"Customer Relationship Management in Banking Sector"
International Research Symposium in Service Management ISSN 1694-0938 Customer Relationship Management as an Integrated Approach in the Banking Sector A Case Study of a local bank in Mauritius Bhisham Ramkelawon Research Assistant University of Mauritius Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 1.0 Abstract The battle for banks to gain a greater slice of the market share is increasing year by year as with the globalization effect banks are finding it increasingly difficult to meet the high growth of customer expectations. In order to boost their economic lines banks are increasingly looking at ways of achieving organic growth through acquisition of new customers and retaining existing customers. In this 21St century one of the approaches which are creating the buzz in the banking sector is Customer Relationship Management (CRM). Banks are realising that the magical formulae for attaining success in such a competitive environment is to focus on maintaining relationship with customers leading to customer loyalty and retention. In fact customer relationship management involves organising activities around the sole customer which can ensure differentiation at each point of sales by creating a unique customer experience to customer. But in reality the paradox is that since the word customer is associated with CRM, many banks are under the misconception that they secure competitiveness by implementing CRM as a piece of software. As such the main objective behind this study is to analyse whether banks are really implementing the whole concept and philosophy of CRM as a means of securing competitive advantage. To achieve this objective, the research design will consist of both exploratory and descriptive research whereby different aspects with regards to CRM in the banking sector have been extracted from literature review and tested on a sample size of both employees and customers. These results were discussed and analysed so as to get an indication of how far CRM is strategically implanted to secure competitive advantage or it’s just as an old wine in a new bottle concept. Based on the findings, a set of recommendations will be made so as to pinpoint how CRM can be rendered can be used to secure competitiveness. Finally a model will be proposed which will lay out specific issues which banks have to address so that CRM can be used as an integrated approach to bring out competitiveness in the banking sector. Key words: Customer Relationship Management, Competitive Advantage, Customer Experience Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 2.0 Background of Study The financial accomplishment achieved in 1980 created a hasty growth of several financial service sectors in the island of Mauritius. Offshore banking, offshore insurance, international financial services, international trading, operational headquarters, shipping and ship management, international licensing and franchising and aircraft financing and leasing are few of the financial service sectors that perform offshore activities in Mauritius. The Mauritius financial services sector yet remains an important mainstay of the economy and is one of the fastest expanding sectors, with a growth rate of 6.7% in 2006, according to the jurisdiction's government. For the past three years, financial intermediation has grown at an average annual rate of 6% compared to an average GDP growth of around 4%. For the same period, investment in that sector has increased in real terms by around 60%. In view of this, the service sector is becoming more important and companies operating in this sector will have to develop new means of building their competitive advantage. The key to do this is through effective customer relationships and since time immemorial business men have been trading and building relationship through the barter system and it continued like this. But in this century, companies are making hot talk about building relationships with the new concept CRM-Customer Relationship Management, but yet the adaptability of the concept remains like an old vine in a new bottle one, whereby they are not making the real sense and use of the strategy for internal and external benefit. Thus this study will bring in light the concept of CRM in the banking sector and will show down the real applicability of the concept with an example from a local bank and a series of recommendations have been listed out for consideration. 3.0 Introduction Just imagine entering in a bank getting instant personalised service at the counters, while being served, the banker informs detailed recent accounts and provides special products. Just before you leave a coffee is served while getting details of new products. Well the 21st century, this is now possible and with the end of Henri Ford mass production era and the start of the customization whereby focusing business activities, the world is becoming more as a cyber island and businesses are realising that managing customer will ensure a sound performance to fight against competition both the local and external market. But customers, customers and customers, academics such as Peter Drucker and others have continuously stating that “A business exists to create a customer” but in reality companies are yet to find a fit between business activities and customer needs. What is noticeable is that businesses are using one off promotions to attract customers but nothing is done strategically to retain these customers. One of the approaches that companies are jumping through is the adoption of customer relationship management (CRM) to allow better slice of customer data. Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 CRM epitomizes a marriage of relationship marketing with the emerging information technology and add value to the customer by creating the right experience (Peppers, 2002). According to Harvard Business Review 2000, CRM is an approach which companies can implement to boost profits by almost 100 percent by retaining just five percent more of customers. In fact with increase competition in the retail banking sector has intensified the use of CRM as a means of securing competitive advantage. The throw of the dice is that if bank maintains customer relationships, it will create mutually beneficial relationship which will lead to customer loyalty. By managing customer relationships, banks such as Mauritius Commercial Bank and State Bank Mauritius have influenced the evoked sets of customers by emotionally attached customers to their brand name which increased barrier to entry for other bank to get hold of the market. However the fittest win is to be at the expense of rivals and banks should implement CRM in order to achieve competitive advantage. Thus the rationale behind this study is to analyse whether banks are right implementing CRM as a means of gaining competitive advantage or remains only bit and pieces in the bank. To support this rationale, the main objectives of the study run as follows: 2.1 Main Objectives of Study To assess the awareness of customer relationship management at bank To analyse the level of customer centric from both customer and employee point of view To evaluate the service quality offered by bank To evaluate how far the bank is using E-CRM to build lasting relationship relationships To evaluate the effectiveness of complaint request management of bank 2.0 Literature Review 2.1 What is Customer Relationship Management? CRM is a management approach that enables organisations to identify, attract, and increase retention of profitable customers through improved relationship management (Hobby, 1999) CRM is the utilisation of customer related information or knowledge to deliver relevant products or services to customers (Levine, 2000). Thus CRM is a set of business processes which focus on capture, retain and provide service to customers. The customer is at the heart as the approach aims at putting customer first by shifting the role of marketing from manipulating the customer to genuine customer involvement communicating and sharing the knowledge (Parvatiyar and Jagdish, 2001).In other words, CRM is about managing the customer portfolio efficiently and effectively by designing business policies which focus around the customer. CRM consists of three main strategies, the Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 acquiring, enhancing and retaining which companies can adopt as shown in the diagram below (Kalakota, 2002) Figure 1 : CRM Kolkata 2002 However a company can adopt more than one strategy depending on the customer portfolio analysis. Nowadays internet is changing what is possible and what is expected in terms of CRM (Tamminga and O’Halloram, 2002). 2.2 Emergence of CRM The primary reason for the emergence of CRM is the change in the marketing environment. As shown in the figure below the marketing model is changing from the product-centered approach to customer- centered approach (Gilbert, 2003) Hence companies need to create customised offers for customers and ensure relationship by providing better customer service and management of customer expectations (Reichheld & Sassar 1990). In fact customers are the "raison de etre" and marketing should be devoted at enhancing customer relationships. But one should take note of the increasing use of the internet which is changing what is Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 possible and what is expected in terms of CRM as technological advances in global networks, convergence and improved interactivity are to explain the growth of CRM (Peppard, 2000). Now companies should go beyond CRM towards whole relationship management by managing superior value chain delivers a high level of product quality, and service quality. 2.3 Why the need for the secret formula Well CRM in itself enables business to understand which customers are worthwhile to acquire to keep and which have untapped potential, (Gal and Rogers, 1999). CRM provides a 360 degree of the customer as shown in the diagram below: Figure 3: CRM 360 degree Kolkata, 2000 By providing 360 degree view of customers, CRM can increase the economic worth of a business by improving the lifetime value of customer by dispatching the right people, with the right parts at the right time to ensure customer satisfaction (Greenberg, 2004). According to Swift (2001), companies can gain benefits such as: • Lower cost of recruiting customers • No need to acquire many customers • Reduced cost of sales • Higher customer profitability This is supported by Haward Business Review study in 2000 which shows: • It costs 7 times more to attract a new customer than to serve an old one • A satisfied customer in 10 years will bring 100 more customers to the company Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 • 20% of the company's loyal customers account for 80% of its revenue (Pareto's principal) • On an average a customer tells 9-10 people about a problem On top of that, implementing a CRM approach can achieve value for the company as shown on the diagram below: Figure 4: CRM adding value by Heinze, 2004 As shown above, CRM will provide and the economically advantage by enhancing the company value by creating competitive advantage and customer retention (Heinze et al, 2004). But yet a number of reasons why CRM implementations may not always fulfil their potential (Turban et al (2004) • Failing to provide a consistently good experience for the customer • Top management failing to buy into CRM strategies • CRM ultimately depends on the