JAIIB · RBWM

CUSTOMER RELATIONSHIP MANAGEMENT IN RETAIL BANKING

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.

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Q

What is Customer Relationship Management (CRM) in the context of retail banking?

A

CRM is a strategic approach that enables banks to manage interactions with existing and potential customers by using data analysis to improve business relationships, retain customers, and drive sales growth.

Q

What is the concept of 'Customer Acquisition Cost' (CAC) in retail banking CRM?

A

Total cost incurred to acquire one new bank customer.

Q

What is the primary objective of CRM in retail banking?

A

The primary objective of CRM is to acquire, retain, and deepen relationships with profitable customers by understanding their needs and delivering personalised financial products and services.

Q

What is 'customer retention rate' and why is it a key CRM metric for banks?

A

Percentage of customers retained over a given period by the bank.

Q

What does the term 'Customer Lifetime Value' (CLV) mean in CRM?

A

Customer Lifetime Value is the total net profit a bank expects to earn from a customer over the entire duration of their relationship, used to prioritise CRM efforts towards high-value customers.

Q

What is 'predictive analytics' in the context of bank CRM?

A

Using historical data to forecast future customer behaviour and needs.

Q

What are the three core phases of a CRM cycle in retail banking?

A

The three core phases are customer acquisition (attracting new customers), customer retention (keeping existing customers), and customer development (increasing wallet share through cross-selling and up-selling).

Q

What is 'customer onboarding' in retail banking CRM?

A

Process of welcoming and integrating a new customer into bank services.

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