Retain banking

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<ul><li> 1. Retain Banking Acknowledgement Entrance, hard work gradual progress and an exciting year that is how I reached this level and now as I stand at the threshold of the aside world. I take a look of the part year which I have spend in this college my performance with the devotion of profession. So, first of all I like to thank our college SHRI CHINAI COLLEGE OF COMMERCE &amp; ECONOMICS and principal of this college Mrs. MALINI JOHRI for this continuous faith, and MUMBAI UNIVERSITY who gave this opportunity to do this project in this curriculum. I would also like to thank our co-coordinator and project guide Prof. NISHIKANT JHA for being very supportive and helped me to complete this project. I would like to thank Mr. ALOK KUMAR who is PROBATIONARY OFFICER of ORITENTAL BANK OF COMMERCE instead of their busy schedule they had answer to my questions and also I like to thank our Liberian for providing with the book which I needed. So, this goes to all those who have knowingly or unknowingly been a great support for me to accomplish the price of work. - 1 - </li></ul><p> 2. Retain Banking DECLARATION I, Mr.Jamshed Readymoney student of T.Y.B.COM (Banking &amp; Insurance) Semester Vth Shri Chinai College Of Commerce &amp; Economics. Hereby, declare that I have completed this project on RETAIN BANKING in the academic year 2007-08. The information submitted is true &amp; original to the best of my knowledge. Signature of Student (Jamshed Readymoney) CERTIFICATE I, Prof Nishikant Jha hereby certify that Mr.Jamshed Readymoneyof T.Y.B.COM (Banking &amp; Insurance) Semester Vth, Shri Chinai College of Commerce &amp; Economics, has completed project on RETAIN BANKING in the Academic year of 2007-2008. The information submitted is true &amp; original to the best of my knowledge. Signature (Project Guide) - 2 - 3. Retain Banking SUMMARY The most important aspect of retain banking is customer service without which the working of it would become very difficult. Every customer should achieve perfect service from the bank in order to build a good relation with the customer. To allow any kind of profit to the bank there should be a healthy atmosphere and a good relation with the customer as a result the bank would be able to retain the customer and also help in achieving different type of wealth management services which would help the bank to grow and fight competition. Once the customer is pleased with good customer service it would help in creating a good rapport between the customer and the bank as a result it would retain the customer for life time. - 3 - 4. Retain Banking DATE: 10/09/07 TO, WHOM SO EVER IT MAY CONCERN SUBJECT :SURVEY CONDUCTED RELATING TO THE PROJECT RESPECTED SIR, This is to inform you that Mr Jamshed Readymoney of Shri Chinai College of Commerce and Economics (TYBBI) Roll no 37 has successfully completed his survey on RETAIN BANKING under our guidance and I have seen the sincere efforts put by him in making the project. I have even tried to solve all his queries and doubts that he asked me with regards to the project. I appreciate his efforts that he has put in for this project. Thanking You, Yours Sincerely, (ALOK KUMAR) - 4 - 5. Retain Banking INDEX Introduction to banking 1-3 Services offered by banking 1-3 Retain banking 4-13 Introduction to retain banking Advantages of retain banking Objective of retain banking Introduction to relationship banking Types of relationships Retention of credit card customers Attraction for customers 13-15 Introduction ATM management Electronic bill payment Competitions faced by the banks 15-17 Besides increased competition or lowering of cost At low cost, customer satisfaction - 5 - 6. Retain Banking Tipping point Pressing issues Customer retention 18-27 Introduction Measures to be taken, in order to retain the customer Tools Cost pressure Cost reduction Differentiation Customer centric model Online banking 28-30 Introduction Web banking bonanza Scenario of retain banking 30-33 Present Future CRM in next generation Acknowledging the value of gold customers 33-36 - 6 - 7. Retain Banking Treatment for gold customers Cost Retention practices 36-38 Integrated Marketing Communication (IMC) Growth &amp; retention through personal sales o Conclusion 39 Introduction to banking 1. The business of a bank. 2. The occupation of a banker. 