quality of its employees • Technologies will guarantee success 2.4 CRM in banking sector Financial services are in a structural change whereby competition and customer demands are increasing. As such financial companies need to focus shift from product provider to relationship one on core competencies in order to deliver to the value of the customers (Lehman, 2000) as shown in the diagram above: Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 Figure 5: Change in financial sector by Lehman 2000 In fact such a change is supported environment and steep competition stressed the importance of customer satisfaction and need for increasing market share and profitability in the banking sector (Anderson et al, 1994). Banks are slipping on every measure of relationship quality (Mishkin, 2001) and the need for CRM can be justified as stated below: • The longer a relationship the better a bank can understand customer needs greater opportunity to cross-sell products and services • Customers in long-term relationships are more comfortable with the service • Long-term customers are more likely to become a referral source. • Determining which products and services should be sold to profitable client Thus retail banks are facing greater need to manage customer relationships so as to remain competitive in the market (Ryals and Payne, 2001). Payne and Frow (2005) CRM at a strategic level in any organisation consist of five main processes that need to be managed as shown in the diagram below: Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 Figure 6: CRM strategic level by Payne and Frow 2005 As shown in the diagram above, these five processes namely strategy development, value creation, multichannel creation, information management and performance assessment focus on developing strong relationships with customers (Payne and Flow, 2005). 3.0 Overview of the Banking Sector in Mauritius The recent years have seen a new wave in the economy of Mauritius with the rapid growth of the financial services sector. According to the Mauritius Chambers of Commerce this sector has grown by 15.8 % from Rs 11.5 to R 13.3 bn in 2007. The banking sector is quite strong and got great prospects Table 1: SWOT Analysis The year 2007 had been very dynamic as banks devising massive branding strategies to build up market share. As shown in the table above, the strength of the banking sector is mainly the brand equity that MCB, SBM and HSBC have created in the market. The main weakness is the late entry that new banks take to impose themselves in the market. But yet the main threat is lack of products differentiations which make it difficult for banks to gain competitiveness. But yet this sector offers scope for new markets such as Islamic banking. All these factors are rendering this sector more dynamic. As shown in the Porter Analysis below, the threat of new entrance is higher with the opening of commercial banks such as Afr Asia which offers a different set of services. The threat of substitutes is also increasing whereby now insurances companies are offering the opportunity to put money. All these increase the barging power of customers who will have variety of options: Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 High threat of entrance due to Globalization effect Bank of Mauritius is High bargaining power due to High rivalry among encouraging new Banks Low Product Differentiation banks to set up High rate of substitute Figure 7: Porter Five Forces Analysis As shown above, all these factors are contributing to a strong rivalry among banks. Banks need to devise strategies so as to gain the lion share of the market. The war is on and with international credit crunch problem banks will simply focus on customer retention. 4.0 Research Methodology The banking sector for the past few years has been enjoying a stable environment but now it is becoming a very competitive sector to operate in. Banks need to develop strategies in order to secure competitive advantage. CRM is one of the approaches that is build around the customer and provides banks with tools and techniques to build up this relationship and strengthen the bond between the customer and the bank.However as noticed in literature, CRM in banking sector is a companywide philosophy which is focus around the customer. But are banks really doing so or they are just making wrong use of the concept whereby its applicability is far from evident. Bearing this in mind, the problem definition will be termed as Customer Relationship as an integrative approach in the banking sector. For the purpose of the study, both exploratory and descriptive research has been used for accomplishment of the aims and objectives of the study. Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 Exploratory research was used in view to explore how CRM brings competitive advantage and was used to build up the literature review. To support explanatory research, both quantitative and qualitative data were used in completing the survey. For the purpose of this study both secondary and primary data have been used. Secondary data were mainly journal articles for the purpose of the literature review. For the case of primary data, three methods namely interview, questionnaire and focus group were used in view to ensure a good synergy for the study. An interview was organised to get an overview of CRM at a macro analysis while the focus group was used for pretesting of questionnaires. To ensure reliability, the questionnaire was designed according to a process and validated as per the Crombac alpha test which was 0.7. The questionnaire was analyased through the statistical package SPSS. 5.0 Findings and Analysis The major findings of the study will be illustrated in this section. In view to get a concise and