Journal of Finance and Bank Management

Crm in Banking Sector – A Review
Dr. B. Ravi Kumar

Abstract
Banking is the core of the entire financial services sector. Banking is such an important sector that it touches the life of every human being in some way or the other. Indian Banking Sector what we see as it is today was not the same earlier. Tremendous changes have taken place in this particular sector in such aspects as the way banks operate, in technology, operational speed and most especially in their approach towards dealing with customers, in the last 10 years or so. At a time when the Indian banking sector was monopolized by few public sector banks, the level of attention given to the customer was very low. But in today’s changed scenario, i.e. after the entry of a number of private and foreign banks in the Indian banking sector, there has been a shift in the focus of Indian banks from ‘transaction focus’ to ‘relationship focus’. The cut- throat competition that exists among the various public, private & foreign banks has necessitated them to adopt a strategic approach in dealing with their customers. Today banks are the major followers of Customer Relationship Management practices. “Customer Relationship Management is the process of attracting, maintaining, and enhancing customer relationships”. ---- Berry (1995) Customer Relationship Management or Retention Marketing represents a paradigm shift within marketing away from an acquisition/ transaction focus towards a relationship focus. Building long- term and profitable relationships with chosen customers and getting closer to these customers at every point of contact with them are the two major goals of CRM. The present paper is an attempt made by the author to present the meaning of CRM, regarding how Indian banks have transformed from transaction focus to relationship focus, factors that created a strong need on the part of Indian banks to adopt CRM, the IDIC framework in banking and the relationship marketing strategies that help a banking firm in bonding with its customers.

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