Customer Relationship Management and Risks in Banking Sectors

This article discusses the importance of customer relationship management in the banking sector and the risks and security measures associated with it.

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5. Customer Relationship Management
Customer Relationship Management is a technology which is generally used to
manage the interaction with customers. The customer relationship management (CRM) helps
an organization to build stable customer relationship and out traces the path to move the work
process fluently so that the organization can increase profitability by increasing the sales also
helps to improve customer services (Soltani and Navimipour 2016). CRM based system helps
to track the enquiries across the channel without losing any track regarding the customer
service.
CRM plays an important role and matters in business because it helps to initiate business
ideas for future strategies. The implementation of Customer Relationship Management in the
banking sector will give a clear overview about the customers. Everything can be observed in
a single place; a simpler and customizable dashboard can monitor the previous history with
the customer, status of the customer’s account, outstanding service issues regarding the
customer service and many more. The business banks lend more loans to customers than that
of normal lenders. The stakes become high, in order to go ahead in the competition to earn
big business accounts, it is complimentary to launch CRM. The Customer Relationship
Management is no longer an optional criterion in banking sectors. The benefits of CRM in
banking produce a great deal of profit (Bhat and Darzi 2016). The benefits are:
 Boost sales
 Increase in lead conversion
 Increase productivity up to 44%
 Sales up by 37%
 More efficient communication
 Automatic software update

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 Data tracking among inter department
 Better service
 Evaluate customer experience
 Increase customer service
6. Risks/Security/Privacy in banking sectors
The growth of technology with the emerging social media are changing the way of
interaction, the bank must structure some security strategies to overcome the security
threats (Omotayo and Adebayo 2015). Some of the banking risks are classified below:
i) Strategic Risk: The business risks are the major risk in banking sectors. These risks
arises when the banks fails to adopt the emerging technology as quickly as their competitors.
ii) Compliance Risk: This risks arises when the banks fails to take up and implement
required internal controls training and testing programs.
iii) Credit Risk: The credit risk is one of the most familiar risk in banking sector;
whether it is a global or national bank; both suffers from inaccurate lending from the debtor.
It occurs generally because of inadequate income of borrowers or business failure of the
borrowers.
iv) Cyber Threats: Cyber threats hamper the electronic information of the customers
and the banking details. These threats occur due to lack of user privilege segregation and poor
password policies.
The security options which can be enabling by the bank to overcome the risks are:
i) Enabling Firewall protection
ii) Secured and protected internet access

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iii) Security software and antivirus should be used to safeguard the attacks
iv) Monitoring the access
The privacy policies the bank should provide to its customers are the database
management system can only be accessed by the DBA only. The employees should only be
given the partial and required access regarding the transaction (Chiu, Chiu and
Mansumitrchai 2016). The customer’s details should be kept confidential and should not be
leaked out.

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References
Bhat, S.A. and Darzi, M.A., 2016. Customer relationship management: An approach to
competitive advantage in the banking sector by exploring the mediational role of
loyalty. International Journal of Bank Marketing, 34(3), pp.388-410.
Chiu, C.L., Chiu, J.L. and Mansumitrchai, S., 2016. Privacy, security, infrastructure and cost
issues in internet banking in the Philippines: initial trust formation. International Journal of
Financial Services Management, 8(3), pp.240-271.
Omotayo, F.O. and Adebayo, A.K., 2015. Factors influencing intention to adopt internet
banking by postgraduate students of the University of Ibadan, Nigeria. The Journal of
Internet Banking and Commerce, 20(3).
Soltani, Z. and Navimipour, N.J., 2016. Customer relationship management mechanisms: A
systematic review of the state of the art literature and recommendations for future
research. Computers in Human Behavior, 61, pp.667-688.