precise analysis, data has been analysed from the customer point of view and is listed as follows: 5.1 Internal CRM ( Employees Point of View) Statements Strongly Agree Neutral Disagree Strongly Agree disagree Commitment to maintain 5.8 19.2 42.3 21.2 11.5 long term relationship Employees are provided 3.85 32.69 34.62 23.08 5.77 with CRM Objectives Employees share a 3.85 7.69 46.15 32.69 9.62 Customer Centric Culture Table 2: Internal CRM As shown in the table above, 42.3% of respondents share a neutral of whether there is a commitment to maintain a long term relationship with the bank. This shows that the employees are not motivated to be part of the company and which may in turn affect the company ability to provide a better customer service to its customers. As a saying runs, our first customers are our employees, and in such a case we might say that if the right level of commitment is not derived from employees, which may affect the bank ability to provide an excellent service to its customers. On the other hand, only 3.85% of the employees agree that employees share a customer centric culture within the company which is very low. In fact, for banks to ensure effective customer service and relationship, they should Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 create this sort of customer dynamism within the bank by sharing a customer centric approach, which is far from reality here. 5.2 Perception of the bank to the general public Study shows that only 5.88% strongly agree that the bank is trustworthy as compared to 4.50% and 4.90% who strongly agree that the bank is committed to customer financial needs and provides valuable information as shown in the table below; Statements Strongly Agree Neutral Disagree Strongly Agree disagree Trustworthiness 5.88 27.45 22.55 36.27 7.84 of the bank Committed to 4.50 29.47 32.35 30.39 5.88 customer financial needs The bank 4.90 23.53 26.47 33.33 11.76 provides valuable information Table 3: Perception of CRM Yet, it should be noted that there is a high majority of customers who disagree that they trust the bank, commit themselves to the customer financial needs and provides valuable information. It can clearly be deduced that the bank image in the market is far from a customer centric bank, which customers Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 are far from using the bank as a sole banking business partner for transactions. Also, 36.27% of the respondents are dealing with bank since two years as compared to only 6.9 % since five years. For customers to maintain a long term relationship with the bank, they should be emotionally attached to the brand. But 62.75 % states that the bank is not the sole bank they deal with as compared to 37.25% of the respondent who says so. Hence majority of customers maintain relationships with other banks which deliver to the expectations of the customer. This is further supported by the cross tabulation analysis which shows that only 2.7 % of the respondents stating that the bank is the sole bank that they deal with. 5.3 Electronic CRM issues Study on evaluation of the web site in terms of 7cs shows that customers are very satisfied with content, community context, customization, connection and communication of the bank as the mean values range for 2.759, 2.941, 2.745, 3.098, 2.990 and 2,882 respectively. This shows that customers fairly like the web site of the bank. However, it should be noted that customisation is the highest mean value which was based on a rating for 5 very satisfied and 1 very dissatisfied and thus implying that customers are happier with the level of customisation strategies adopted by the bank. This is further proven by the fact that local bank has recently launched new techniques such as e- banking services as well as mobile banking services. Personalisation is the life and death for banks as it derives customer information to provide relevant individualised interactions to customer and study shows that only 27.45% of the respondents received personalised messages as compared to 72.55% as shown in the diagram below: Variables Percentage Yes 27.45 No 72.55 Furthermore, 35.29% of the respondent states that direct mailing is the mostly used communication tool to send personalised messages as compared to 10.78 % and 12.75 % for e-banking and SMS banking. However in the e-market place, e-banking and SMS banking can provide better opportunities for maintaining relationship with customers, which is far from a fact at the bank. On top of that only 4.90 % of the respondent states they get personalised messages through entire channel which implied that the bank is yet to develop a multi channel integration customer relationship management to send personalised messaged. It should be pointed that the web site is an important component in maintain Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 customer relationship, but yet only 58.42 % of the respondent are aware of the bank web site while 41.42 of the respondent states that they are unaware of the web site of the bank. However, for those who are aware of the website, they do not make use of it regularly as only to 25.49 % who visit it once a month. Thus customers are not motivated to use the web site but yet it can be used as a platform to building relationship with customers. 