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Effects of the Application of the CRM Concept to Profitability of the Banks

Article  in  Economic Themes · September 2018

DOI: 10.2478/ethemes-2018-0017

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 ECONOMIC THEMES (2018) 56(3): 283-299

DOI 10.2478/ethemes-2018-0017

EFFECTS OF THE APPLICATION OF THE CRM

CONCEPT TO PROFITABILITY OF THE BANKS*

Suzana Stevanović
Faculty of Business Economics Bijeljina, University of Istočno Sarajevo,
Bosnia and Herzegovina
 [email protected]

Zvjezdana Gavrilović
Faculty of Business Economics Bijeljina, University of Istočno Sarajevo,
Bosnia and Herzegovina
 [email protected]

UDC Abstract: CRM (Consumer Relationship Management) is a recent

658.89:336. concept. Development and introduction of this concept in the banking
711 operations started in the ‘90s. Due to complex market conditions and the
current environment in which banks operate, it is necessary to have a
new method for doing business, which will provide quick and efficient
Review recognition of clients. This business concept entirely replaces the
paper traditional operating methods of the bank, where the focus is on clients,
their needs, and wishes. The CRM concept enables the bank to respond
to the individualized demands of the clients with quality banking
products and services. With this, the banks manage to deal with the
tough competition and make a profit. The goal of this paper is to examine
the importance, development, and implementation of the CRM in the
banks. The paper tries to prove the hypothesis: Introduction of the CRM
philosophy in the banking operations leads to increased profitability of
the bank.
Received:
Keywords: CRM concept, profitability, banking sector
01.12.2017
Accepted: JEL classification: D12, G21
28.05.2018

*
The paper has been presented at the International Scientific Conference: “Contemporary approaches in
the analysis of economic performances”, held at the Faculty of Economics, University of Niš (Prolom
Banja), October 11-12, 2017.
284 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

1. Introduction

CRM as a concept represents the harmonisation of business strategies and goals by

means of reviewing the needs and requests of the customers. The customers are in
the focus, representing the centre of all business events and activities. Without
application of the appropriate information-communication technologies, it is not
possible to implement the quality analysis of the market and the customers, which
means that there were significant changes in the approach to the marketing,
preparation of the strategies and development of institutions. So, the institutions, by
means of the developed information-communication networks, at any given moment
have the information available on each of their customers, and the database is being
continuously updated. With emerging of the CRM concept, a development of the
various programme packages occurred, which support the application of the CRM
strategy, and which is automated for many of the characteristics. Customer
Relationship Management-CRM represents the alignment of business strategy and
the organisational structure and company cultures, getting the information about the
costumers in order to achieve business benefits and profits.
The paper is segmented into four parts. The first part includes defining of the
term of CRM components, as well as its components. The second part of the paper
shows and explains the role and importance of CRM and the necessity of introducing
this strategy in the company. The third part includes research in relation to the
development and application of CRM in the banking sector. The fourth part shows
the effects of the implementation of e CRM to the profitability of the banks. The
conclusions and research results are included in the fifth part of the paper.

2. The term and components of the CRM concept

The CRM (Consumer relationship management) concept is defined differently by

different authors. This concept is getting increasingly important in all areas of
business, including the banking. CRM represents a new management concept, i.e.
new approach to management of long-term relationships with the consumers
(Unković M., Stakić B. 275-276; 2011). Kotler and Keller (2006) define the
management of consumer relationships as the process of management of the detailed
information on consumers and careful management of all points of contact with the
consumers in the purpose of maximising their loyalty.
Parvitayar and Sheth (2001) defined CRM as a comprehensive strategy, a
process that focuses on attracting, retaining and building partnerships with selected
segments of consumers in order to create superior value, both for them and for the
company itself. Based on a specific database and appropriate CRM software, it
integrates and optimises processes related to client relationships in various areas:
marketing, distribution, customer service, and research and development.
According to Frrencouise Tourniaire (2003), CRM presents:
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 285