3. Primarily the business of dealing in money and instruments of credit. Banks were traditionally differentiated from other financial institutions by their principal functions of accepting depositssubject to withdrawal or transfer by checkand of making loans. Services offered by banking Demand deposit accounts (DDA) Most individuals and virtually all business maintain some form of demand account,usually in the form of a checking account.The funds in a demand accountcan be withdrawn by the customer upon demand in the form of cash , a cheque or electronically. - 7 - 8. Retain Banking Time Deposits (TDS) The funds of time accounts are placed on deposit with a bank for a definite or indefinite period of time. In return, the bank pays the depositor interest on those funds. The most common types of TDs are savings accounts and Certificates of Deposit (CDs). Safe deposit boxes Banks rent these boxes inside their vaults for the storage of their customers valuable documents and assets. Insurance and investment services Many banks now offer a wide range of these products in an effort to expose customers to their need for, as well as the ease and convenience of purchasing, such services. Credit The extension of credit is one of the most well-known services provided by banks e.g vehicle loan , house loan. Merchant credit services Every business that accepts Visa, MasterCard, American Express, or Discover credit cards must have a merchant account through which to process those charges. Banks provide these accounts as well as account management tools and support. - 8 - 9. Retain Banking When requesting a loan, you as a borrower should keep in mind the banks desire for your use of these other offered services. If you can demonstrate to the lender that their extension of credit to you will also provide to them a loyal and more deeply rooted customer, the lender might be persuaded to is more compromising in some ways to approve your loan request or grant more favorable terms. A combination of a few of these accounts could mean thousands of dollars in fee income to the bank and provide a new source of inexpensive deposits for them. - 9 - 10. Retain Banking Of course, new relationship accounts wont make a bad loan proposal good (whether personal or business), but in can enhance a questionable or borderline application and provide the lender with incentive to give you a chance. If youre a very strong borrower and dont need any type of assistance, additional relationship accounts can help to improve the interest rate or other loan terms that the bank may offer. - 10 - 11. Retain Banking Retain banking Meaning Of Retain 1. To maintain possession of. 2. To keep or hold in a particular place, condition, or position. 3. To keep in mind; remember. 4. To hire (an attorney, for example) by the payment of a fee. 5. To keep in one's service or pay. Introduction Retain banking is also known as relationship banking. It is building a strong relationship with your customer base so as to ensure their continued support and business brought about by the customers. It involves not only retaining and maintaining a strong relationship with the existing customers but also ensuring the flow of new and potentially long lasting customers. Importance and advantage of retain banking In todays fast paced and cruel business world, businesses are competing with each other to stay afloat. The only way to ensure the continued succession of the business is to develop a good relationship with the customer base so as to ensure their faithful and trustworthy business ventures. Businesses are stepping on each other to get ahead and obtain customers from any source available even if it means the complete annihilation of another business organization - 11 - 12. Retain Banking This retain banking or relationship banking can be obtained by implementing a good and renowned retain banking program which enables the banking industry or the banking organization which implements it to ensure succession through the customer base. A vast customer base projects a positive outlook on the banking organization. Objective of retain banking The basic and most fundamental objective of retain banking is to retain its customer base by whatever means may be possible. By achieving a trustworthy and sure customer base the bank can ensure its succession and even its survival in the banking industry. As we all know the main and fundamental resource of a bank is the general public through which it generates income through deposits and loans. If a bank does not have this basic resource of deposits it is unlikely to succeed in the long run. 1. Find out who your profitable customers are Many business customers are unprofitable. Why would you want to spend money trying to retain them? Before you try to build loyalty, determine the profitability of each customer, and divide them into five groups, from the most profitable (Gold) to the least profitable (the losers). To determine profitability you will have to get some software written that includes sales, margins, recency and frequency. The software should calculate every customers profitability on a monthly basis. - 12 - 13. Retain Banking 2. Spend service Rupees on the gold customers. Banks top 20% customers typically represent 80% of Banks profits. Dont deluge them with marketing. Instead, figure out ways to give them super service things that banks could not afford to do for all other customers. Airlines let their gold customers fly first class. Banks pick up their phone calls on the first ring. Rupees should be spent on customers in the second, third and fourth quintiles. Dont waste marketing rupees on the losers at the bottom. 