5.4 Service Quality Issues In today’s tradition world, the impact of service quality is very important for customers to maintain relationship. As shown in the table below, the level of satisfaction in regards to the personality traits of employees working in the front stage of the bank ranges near the mean value of 3 as shown below: Personality Traits Means Confidence 3.1373 Knowledgeable 3.1961 Helpful 3.333 Courteous 3.3039 Responsive 3.3627 Personalisation 3.2725 As shown above, low mean values of 3.1373 and 3.1961 for instilling confidence and knowledgeably can better serve customers when they are facing problems which will increase customers’ trust and commitment towards the bank. On top of that employees should ensure that customers are put first in every transaction, but the low mean value of 3.0686 implies that customers are far from been very satisfied that they are treated like king while doing their transactions. Hence employees are not trained to work as customer relationship agents who focus on building lasting relationship with customers. However 22.55 % and 6.86% of the respondent disagree and strongly disagree respectively to the fact that that the bank is yet to be oriented to deliver to the voice of customers. However, the bottom of any relationship starts with trust and commitment which is centred on effective communication and this is far from reality at the bank. Furthermore, study in regards to whether the bank is trustworthy shows that only 27.45% of the respondent agree that they trust the bank policies as compared to only who 5.88 % of the respondent who strongly agree. However, 36.27 % and 7.84 % disagree and strongly disagree respectively that they trust the bank while only 22.55% of the respondent who Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 strongly agree implying that the bank has some loops holes in creating this level of trust the customers. Thus testing the significant of the variable runs as follows: H0: Trust does not have significant for customers in building relationship with the bank. H1: Trust has a significant impact for customers in building relationship with the bank. Reject ho if less than 0.05 At null hypothesis 3 since (sig value 0.065 is greater that 0.05) Ho is not rejected which means that trust is not having a significant impact for customers to build relationship with the bank. Concerning the level of commitment, study shows that the 32.35 % are neutral as to whether customers are fully committed to the bank. Only 4.90 % and 26.47 %strongly agree and agree respectively that bank is committed to financial needs. Thus the general trend is that the bank is not committed to customer’s financial need which is supported by the rejection of the hypothesis as shown below: H0: Commitment does not has an impact in bulling my relationship with the bank H1: Commitment has an impact in bulling my relationship with the bank Since at null hypothesis 3 (the sig value 0.324 is greater than 0.05) Ho is accepted which means that commitment is still to have an impact in for customers to build relationship with the bank. 5.5 Complaint Management Complaint Management is one of the key heart beat of any CRM strategy. In view of this, study shows that only 30.39 % of the respondent sends their complaints through the hot line with as compared to 26.47 % for e-mails as shown in the diagram below: Others 0.98 Suggestion Box 16.67 Letters 15.59 Customer Service 9-60 Department Email 26.17 Hotline 30.39 As shown in the diagram above, 0.98% states others which includes personal meeting with branch manager to express its request. However, 9.80% opts for the customer service department even that Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 such department is operational to handle customer complaints. On top of that, a well defined complaint strategy will suggest specific tools to send request which may be more effective to resolve conflicts. Study shows that 41.58 % are neutral with the effectiveness to satisfy both complaints and request that they make to the bank. In such a competitive environment, bank should ensure that customer requests and complaints are dealt efficiently and effectively but only 30.69 % and 2.97% are satisfied and very satisfied with complaint handling. 5.6 Demographic Profile of Customers Study shows that 63.73 % of the respondent is female customers as compared to 36.27 % who are male customers. On top of that, 38.24% are in the age gap of 21 to 30 years old as compared to 23.53% of the respondent who aged between 31 to 40 years old. Furthermore 32.25% are mainly clerical and service workers as compared to 0.98 % who are retired. In terms of profession, 20.59% and 11.76% are self employed and students respectively while 9.80% are manual workers and 4.90% are households. But only 19.61% represent professional and executives. 6.0 Discussion and Recommendations The general discussion can be said that the bank is yet to develop an integrative approach which focuses on the customer needs and to deliver to it. As shown by the study, the bank is far from developing a customer centric approach both for the customer as well as for the employees. Thus for customer relationship management to deliver to its expectations, it should play an integrative role within the bank and ensure that all processes are integrated in the bank global strategy, which is far from reality in the study above. The general trend is that all banks say that they are managing customers and delivering to their expectations and in reality, very few banks which have a well defined CRM approach planned and set as per expectations. The sole customer in the CRM is not considered in the strategy implementation. In view of this, to implement a CRM integration strategy, the following recommendations can be adopted: 6.1 Implement a Customer Centric Process in Banks Banks should change form product leadership to a customer-centric method and manage the customer data in every unit in the enterprise (Molineux, 2002). Thus a customer centric approach can be adopted as shown below: Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 CEO Customer centric Customer Centric process culture Marketing Audit HR Sales Department Department department department As