1. The whole field of customer relationship management, which consists of

customer-oriented functions such as marketing, sales and customer support;
2. Tools used by functions such as sales force automation;
3. Something between the previous two, the process involved in customer
relationship management.
Modern banking operations start with the CRM strategy. According to this
opinion, the centre of interest for the bank is the client. In order for the bank to
develop and its position on the market, it is necessary to keep information about its
clients.
The development of this concept is associated with the 1990s of the last century,
following the expansion of IT technologies. In beginning, this concept was observed
as a part of the software, but it has evolved into a separate business philosophy,
which represents the new methods for doing business.
The introduction of CRM into the organisation does not represent only a training
of employees for use of the new technologies for approaching the customers, but
also a total shift in the approach, and also in the reasoning of the employees, from
highest to the lowest level of hierarchy in a company. This also represents a problem,
because it is proved through the business practice, that the biggest fear of the
employee is change. On the other side, for the company, the application of the CRM
concept represents a key to success.
The CRM concept in this sense represents a tool which helps to build and
maintain the long-term relationships with customers. With the appearance of new
complex conditions in the market, the CRM represents a good response to such
specific market requirements. The CRM enables overcoming of the crisis situations
which occur frequently in the market.
The base and support for conceiving and implementation of the CRM strategy
for the bank is provided by the so-called IDIC model, which includes the four
elements or steps: (Peppers D, Rogers M, 2004, 68-69)
1. Identify customers;
2. Differentiate customers;
3. Interact with customers;
4. Customise treatment.
These stages in the implementation process for CRM strategy rest on specificities
of the marketing strategy and establishing of the appropriate relationships with the
customers, which imply the specificity, diversity, individual needs and requests of
the customers.
If we approach the CRM architecture as a whole, then the following main areas
are observed: environment, organisation, infrastructure, structure, adjustment, and
integration. (www.ef.uns.ac.rs)
286 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

Figure 1. CRM Architecture - processes, contact points and unique views of users

Source:
http://www.ef.uns.ac.rs/Download/elektronsko_upravljanje_odnosima_sa_kupcima/2014-03-
26-CRM-Definicija.pdf

Various classifications of CRM are present, so there are:

1. Operational CRM
2. Collaborative CRM
3. Analytical CRM and
4. Strategic CRM.
Operational CRM refers to the entry of data on interactions with customers,
through various databases and applications for monitoring of their activities. So, in
this segment of CRM, information is stored in the database without prior analysis. In
order to make certain conclusions from the collected data, it is necessary that this is
done by the operators who are specifically trained for that and who have certain
experience.
Concerning Analytical CRM, it can be said that this segment is the most complex
and of course most expensive part of the entire CRM system. In this segment, a
detailed analysis of the collected data is done, which are based on the expert
knowledge. On basis of the analyses, it is possible to create an individual image of
each customer, his/her individual profile, needs and wants, all in the goal of
strengthening of the mutual interactions. The data are collected from various sources:
list of articles, analysis of deliveries, and history of work orders), as well as the
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 287

marketing analysis. All of the data can be processed with the data mining method or
OLAP analysis.
Analytical CRM consists of: pattern discovery; products, customers, and services
analysis; sorting and customer fractionation and customer value evaluation.
(www.tutorialreports.com)
Collaborative or organisational CRM implies establishing the interaction with
the customers both by means of traditional (phone, fax, mail) and modern media
(SMS, Web, e-mail). With the interactive use of media the system sends customers
the notifications, offers etc., and responses of the users are returning to the system
through operational CRM. (Zelenović V, 2012, 126)
The application of any of these three elements represents a CRM strategy, i.e.
customer relationship management. Successfulness of the implementation of CRM
concept imposes the requirements that all of its mentioned elements are harmonised
as a whole.

3. The importance and role of CRM

The role of CRM is reflected in the effective implementation of the company's

business strategy and objectives through the prism of the needs and demands of
clients. This concept focuses on the harmonisation of business strategies, the
structure of the organisation based on the collection, processing and use of
information, all in order to satisfy clients, by meeting all their needs, in order to
achieve the ultimate result, benefits and profit for the company. With this strategy,
clients are placed in the focus of all business events, with defining key clients.
The modern market environment imposes the need to change the methods in the
application of marketing, where the primacy is given to innovative solutions in the
field of information and communication technologies. The development of these
innovative technologies, especially the Internet, through the computer network,
enables direct connection between supply and demand in the market. CRM
represents a segment of an electronic business, which was primarily conceived as a
philosophy. The emergence of this philosophy has led to the development of many
software packages that implement CRM strategies, where the system is more
automated. In terms of providing information, it is also the basis for business
decision-making in the definition of market positions. So, the usage of this
technology shall be a fundamental change in the philosophy of customer
relationships in the organisation.
It has been proven through business practices that are the largest employee fear
change. On the other hand, for the company, this is the key to success through the
implementation of this concept.
288 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

