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Unit 13: Emerging Trends in CRM

sector reforms and policies in the country. The main objective of financial sector reforms is to Notes
promote an efficient, competitive and diversified financial system in the country. Indian banking
industry has undergone tremendous transformation after liberalization and globalisation process
initiated from 1991. These changes have forced the Indian banking industry to adjust the product
mix to effect the rapid changes in their process to remain competitive in the globalised
environment.

Competition from Foreign Banks and New Private Sector Banks

The entry of more and more foreign banks and new private sector banks, with lean and nimble
footed structure, better technology, market orientation and cost effective measures, have
intensified the competition in the Indian banking industry. Financial Institutions have also
started entering into the domain of banks. In recent years, the share of business of public sector
banks has declined considerably. So there is a compelling need for the Indian banking industry
to modify its marketing strategy to attract the customers and to withstand the stiff competition
from foreign banks and new private sector banks.

Technological Advancement

The advent of technology both in terms of computers and communications has drastically
altered the methodology of banking business. In the banking sector, the technology has opened
new vistas and in turn has brought new possibilities for doing the same work differently and in
a most cost-effective manner. Technology helps to have 24 hours a day banking, all seven days
in a week. Telebanking, Internet banking and E-banking have opened new business potentials
and opportunities which hither to remained unexplored. All these technological advancement
may pave the way for home banking rather than branch banking.

Innovation

Another important force of change in the Indian banking sector is innovation. Banks are
innovative, pro-active now-a-days and offer top class service to customers. They play a dynamic
role not only as a provider of finance but also as a departmental store of finance. As a result of
this, new products like merchant banking, mutual funds, leasing, factoring, forfeiting, corporate
advisory services and venture capital are emerging. These innovative services may augment
revenue with cost effective measures.

Development of the Skills of Bank Personnel

To meet the new challenges, banks have to devise novel ways of meeting the customer’s demands.
To help the banking staff to get sufficient exposure to technology, suitable packages relating to
hardware and software applications in relation to their works are to be provided. Further, a
separate marketing wing may be created in every bank to market their banking services. They
must be trained suitably to keep pace with the changing environment. In order to meet the
challenges, the Human Resource Department in banks have to prepare appropriate manpower
plans and strategies.

Task Explain the function of CRM in any firm.

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