Insight Report: Best Practice – Ensuring Optimal Customer Service and Relationship Management

Customer satisfaction has always been a priority for banks and payment companies. With the advancement of technology, rising competition and changing consumer preferences, it has become even more important to have effective customer service and relationship management (CRM) to retain existing customers as well as acquire new ones. Companies have adopted a number of best practices, including strengthening existing CRM platforms and installing new ones, managing contact center operations effectively, offering customized products and pricing at an individual level, and using online and social networking platforms to address customers’ complaints.

Banks and payment companies have adopted CRM applications to improve customer services and provide suitable products, indicating a positive outlook for successfully understanding customers. Companies in the Americas and Europe were early adopters of CRM applications, and are using them as a platform to develop new products. The Asia-Pacific region is at an intermediate level in terms of use of CRM solutions, while it is still a relatively new concept in the Middle-East and Africa. Overall global spending on CRM applications by retail banks reached US$1.9 billion in 2012, accounting for 14.0% of the overall global spending on CRM. Spending is expected to accelerate further over the forecast period (2013–2017), increasing from US$2.1 billion in 2013 to US$3.0 billion in 2017 at a CAGR of 10.10%.

Scope

• This report provides insights into best practices adopted by banks and payment companies to ensure optimal customer service in the cards and payments industry.

• It discusses key elements that are vital in helping banks and payment companies build strong relationships with customers, including the integration of CRM applications into IT systems, effective contact center management, multi-channel consumers banking and segmenting customers and offering customized products and pricing.

• It discusses key regulatory developments in the retail banking and payments industry, and also outlines the regulatory challenges faced by the companies in utilizing online and social media as mainstream consumer-engagement channels.

• The report uses case studies to illustrate how the adoption of best practices enabled companies to strengthen their relationships with customers.

Key Highlights

• To offer a consistent banking experience and customer services, banks and payment companies must ensure that they establish adequate customer service channels in both banked and unbanked areas to interact with customers and provide them assistance in conducting banking transactions.

• To improve the banking experience and provide customers with appropriate products, banks and other payment companies are integrating CRM applications into their IT systems. An effective CRM system enables organizations to understand customer requirements, and manage and address issues and queries efficiently.

• Social CRM is an initiative adopted by various organizations and financial institutions to help understand customers and provide appropriate solutions. Banks and payment companies set up accounts and profiles on social platforms such as Twitter, Facebook and LinkedIn to address customers’ issues, complaints and feedback.

• Banks and payment companies have developed mobile phone applications that allow customers to access their accounts and make online transactions, giving rise to the concept of ‘omni-channel’ banking, where banks can provide customers with a single view of their finances using a mobile device.

Reasons to buy

• Gain insights into strategies adopted and actions taken by banks and card issuers in various parts of the world to build long-term relationships with customers.

• Gain an understanding of key factors that drive banks and payment companies across the world to adopt CRM practices.

• Gain an understanding on emerging operational, technological and regulatory trends and developments with regard to customer service and relationship management in the global cards and payments industry.

• Gain insights into best practices adopted by banks and payment companies while implementing customer service and relationship management, with case examples.

Companies mentioned

American Express

Bank of America

Wells Fargo

Citibank

Barclays

Halifax

HDFC Bank

ICICI Bank

Russian Standard Bank

Starbucks

Westpac

FirstOntario Credit Union

DNB Bankas

PayPal

U.S. Bank

BBVA

CIMB Bank

Axis Bank

Turkish Economy Bank

HSBC

Table of Contents

1 Executive Summary

2 Customer Service and Relationship Management by Banks and Payment Companies

2.1 Background

2.1.1 Key drivers

2.1.2 Emerging trends

2.1.3 Regulatory developments

3 Best Practices in Customer Service and Relationship Management

3.1 Customer Relationship Management Applications

3.1.1 Regional analysis – adoption of CRM applications in retail banking

3.1.2 Europe

3.1.3 Americas

3.1.4 Asia-Pacific

3.1.5 The Middle East and Africa

3.2 Contact Center Management

3.3 Multi-Channel Banking Channels Proving Consumer Convenience

3.3.1 Self-service branch banking models

3.3.2 Online, social media and other digital channels

3.4 Customer Segmentation and Personalized Offerings

3.4.1 Customer segmentation based on demographics and income level

3.4.2 Customer segmentation based on relationships

4 Implementation Strategies and Case Examples

4.1 Strategic Roadmap for Customer Service and Relationship Management

4.1.1 Relationship-based services and pricing

4.1.2 Reward programs will improve customer relationship

4.1.3 Expansion of distribution network to offer services at customers’ door step

4.1.4 Use of digital channels as a cost-effective means of reaching customers

4.1.5 Utilizing technology to improve customer experience

4.2 Case Studies

4.2.1 Barclays introduced an online platform allowing customers to share ideas

4.2.2 Chirpify – reinventing payments through social media

4.2.3 Citibank’s launch of time-based relationship pricing with the Citi Prestige Card in Hong Kong

4.2.4 HDFC Bank adopted a CRM application to streamline customer services

4.2.5 Starbucks improved customer convenience by allowing mobile payments

4.2.6 Royal Bank of Canada introduced self-service kiosks with video-enabled assisted services

4.2.7 La Caixa’s introduction of the world’s first contactless ATMs in Spain

4.2.8 Alpha Bank’s instant rewards through POS terminals

4.2.9 Russian Standard Bank (RSB) benefited from an analytics platform

4.2.10 Westpac offering quality service via its speech recognition solution

5 Appendix

5.1 Methodology

5.2 Contact GlobalData

5.3 About GlobalData

5.4 GlobalData’s Services

5.5 Disclaimer

List of Tables

Table 1: Commercial Bank Branches (per 100,000 Adults), 2008–2012

Table 2: Global Spending on CRM Applications (US$ Billion), 2012–2017

Table 3: Spending on CRM Applications in Retail Baking in Europe (US$ Million), 2012–2017

Table 4: Spending on CRM Applications in Retail Baking in the Americas (US$ Million), 2012–2017

Table 5: Spending on CRM Applications in Retail Baking in Asia-Pacific (US$ Million), 2012–2017

Table 6: Spending on CRM Applications in Retail Baking in the Middle East and Africa (US$ Million), 2012–2017

Table 7: Internet and Mobile Penetration Across Developed and Emerging Economies, 2011

List of Figures

Figure 1: Global Spending on CRM Applications in the Retail Banking Industry, 2012

Figure 2: Shift From Product-Centric to Customer-Centric Approach

Figure 3: Global Spending on CRM Applications (US$ Billion), 2012–2017

Figure 4: Regional Spending on CRM Applications in Retail Banking (%), 2012 and 2017

Figure 5: Spending on CRM Applications in Retail Baking in Europe (US$ Million), 2012–2017

Figure 6: Spending on CRM Applications in Retail Baking in the Americas (US$ Million), 2012–2017

Figure 7: Spending on CRM Applications in Retail Baking in Asia-Pacific (US$ Million), 2012–2017

Figure 8: Spending on CRM Applications in Retail Baking in the Middle East and Africa (US$ Million), 2012–2017

Figure 9: Development of Self-Service Channels in Retail Banking Industry

Figure 10: Self-Service Branch Banking Models

Figure 11: Broadband Internet Users on Mobile Devices (Million), 2009–2013

Figure 12: Growth of HNWIs in Key Countries, 2008–2012

Figure 13: Young Populations (Aged 15–24) in Key Countries, 2010–2020

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