Financial institutions place their products and services on the market and their
value is created on the financial markets. In recent years, there have been significant
changes in the functioning of financial institutions, which are reflected in the changes
related to the provision of financial services. The development of the interactive
relationship between the client and the financial institution is based on the exchange
of information, where both sides are constantly exposed to learning from experience.
From these relationships financial institutions to collect information, which is later
used for the analysis of future performances to customers, in order to create its long-
term loyalty.
The effectiveness of CRM processes, through the integration of marketing
activities, includes the following:
1. Identification of factors that contribute to a successful relationship with
consumers.
2. Development practices in their relations with consumers.
3. Development process which will benefit consumers.
4. Formulating questions that would help in addressing potential consumers'
problems in the most adequate way.
5. Recommendations for consumers who have complaints about the
product/service.
6. Sales tracking and consumer support.
The reasons why the implementation of CRM has created a competitive
advantage for bank are the following (http://www.preact.co.uk/why_crm/how-
businesses-benefit):
 Data processing in real time to make better, more accurate management
decisions.
 Better organisation of staff time, because the CRM system focuses on activities
to individual customers sorted by priority.
 Improving and better targeting marketing activities to improve client
segmentation and targeting.
 More accurate analytical reports, which serve as a basis for forecasting sales as
a cash flow bank.
 Reduced response times for customers' inquiries, as well as faster time of
correction and exploitation of business opportunities.
 Continuous monitoring of sales results and customer satisfaction, which enables
better control of customer relationships and possible mismatch.
 Automation of the business process due to better distribution of working time.
 It promotes teamwork and improves relationships within the bank, due to the
introduction of all employees with the bank's objectives as well as the monitoring
of progress on these goals.
 CRM connects accounting and back-office applications to join in sales
processes.
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 289

 Automatic verification of previous orders of individual clients as well as access

to all other information.
 Integration of all business processes into one information system.
 Increased efficiency of sales activities due to better assessment of the
effectiveness of the project.
 The protection of private customer data.
 The education of existing but also new employees is shortened by the
standardisation of business processes as well as clear instructions for
performance by sector of the company.

4. Application of the CRM concept on the banking sector

Since the survival and further development of banks depend on providing of added
values, their orientation is directed to deeper business cooperation with the
customers. Introduction of the CRM in the banks imposes itself as a need, since the
researches are showing that the bank customers are increasingly more dynamic, and
increasingly less loyal. The relationship between the bank and the customers does
not represent only a simple sum of implemented transactions in the past.
(Parasuraman A, Zeithaml, V.A, & Berry, L.L, 1988, 12-40)
Essentially, CRM is a business strategy of the bank, which requires a complete
reorganisation of business processes in the bank. In order to be successful, the
implementation of this strategy requires the application of appropriate software
solutions and information technology tailored to the specifics of operations of
individual banks. As the main motivation of each company is profit, which can be
present in their business in the long run if models are found for the long-term
successful satisfaction of the needs of the clients of the bank. Implementation of
long-term relationships with clients is possible with good practice and experience
with appropriate CRM software, which can lead to the realisation of the vision of the
bank.
In order to successfully apply the CRM strategy in the banks, the trust factor is of
crucial importance. In the sense, this represents the ability to create long-term loyal
customers, where the sense of closeness and affiliation will develop. Most frequent
"reason which lies at the base of the dissatisfaction and abandoning by the customers
is that the customers were not satisfied with the value they have been receiving“
(Arsovski S, 2002). This trust results from common goals, respecting of the same
system of values, as well as ability to predict the reaction of the other side.
In order to implement the CRM concept in the banks, it is required to have high
monetary investments in information technology, certain software, as well as to train
the personnel. With the application of CRM, the banks are trying to realise some of
the following goals: retaining customer loyalty, personal service to customers, better
knowledge about the customer, increase in profitability of an individual customer,
290 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

