs which require a standing instruction. This RD can also be encashed at any time, and offers attractive interest rates.
ii. eLockereLocker, a service offered by ICICIdirect.com, enables customers to save scanned copies of their important documents, which can be easily retrieved as and when required. It enables customers to store scanned copies of their PAN Card, Aadhar Card, Passport, medical reports, property agreements, etc. securely in their ICICI direct account. This eliminates the need for carrying around physical copies of these documents or soft copies in USB drives, etc.
iii. iMobileiMobile is the mobile banking app offered by ICICI Bank, which enables customers to carry out practically all banking transactions via the internet. These include, money transfer to ICICI or non-ICICI Bank accounts, credit card payments, online shopping transactions, management of fixed deposits, opening of new fixed & recurring deposits, encashment of these deposits, and the payment of utility bills, insurance premiums, etc. This app has enabled ICICI Bank customers to carry out practically all savings account transactions by the click of a button! Thus, this app has eliminated the need for customers to stand in long queues in banks. It has an extremely user-friendly interface. It also enables customers to reach the bank’s customer care via an AI-powered chatbot as well as the team of customer service executives if needed.
iv. Senior Citizen ServicesICICI Bank offers services tailored for senior citizens taking into account their concerns regarding the security of their money and choosing the right investments to maximize their returns. These services are tailored to bring more enjoyment and convenience to the bank’s customers aged 60 years and above.
v. Young StarsYoung Stars savings account is designed to teach children the value of money management. Children aged 1 to 18 years are eligible for this account, and their parent/guardian can operate this account on their behalf. What’s more, this account comes with a debit card with a daily withdrawal/transaction limit of Rs. 2,500 to Rs. 5,000. Money saved in this account can be converted into a money multiplier fixed deposit upon request, and doing so will enable the earning of a higher interest rate as compared to that of a savings account. As most businesses, ICICI Bank offers certain unique services, such as those listed above, to delight customers and stand out in the market. Thus, we can see that innovation is the need of the hour even in the banking sector! For more such updates on technology & business, do visit the blog section of our website.
Jaya Sathaye is a Project Manager with the digital marketing team at EC Infosloutions Pvt. Ltd. Pune. She has extensive experience in market research, and has created engaging content for a wide range of industries, which include software solutions, CRM, cloud computing, e-commerce, the success stories of industry-leading players, beauty, fashion, etc. Being an avid reader, Jaya enjoys sharing what she learns with people through her writing work.