Customer relations management boosting ATM maximization

With branch automation pushing transactions out of banks to more cost-effective channels, and the increasing focus on retail products sales, more banks will butt heads as they fight for customers in saturated markets.

A way around this is to use customer relationship management (CRM) to sell to existing customers, a move that will ultimately lead full circle back to what is now becoming the customers’ main point of contact – the ATM or automated teller machines.

HDFC Bank in India has had CRM at its branches and phone banking services for several years. It has also recently piloted CRM at its ATMs in Bombay.

"If our pilot project on using ATMs to communicate with customers and generate leads works, that’ll be a significant step. Fifty percent of the eligible base transacts at our ATMs monthly, possibly making this the channel with the highest customer footfalls," Rahul Bhagat, head of direct banking channels said.

The bank’s challenge has been to wait for the time that its customers would accept ATMs. Currently, 53 percent of customer transactions occur at the machines, up from 40 percent in 2001. As HDFC migrates customer traffic to the self-service channels, it hopes to use CRM to ensure sales opportunities follow them to the ATMs.

"If you look at our retail loan products today," says Paresh Sukthankar, country head of credit and market risk, "for products like car loans and personal loans, 15 to 30 percent of our monthly sales come from our existing customer base. In the credit card business, more than 50 percent of our sales of new cards are to our existing customer base. When we’re talking about increased sales to our existing customers, a lot of that can be attributed to leveraging the CRM solution."

The same model will provide a boost to banks in Thailand, which had relied heavily on external sales forces to bring in sales two years ago, but are now contemplating beefing up their CRM capabilities in order to sell better to their existing customers.

According to David Hendrix, head of retail at Kasikornbank, his bank’s reliance on outside sales has dropped from 80 percent two years ago to 40 percent today, although in absolute terms more outside commission-based sales agents are employed by the bank.

"We are going to put (a CRM solution) in," says Hendrix, "but we’re looking at changing our branch automation system and we would have a CRM link in with activity across the ATM." According to Hendrix, he hopes to have the system in place within two years.

According to a bank in the Philippines, which has rolled out CRM technology in 50 of its branches to support the cross selling of its products, its CRM system has proven effective. Sales goals in branches that had CRM exceeded branches that didn’t implement the technology in many key areas such as credit card penetration, mortgage loan sales, and bancassurance products sales, among others.

Attention must still be paid to the challenges to implementing CRM properly. Susan Hwee, executive vice president for information technology at United Overseas Bank in Singapore says, "If the CRM systems that you have are yesterday’s information, and if the sales person has to key into different information systems several times, the thing won’t work. So we have to integrate it on a straight through basis, and that is one of the key things that we put in place in the CRM program."

She added: "The focus is really what we can get out of it from a business point of view, that I think is fundamental to a successful CRM program that is embraced by the business. When we looked at it, even on hindsight right now, if it is strictly from an IT perspective, this project would have failed, and it would have been a very expensive failure." – The Asian Banker