differentiation from the competition, identification of the profitable customers,

attraction of new customers, decreasing of costs with improvement of customer
services, decreasing the costs for attraction of new customers. (Sexauer H.J,
Reimann E, 2006)
According to the research of the author R. Forsyth (Forsyth R, 2001), the most
frequent reasons for poor implementation of the CRM system are the following:
organisational changes (29%), business policy of the company (22%), poor
understanding of the CRM (20%), and incompetence of the implementers (9%).
Implementation of CRM in the business system of the bank's long-term, which
was never fully completed. The fact is that the demands of clients increased in
parallel with the growth of innovative technology and customer awareness of the
need to be seen as the most important link in the chain of production and
continuously maintained at a high level.

Figure 2. Costs and benefits of CRM for the bank and its clients

Source: CRM Practice in Banking Sector - Prime Bank Ltd. vs. EXIM Bank Ltd. February
29, 2012 Dept. of Finance & Banking Jahangirnagar University, Savar, Dhaka -1342. p. 26

The steps for implementing the CRM system are (Brink, A., Berndt, A., 2009):
1. Strategy;
2. System analysis;
3. System design;
4. Implementation of the system;
5. System testing.
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 291

There is no single solution for successful implementation of CRM because each

company is specific and special, so this has to be approached in a specific manner.

5. Influence of the CRM implementation on the profitability of the

banks

Consumer Relationship Management (CRM) proved in practice to be a successful

strategy in the service industry. As the customers are increasingly sensitive to the
prices and as their loyalty to a brand decreases, CRM plays a strategic role in the
attraction of the clients to the banking sector. As in the past years, the competition
in the banking sector became more intensive, the practice has shown that the
successful implementation of the CRM philosophy in the banks leads to increase of
revenues. (Mahesh A, Ganga B, Dubai, 2015)
Three most important profitability indicators for the banks are the following:
 ROA - Return on assets;
 ROE - Return on equity;
 NIM –Net interest margin.
In order to approach the calculation of the ROA indicator, some information is
needed. First, it is necessary to know the amount of net revenues, and the next thing
is to find the amount of the bank’s assets. The ROA coefficient is obtained from the
ratio of net revenues and bank assets.
For calculation of the next indicator of bank’s profitability, ROE, it is necessary
to divide the amount of net revenues with the amount of total share capital, and all
of this information can be found in the Balance sheet of the bank.
In the end, the third most significant indicator of profitability is net interest
margin-NIM, and it can be calculated by determining the net revenues from the
bank’s interests, and this information can be found in the Profit and Loss Statement
of the bank or it can be obtained by deducting the bank’s interest costs from their
revenues from interest. Then, this is divided with the assets of the bank. NIM is
calculated according to the following formula.

HDFC bank (www.hdfcbank.com) is one of the biggest banks in India. This

bank is registered by the Housing Development Financial Corporation Limited
(HDFC), which is dealing with the financing of the residential construction in India.
The Bank has huge funds of around USD 38 billion, distributed in over 1400 cities,
and it has 2544 Branch offices. The products offered by this bank are the following:
Retail banking, Wholesale Banking and Treasury.
292 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