3. Create advisory councils. Suppose that most of your business customers consist of environmental companies, transportation companies and construction companies. Set up three advisory panels, one for each group. Find out who the key influencers or decision makers are in each of the most profitable companies in each group, and invite them to become members of your advisory panel. Get their advice by email. Create stationery with their names and companies listed prominently. You can use this for acquisition, and you will have these advisory panel members as customers for life. 4. Get Caller ID for your customer service. Whenever a regular business customer calls you up, your customer service reps should be able to see their entire purchase history on the screen before they answer the call. This can be done by storing your customers phone numbers in the database, and tying the DB to your phone service caller ID, so that the appropriate record is on the screen. Your reps will know when they are talking to a Gold customer. They will know the problems that occurred in the past, and how they were resolved. You will - 13 - 14. Retain Banking make each customer feel that they are really well known and appreciated by your company even though the customer service rep has never spoken to them before. This one, inexpensive, innovation could do more for retention than a thousand "we appreciate you" letters. 5. Have contests for the best use of your product. IMarket Inc. of Waltham, MA has an annual Bulls Eye contest for customers who use their business name lists and SIC coding system. All customers are encouraged to enter, and many of them do. The winners receive free trips and recognition. IMarket uses the entries to advertise their services. The results are announced at a major trade show. It is a win-win situation for all. 6. Debrief your defecting customers. Why do your business customers stop trading with you? In most cases, marketers havent a clue. Frederick Reichheld in The Loyalty Effect outlines the use of a customer defection study. Such a study needs to be conducted by phone, and in depth to determine the root causes of the departure, business practices that need fixing, and sometimes to win the customer back. In one such study at MicroScan, they discovered that customers were concerned about the reliability of MicroScans instruments. MicroScan took corrective action. They shifted R&amp;D priorities, redesigned their customer service protocols, and developed a new low-end model for small labs. The result: they began to retain more customers, and became market leaders. There is real gold in such studies, providing that your company is prepared to take the results seriously, and act to correct the problems uncovered. - 14 - 15. Retain Banking 7. Learn your repurchase rate. What is the real test of customer loyalty? It is the repurchase rate. How many of your existing customers will buy from you the next time that they buy in your category? Customer satisfaction surveys are, in many cases, worthless. American automobile manufacturers typically have satisfaction survey results of close to 90%, but repurchase rates of 30% to 40%. Many companies have not calculated their repurchase rates. If you are interested in customer loyalty, find a way to determine your current repurchase rate, and compare it with other rates in the industry. It may be a sobering experience. Once you know what it is, find a way to improve it. This is the way to build true, measurable, customer loyalty. - 15 - 16. Retain Banking Relationship Banking Relationship banking means banks maintain constant consultations with their clients through various seminars , customers meets etc to evaluate, improve and widen the range of service to customer .However all customers are requested to keep banks imformed of their experiences about the various services renedered by banks and feel free to comment. Relationship Banking is not about having a "buddy-buddy" relationship with your customers. Customers do not want that. Relationship Banking uses the event-driven tactics of customer retention banking, but treats banking as a process over time rather than single unconnected events. By molding the banking message and tactics to the LifeCycle of the customer, the Relationship Banking approach achieves very high customer satisfaction and is highly profitable. The relationship banking process is usually defined as a series of stages, and there are many different names given to these stages, depending on the marketing perspective and the type of business. For example, working from the relationship beginning to the end: Customer loyalty describes the tendency of a customer to choose one business or product over another for a particular need. In the packaged goods industry, customers may be described as being "brand loyal" because they tend to choose a certain brand of...</p>