Importance of CRM in financial sector during Recession

Recession has brought many companies today on a cutback state. In such a phase, there is always a danger of companies being wedged at creating a climate of ‘formulating failure’ with their cutbacks. A more levelheaded approach to accomplish the same results would be to focus on maximizing outputs from the same level of inputs i.e., efficient utilization of resources. Customer Relationship Management proves an ideal tool for a paradigm shift in focus on maximizing productivity.

Implementation of CRM with productivity as its standpoint can help development of the projects in both their initial stages of adoption as well as launch of optimization schemes for the existing CRM network. Recession is probably an ideal time for implementation of new CRM strategies. The later stages of the CRM strategy can mitigate the after-effects of a recession. in such cases, periods like recession can be viewed as an occasion to use CRM strategies more constructively.

Financial services form an integral part of service sector. It is a significant part of the Asian economy as a whole, apart form banking sector. Banking provides the mechanism for modern commerce and trade. No businesses or social activities like the liberty to withdraw money beyond our limits, not bothering to carry too much cash for business transactions can take place in the absence of banking. Along with the rapid advancement of services and technologies in banking, there is an upward trend in competition and complex markets where modifications are also progressing steadily. Hence there is an increasing pressure from economic development of the continent on one hand and alterations in business atmosphere on the other. They have brought banks in a situation where they are forced to redesign their formulations in accordance with the conditions.

The latest development in CRM of Financial Institutions is to provide door-to-door services. Development or maintaining stability in any business centers on customers now. Every engagement with client is seen as either an opportunity to build brand loyalty or destruction of a customer’s trust in the bank. With intensity of competition and reformation of concepts in the banking system as a whole, the expectations of customers are on a rise than ever before. Banks are compelled to carve new strategies not only to gain customers but also to retain them by offering them a competitive edge over their rivals. Banks, like most other businesses are constantly executing newer and more innovative sales practices using advanced technologies (Data Mining and Artificial Intelligence) to gain the bigger share of the pie.