HDFC bank applies the CRM concept in its operations in order to implement its
vision of unique bank, all in the goal of realisation of higher profit and customer
satisfaction. It uses the services of the company CRM.next, which was founded in
2002 and operates in 11 different business areas. In order to successfully implement
and apply the CRM software, it is necessary to harmonise the goals and strategies of
the bank. With this software, CRM customers are provided with the secure access
for creating, access and change of all relevant information continuously from any
location, through the enabled IT solutions. During the introduction of CRM, the
banks cannot forget the fact that this does not refer only to a new form of technology
which will be applied in the bank, but this also represents a new business method.
The banks today do not see CRM as the magical software, but as a key to success
and crucial element of their operations.
There are seven steps for the successful implementation of HDFC's CRM
solution.
1. CRM vision dictates which activities are necessary to implement in order to
create a unique experience and that CRM is deeply engraved in culture
consistently. The management team must constantly communicate instead of
individual teams.
2. Creating a core team. This means that all members of the organisation share the
inputs, which apply to all relevant customer information.
3. Properly configure the system. All interested parties must be involved in the
study and communicate with each other in order to receive feedback, and thus
form a captain of the CRM department, who will manage all advice and
suggestions to improve the implementation of CRM.
4. Understanding all stakeholders. HDFC Bank clearly specified and explained the
benefits of CRM implementation in relation to each role and function of the
banking business, as clients work better if motivated and not forced.
5. Identify the Smart Automation shortcuts. CRM allows you to perform the
integration of multiple systems that are used for regular records and update
customer information.
6. The maturity of the CRM plan. It is necessary that the bank understands its key
role in the CRM process and what are its benefits of using the same, and then
move forward step by step.
7. Continuous maintenance of excitement and desire for development. One of the
tips is to set a two-week focus on the results achieved with a regular update of the
data. (http://www.hdfcbank.com/htdocs/common/pdf/corporate/HDFC-Bank-
AnnualReport-2012-13.pdf)
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 293

Table 1 Analysis of key profitability indicators in HDFC Bank for the period 2012-2016
Profitability 2012. 2013. 2014. 2015. 2016.
indicators (%) ( %) (%) ( %) ( %)
Net interest 18,93 19,18 20,61 21,07 20,41
margin
Return on assets 1,52 1,68 1,72 1,73 1,73
Return on capital 17,26 18,57 19,50 16,47 16,91
Source: The financial reports of HDFC Bank from 2012 to 2016

The CRM philosophy or the business method was introduced in the HDFC
operations in the period from 2008 to 2011. The point of the instruction refers to the
finding of the new solutions in order to achieve: view of the customer with 360
degrees, an increase of productivity in providing of services and improvement of
cross-sales of products and services to the customers.
According to the comparative analysis from the previous table, it can be
concluded that the profitability indicators have grown continuously, with mild
oscillations. After the introduction of CRM in HDFC bank, there was also an increase
in profit and revenues.

Figure 3. The trend of profit in HDFC Bank, from 2007 to 2016

Profit after tax 
15

10

Profit
5

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: http://www.moneycontrol.com/annual-report/hdfcbank/HDF01/2016

According to the presented Image No. 3, the fact is that the profit has a growing
tendency, observed for the period from 2007 to 2016. Since the introduction of the
CRM in 2011, an increase of profit by almost four times was observed.
Emirates NBD bank is amongst the best banks in the world, with the seat in
Dubai. This banking group was founded on October 16, 2007, with the merger of the
second and the fourth largest banks in the United Arab Emirates (UAE). This
 294 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

banking group was made with the merger of Emirates Bank International (EBI) and
National Bank of Dubai (NBD), with the goal of forming the banking champion
which is able to provide increased value to the corporate, retail, private, Islamic and
investment banking throughout the region.
The vision of the Emirates NBD is to be recognisable at the global level, as the
most valuable provider of financial services with the seat in the Middle East. The
bank has over 220 Branch offices throughout the country and abroad. Its business is
increasingly growing from year to year, so the number of customers increases by
30% each year. Its customers are highly digitalised so that the 90% of transactions
are done over various online services through Branch offices. The introduction of
the CRM concept in the operations of the ENBD bank started in 2013, setting the
new goals it wants to reach each year. The launch of the Siebel CRM sales and
marketing model in 2013, had the goal to provide the CRM platform which will be
the centre of the ENBD in order to provide the customers the possibility to focus on
operationally efficient and completely digital banking.
Emirates NBD bank initiated the CRM implementation process in 2012 in order
to provide the programme of excellence, which contributed to the significant
improvements in providing services by obtaining feedback from the customers.
Director of Marketing of the Emirates NBD bank, Vikram Krishna, pointed out that
the key for the development of services in their bank is to provide superior services
to the customers. The results after introduction of CRM show an increase in revenues,
made thanks to a change in strategy in approach to the customers.

