Role of Customer Relationship Management and E-banking in U.K's Banking Industry

By

ACKNOWLEDGEMENT

I would like to thank my supervisor for supporting me throughout my project and giving his valuable suggestions. Finally thanks to all my friends and family for their utmost support and inspiration.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this dissertation has not been submitted for any examination at academic as well as professional level previously. It also represents my own views & not essentially the ones associated with university.

Signed __________________ Date _________________

Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

CHAPTER 1: INTRODUCTION1

1.1 TOPIC1

1.2 INTRODUCTION1

1.2.1 BACKGROUND OF THE RESEARCH1

1.2.2 OVERVIEW2

1.2.3 CRM STRATEGIES USED IN BANKS BASED IN U.K3

1.2.4 CURRENT SCENARIO OF CRM PRACTICES IN U.K4

1.2.5 ROLE OF MANAGEMENT IN CRM ENDEAVOURS4

1.2.6 BENEFITS OF CRM ACTIVITIES5

1.2.7 CRITICISM OF CRM ACTIVITIES6

1.3 ROLE OF E-BANKING IN U.K'S BANKS7

1.3.1 DECREASING COSTS7

1.3.2 REDUCING ERRORS8

1.3.3 ELIMINATING FRAUDULENT ACTIVITIES8

1.4 PROBLEM STATEMENT8

1.5 RATIONALE OF THE STUDY9

1.6 AIMS AND OBJECTIVES9

1.7 SIGNIFICANCE9

1.8 E-BANKING FEATURES & CUSTOMER RELATIONSHIP MANAGEMENT10

CHAPTER 2- LITERATURE REVIEW12

2.1 ORGANIZATIONAL STUDIES12

2.2 BANKS & CRM13

2.2.1 EMPLOYEE TRAINING & LEARNING15

2.2.2 ORGANIZATIONAL PHENOMENON & CUSTOMER'S PSYCHE15

2.2.3 CONTINGENCY THEORY17

2.4 RATIONAL SYSTEMS THEORY IN BANKING17

2.5 STUDIES ON PROVIDING HIGH QUALITY SERVICE18

2.5.1 RELATIONSHIP MARKETING19

2.5.2 SERVICES MARKETING IN THE BANKING INDUSTRY20

2.6 QUALITY SERVICE DELIVERY IN U.K'S BANKS24

2.7 CUSTOMER RELATIONSHIP STRATEGY26

2.7.1 LEVELS OF STRATEGY DEVELOPMENT IN BANKS27

2.7.2 COMPETITIVE ADVANTAGE28

2.8 CUSTOMER RELATIONSHIP MANAGEMENT29

2.8.1 STRATEGIC CUSTOMER RELATIONSHIP MANAGEMENT30

2.8.2 CRM AS A BUSINESS STRATEGY31

2.8.3 ORGANIZATIONAL CULTURE IN BANKS IN THE U.K31

2.8.4 CUSTOMER CENTRICITY33

2.8.5 CUSTOMER CENTRICITY AND CRM34

CHAPTER 3: METHODOLOGY36

3.1 INTRODUCTION36

3.2 RESEARCH PURPOSE36

3.3 RESEARCH APPROACH37

3.4 RESEARCH STRATEGY39

3.5 DATA COLLECTION40

3.6 FORMAT OF THE STUDY42

3.7 SCIENTIFIC CREDIBILITY OF THE DATA43

3.8 LIMITATIONS OF THE RESEARCH DESIGN44

3.9 KEYWORDS45

3.10 ETHICAL CONCERNS45

CHAPTER IV: RESULTS& DISCUSSION47

4.1 INTRODUCTION47

4.2 STATISTICS AND FACTS ON CRM AND E-BANKING PROSPECTS IN THE UK BANKING INDUSTRY49

4.2.1 SHARE OF GDP51

4.3 QUESTIONNAIRES -CUSTOMER RESPONDENTS51

4.4 INTERVIEW RESPONSE OF CUSTOMERS53

4.5 QUESTIONNAIRE- BANK EMPLOYEE PARTICIPANTS53

4.6 INTERVIEW RESPONSE OF BANK EMPLOYEES55

4.7 ROLE OF E-BANKING IN ENHANCING CUSTOMER LOYALTY55

4.7.1 ASSESSMENT OF E-BANKING AND CRM ROLE IN THE BANKING INDUSTRY56

4.8.1 IMPACT OF E-BANKING & CRM ACTIVITIES57

4.8.2 RELEVANT RESEARCH ON THE TOPIC59

4.9ANALYSIS OF THE RESULTS60

4.9.1 EXPANDING CUSTOMER BASE OF A BANK61

4.9.2 CATERING CUSTOMERS NEEDS63

4.9.3 ATTRACTING POTENTIAL CUSTOMERS63

4.9.4 STRENGTHENING THE BANK'S EXISTING CUSTOMER RELATIONSHIPS64

4.10 SUMMARY65

CHAPTER 5: CONCLUSION67

5.1 CONCLUSION67

5.2 LIMITATIONS68

5.3 RECOMMENDATIONS70

5.4 LIMITATIONS OF THE STUDY71

5.5 SUMMARY72

LIST OF REFERENCES74

APPENDIX I84

QUESTIONNAIRE84

APPENDIX II87

INTERVIEW QUESTIONS87

APPENDIX III88

CRM CYCLE88

STUDY CONDUCTED BY FEDERATION OF FINNISH FINANCIAL SERVICES (2010)89

DEPICTION OF VALUE OF CRM TO BUSINESS MEASURED IN REVENUE PER EMPLOYEE89

CHAPTER 1: INTRODUCTION

1.1 TOPIC

The topic of our dissertation is “The role of customer relationship management and e-banking in United Kingdom's banking industry”. We intend to analyze the different CRM and e-banking activities employed in the UK's banking industry and how it affects the revenue generation and customer retention prospects.

1.2 INTRODUCTION

1.2.1 BACKGROUND OF THE RESEARCH

In today's fast paced world, customer relationship management has become a widely practised concept. Almost all businesses today realize the importance of effective CRM management. The banking industry has also become a major practitioner of the Customer Relationship Management (CRM) models. For the banking industry in the ...