shown above, the actual customer centric process is not bringing down commitment from employees. Hence banks can set up a customer centric process which provides a customer centric culture throughout all departments. Such an orientation ensures that all departments focus in delivering value for customers who will lead to customer retention and loyalty. To support this process, a social marketing program can be done with employees so that customers change their behaviour and accept that customers are king in every aspect of the bank. 6.2 Employee Relationship Management first before Customer Relationship Management “Knowing our customers will speed up our journey” such is the core objective of the bank, but yet study shows that only 21.15% of employees say yes they know about the bank’s objective. In other words actual objectives are ineffective in framing up employees to deliver value to customers. However as employees are the most important assets in an organisation, it’s important to ensure effective management of employees by making them feel as “internal customers” so that they and can treat customers as king. As such a strategic plan will be set up for effective management of customers: But study shows that front line employees are mainly HSC holders, hence training should be provided to enrich employees’ knowledge in terms of customer service. Continuous training can be given by Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 creating a forum for employees and provide online training with regards to latest trends in customer service. 6.3 Increase customer experience through the web site Website can be transformed as a social interaction network which can increase customer experience. New services such as interactive chat and blogs will provide platform whereby customers can discuss problems they have encountered at the bank. On top of that, banks can have topic of discussions through blogs and customer’s point of views can be asked. In other words, constant market research will be carried which will enable banks to build up powerful knowledge. 6.3 Develop channel integration for effective Customer Relationship Management The actual study shows that only 3.82 % and 3.92 % prefer to use new services such as SMS banking and E-banking respectively for their preference service encounter. Such a low figure implies that a laissez-faire approach to delivery channels is adopted by the bank which does not use the synergy among the tools. As such banks can implement multi channel integration as shown in the diagram below: Customer database Multi Integration Strategy Figure: Multi Channel Integration ATM SMS banking E-banking Branch Add value to customer As shown in the diagram above, all service delivery tools will be integrated through a multi integration strategy which will add value to customers. Finally a multi integration channel will ensure that all channels are adding value to customers. Adopting such a systematic approach can ensure a proper management of customer’s expectations rather than treating them as whole market. Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 People Marketing Branch Department Customer Customer Process CRM E-banking Experience Integrative Value Technology IT Department SMS banking ATM As shown in the diagram above, CRM will play an integrative role in the bank and will focus on creating customer experience. 7.0 Conclusion CRM is the hot talk in the banking sector. Banks are realising that CRM is the magic bullet that helps financial institutions to build stronger and more profitable relationships. As such CRM can enable banks to enjoy competitive advantage by delivering high value to the right customer. But on the other side of the coin, lies a bitter truth is that for CRM to bring competitive advantage, it should be a whole company orientation focusing on delivering value to customers. If the orientation within the bank is not completely defined towards creating customer value, it will not set the pace to bring competitive advantage as CRM builds on a customer oriented approach to be effective. Thus based on these few facts, it can be concluded that whole notion of CRM in enhancing competitiveness at the bank is like as an old wine new bottle concept as no concrete use of the concept as a strategy which is well planned and delivered to the needs of the customer. In fact gaining competitive advantage is not just being different from other bank but the whole bank should be oriented towards delivering to needs of different customers in a systematic way. In this competitive environment, CRM in its approach is the tool kit which gives a company orientation towards delivering to customers. However the wrong use of the concept at the bank shows that CRM is not yet defined as a panoptic view which ensures customer value at each and every transaction. But customers are the world of banks and they generate the income and without them there is no business. Hence rather than focusing on developing product strategies, banks can deliver to customers by having a concise and precise ways of doing things through effective CRM. 7.1 Future Directions Future direction could be to analyse the implementation of the whole concept CRM in the banking sector. But as customer’s remains important visitor in business, academics will come up with new Le Meridien Hotel, Mauritius, 24-27 August 2010 International Research Symposium in Service Management ISSN 1694-0938 ways of delivering to the customer and hence it’s vital to analyse the disparity between the world of academics and business differs. 7.2 Limitations Only one sample bank has been considered due to limitation of time with time constraint. Other banks could be considered in the survey. Le Meridien Hotel, Mauritius, 24-27 August 2010