Table 2. Analysis of key profitability indicators in Emirates NBD Bank

for the period 2007-2016

Profitability 2007. 2008. 2009. 2010. 2011. 2012. 2013. 2014. 2015. 2016.
indicators
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Net interest
margin
63.97 53.53 46.39 24.07 25.49 25.01 45.58 49.03 56.34 55.55

Return on 1.58 1.37 1.19 0.82 0.89 0.86 1.00 1.31 1.70 1.56
assets

Return on 16.28 14.48 11.63 7.14 7.38 7.16 8.33 10.47 13.40 12.71
capital

Source: The financial statements of Emirates NBD Bank for the period 2007-2016

According to the presented table, it can be concluded that the profitability

indicators have gown continuously, and especially since 2012 after CRM was
introduced. So, for example, in 2016 compared to the primary 2012 the net interest
margin increased by two times (from 25.49% to 55.55%).
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 295

On basis of the above image the increase of profitability since 2012 can be clearly
seen after the introduction of the CRM concept in the operations of the Emirates
NBD and there was an increase of profit, so, for example, in 2012 when the
implementation of CRM started and in the last observed year, 2016, an increase of
net profit from 2.6% to 7.2% can be noticed, and that is almost three times higher
percentage.

Figure 4. Trend growth in net profits Emirates NBD Bank from 2011 to 2016
8.00
Net profits 7.1 7.2

6.00
5.1

4.00 3.3
2.50 2.6
Net profits
2.00

0.00
2011 2012 2013 2014 2015 2016

Source:http://www.emiratesnbd.com/plugins/FinanceManagement/AnnualReport/Annu
alEnglish/EmiratesNBD_AnnualReport_2016.pdf

Intesa Sanpaolo banking group was established with the merger of Banca Intesa
and Sanpaolo IMI in Italy. The leading banking group in the Italian market has a
growing presence focused on Central and Eastern Europe, the Middle East and
Northern Africa. Until 2010, the revenues of the bank were around USD 877.66
billion. Intesa Sanpaolo has Brach offices all around the world, around 1600 of them
and over 8.3 million customers in the retail and commercial banking.
Introduction of the CRM concept in the Intesa Sanpaolo Group started in 2012
and included around 30 crucial employees, who attended training and educations.
The implementation of the CRM was directed to two main goals: (www.efma.com)
1. It is necessary to make a cultural shift in the education of employees from
Head Office in the entire RM network, where there are several courses directed to
transformation of employees empowering them to achieve success and customer
satisfaction;
2. Develop good technological solutions, with the goal of analysis of the great
quantity of data, conduct necessary educations for obtaining the skills to conduct the
analyses in real time.
296 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299

The results achieved after implementation of the CRM software in the Intesa
Sanpaolo are reflected in increased satisfaction of customers and effectiveness in the
sale of services. So, on average around 4.1 million interactions in real time occur in
average over the mobile and online services per day. High level of adaptation of the
statistical models led to increasing of the sale of debit cards by six times, by +12%.
The investment for the introduction of the CRM software amounts to around USD 1
million.

Table 3. Analysis of Key Profitability Indicators in Intesa Sanpaolo Bank for the
period 2007-2016
Profitability 2007. 2008. 2009. 2010. 2011. 2012. 2013. 2014. 2015. 2016.
indicators (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Net interest 45.63 19.86 16.06 19.57 -50.47 12.26 -47.58 9.69 17.28 21.84
margin

Return on 1.68 0.47 0.44 0.42 -1.26 0.24 -0.70 0.20 0.39 0.42
assets
Return on 15.88 3.87 4.50 5.09 -16.29 2.12 -4.31 1.08 2.99 6.06
capital

Source: The financial statements of Intesa Sanpaolo Bank for the period 2007-2016.

According to the presented Table 3, it can be noticed that there are some
oscillations in the key indicators of profitability in the Intesa Sanpaolo bank for the
observed period. So, after the initial introduction of the CRM concept in 2012, there
is a mild increase in the observed indicators.

Figure 5. Consolidated profitability indicators for 2015 and 2016

Net Income/Average 0.4
shareholders equity (ROE) 0.4
31.12.2016
Net Income/Average 5.9 .
shareholders equity (ROE) 6.4
31.12.2015
50.8 .
Cost / Income
51.2

0 20 40 60

Source:http://www.group.intesasanpaolo.com/scriptIsir0/si09/contentData/view/content-
ref?id=CNT-05-00000004D7191
Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 297

Conclusion

The vision of a bank is to operate with a high profit. In the difficult and complex
market conditions, this intention of the bank is becoming increasingly hard to
achieve. So, for new conditions, it is necessary to have a new principle of operations,
which is presented in a form of CRM concept. The goal of a bank is to retain the
existing customers, increase the loyalty level, and all of this is enabled with the
implementation of the new business strategy and philosophy-CRM. This concept
enables the development of the bank and its survival, and on the other side also the
individualised approach to the customer, meeting the needs, requests, and desires of
the customer with the long-term character.
According to the conducted comparative analyses of key indicators of profitability
on the example of three banks: HDFC bank, Emirates NBD Bank and Intesa Sanpaolo
bank, which have introduced the new philosophy of business and operations-the CRM
philosophy, the conclusion is reached that after introduction of CRM in the systems of
these banks the profitability has increased significantly. However, it has to be pointed
out that the effects of the implementation of CRM in the bank cannot be clearly notices
in the short-term level, but the effects of the application of the CRM philosophy in the
banks could be evaluated and analysed after certain longer period after the
implementation. After the conducted comparative analyses of the profitability, of the
selected banking groups and the obtained results, the conclusion is reached that the
hypothesis of the paper has been proved.

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EFEKTI PRIMENE CRM KONCEPTA NA

PROFITABILNOST BANAKA

Apstrakt: CRM (engl. Consumer Relationship Management) je koncept novijeg

datuma. Razvoj i uvođenje ovog koncepta u bankarsko poslovanje započinje ’90-
ih godina. Zbog kompleksnih tržišnih uslova i današnjeg ambijenta u kom
posluju banke, neophodan je novi način poslovanja, koji će brzo i efikasno
obezbediti prepoznavanje klijenata. Ovaj koncept poslovanja u potpunosti
zamenjuje tradicionalni način poslovanja banke, gde se fokus stavlja na klijente,
njegove potrebe i želje. CRM koncept omogućava banci da kvalitetnim
bankarskim proizvodima i usluga odgovori na individualizovane zahteve
klijenata. Ovim banke uspevaju da se izbore sa oštrom konkurencijom i ostvare
profit. Cilj ovog rada je da se sagleda značaj, razvoj i implementacija CRM-a u
banke. Radom se nastoji dokazati hipoteza: Uvođenje CRM filozofije u bankarsko
poslovanje dovodi do povećane profitabilnosti banke.
Ključne reči: CRM koncept, profitabilnost, bankarski sektor

Authors’ biographies

Suzana Stevanović graduated from the Faculty of Business Economics in

Bijeljina, University of East Sarajevo. During her studies she received
scholarships from the Municipality of Bijeljina and the Ministry of Education and
Culture of the Republic of Srpska. She currently works at the Faculty of Business
Economics as a senior assistant. The title of assistant was awarded in 2012, a
narrow scientific field: Business Finance. Subjects taught: Business Finance,
Theory and Balance Analysis, Financial Markets, Investing in Securities. She
obtained the title of senior assistant in 2016. She completed her Master studies at
the Faculty of Business Economics in 2016, with an average of 10.00. The theme
of the Master's work theme was "Influence of the structure of banks' capital on the
 Stevanović, Gavrilović / Economic Themes, 56(3): 283-299 299

performance of enterprises and the competitiveness of the economy in Bosnia and

Herzegovina". For funding this work she received a scholarship from the
Municipality of Bijeljina. Since 2012 she has been participating in the Organizing
Committee of the magazine "New Economist", as well as the EkonBiz Scientific
Conference organised by the Faculty of Business Economics in Bijeljina. Also, she
was appointed Secretary of the Department of Accounting, Auditing and Business
Finance in 2016, the University of East Sarajevo. She is a Ph.D. student, at the
Faculty of Economics in Subotica, University of Novi Sad, second year.
Zvjezdana Gavrilović graduated from the Faculty of Economics in East Sarajevo
in 2007. She obtained an MSc in 2012. She is a Senior Teaching Assistant on
Marketing, International Marketing, Marketing Services, Consumer Behaviour
and Business organization at the Faculty of Business Economics in Bijeljina. She
is also a PhD student at the Faculty of Business Economics in Bijeljina.

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