The CRM System of the Islamic Bank of Britain - Case Study Example

THE RELATIONSHIP MANAGEMENT SYSTEM OF THE ISLAMIC BANK OF BRITAIN (AL RAYAN BANK) By Location The CRM system of the Islamic Bank of Britain (Al Raya Bank) Introduction In business, customer relationship management (CRM) refers to the strategy applied in the management of relationships between a company’s existing customers and potential ones through the use of information technology (Ang & Buttle 2006). The significance of CRM is that it helps a company to increase its profitability levels through improved relationships with customers (Kim 2012). The relationships managed by CRM may stretch to include service users, suppliers, or between employees within a company so as to achieve its main function, which is increasing profit margins. When applied effectively, CRM systems tend to influence productivity, especially if it becomes part and parcel of an organizations operations (Vella & Caruana 2012). One significant importance of CRM is that it helps in the tracking of the history of customer interaction that can be helpful in closing future business deals between a company and its customers (Yang & Nguyen 2011, p. 6522). For CRM to be effective, it has to have an automatic system update to the customer relationship data that employees can access with ease and share. An up to date CRM system helps in storing service requests by each customer, their information, preferences, contact information, and history that is relevant in one place that can be accessed on all computer devices for those with authorized access (Jayashree, Shojaee & Pahlavanzadeh 2011, p. 340). One of the companies that have reaped the benefits of CRM systems is Al Rayan Bank that was formerly the Islamic Bank of Britain (IBB). The bank operates entirely based on the Sharia principles and also offers its services to customers that are non-Muslim. Based on this overview, this essay will analyse the efforts of Al Rayan Bank in building customer service and ways in which this organization can improve their customer service in the future in order for it to be able to continue competing on the global market. The bank has operational branches in Leicester, London, Birmingham, and Manchester while also have agents in Luton, Tooting, and in Blackburn. In 2014, the fifth largest Islamic bank in the globe, Masraf Al Rayan acquired the Islamic Bank of Britain and the bank changed to Al Rayan Bank to reflect the change that the bank had experienced (Oxford Business Group 2014, p. 74). Overview of the company Islamic Bank of Britain was established in 2004 with the aim of providing financial services and products to British Muslims who had been sidelined by the banking sector. The banks lay claim to being the only wholly Muslim bank because it provides ethical banking alternatives that are not provided by other banks. The bank is based on five values, which are being Sharia compliance, good value, security, community directed, and pioneering. The founders of the bank were initially a group of investors from the Middle East who sought to address the need for Sharia-compliant banking and financial services. Their effort in building customer service In October 2011, IBB turned to the CRM system through cloud computing so as to assist in its effective delivery of services. The process of saving on the cloud was accomplished in January of 2012. IBB contracted Salesforce.com a computing company from the US because of its renowned reputation of offering CRM products. Al Rayan Bank competes with industry big fish such as Lloyds and HSBC who spend millions of pounds on IT management, which is expected especially because they have huge budgetary allocations for this function. IBB opted to apply CRM as part of its operations because it was much cheaper to manage considering their smaller budget compared to that of Lloyds and HSBC (Wang 2007). One understanding that IBB has been that customer service should not be hindered by costs that a company has to incur in order for their functions to be competitive or have the ability to meet customer expectations and influence their satisfaction (Wang, Hu and Yu 2010, p. 178). The beauty of the cloud computing function offered by Salesforce.com to IBB for CRM is that the annual subscription that the bank pays for this service has remained relatively the same since they partnered in 2011, which makes it an affordable service. When IBB embarked on the journey of CRM, the idea was to apply cloud computing to facilitate tasks such as claims management because of the tracking customer information and communication with the bank over their claim (Oghojafor, Aduloju and Olowokudejo 2011, p. 454). The above was supposed to make the process to be much easier and the bank was able to achieve this function and settle claims with ease because the access to customer information was made easy. Cloud computing has been available for some years, but many banks have been reluctant to adopting these services mainly because they are not certain about how secure this option is in terms of the data that is stored in it. However, the pressures influenced by costs and organizations starting to familiarize themselves with this technology have changed this trend significantly. IBB uses the software, platform and infrastructure as a service so as to aid the bank in making profits and also in making the bank’s operations to be effective (Nguyen 2012). According to the top management at Al Rayan Bank, the profits have continued to soar since the inception of the cloud computing service for CRM that partly attributes to this function. Other than storing customer communication and data, cloud computing used by the bank also helps in collaborating the various departments within the bank within the Salesforce.com cloud platform (Khodakarami and Chan 2014, p. 27). One of the customer related functions that were initially stored in spreadsheets were the weekly customer surveys, which helped in increasing effectiveness for the bank. Aspects of the day to day operations are improved by super users that have unrestricted access to different areas within the bank and whose work is to ensure that the banks operations run as required. On the contrary, Al Ryan being a strict Muslim compliant bank, it had to find other software that would be able to complement their practices and the services that they offer. Based on this need, IBB uses the Misys Software as a banking tool, which did not have Islamic based modules that were later added. The Misys software helps in facilitating global trade and risk management through the banking software that is effective in delivering financial risk management services to leading financial institutions. The Misys software that IBB used was essential in building Sharia products that were suitable and owned by the bank by having a fully functional Islamic module. As much as the application of this advanced technology was technical, the record keeping and accounting systems that the Islamic bank needs are relatively the same as those applied in the conventional banking, but the difference is in data storage. The other difference is that this system is heavily guided by the Islamic principles that do not support the charging of interest and practices that support bad vices such as gambling. Sharia experts within the bank are charged with the responsibility of making sure that the bank adheres to the Islamic principles through a Sharia compliant (ethics) department that can even advice on interest rates for customers to be reduced even if they are calculated by any software (Al Rayan website 2015). Other products used by IBB within the cloud computing service include sales cloud, chatter, service cloud and Salesforce 1 Platform. In the past account opening for IBB customers used to be long and took at a lot of time, but thanks to the cloud computing account opening has become a matter of minutes, which attracts more customers to the bank. According to the Chief Operating Officer of the bank, Mohamed Gamil, the bank had to automate the entire account application process where no paper trails are required to hence reduce on the tedious process of filling out information by writing as intimated by Holley (2013). The application process has been made possible by cloud computing, where customers seeking to have accounts at IBB do not have to visit the IBB bank branches physically so that their details are obtained, but can do so on the bank’s website. The platform that Salesforce.com offered to IBB is one that can be used by every interested party that include its customers and its employees. Other than being cost-effective, it is also easy to use because when a customer clicks on the ‘Apply’ button on the website they have already accessed the cloud system. Other than being used in banking, IBB has also included Salesforce-supported CRM system in its flagship product of allowing their customers to purchase homes by offering ethically based mortgages. The Salesforce platform supports every activity and operations of the bank in one platform, hence proving its efficiency as a CRM system. Gamil argues that this business solution has become a critical element in running the operations of the bank despite the fact that it began as a customer relationship management solution. This system has provided an opportunity for growth for the bank because it has helped in reducing the banks overheads by a significant margin, where the funds are channeled into other uses. How the Islamic Bank of Britain can improve customer service in future through customer relationship management systems Through the application of the Salesforce supported platform, IBB has been able to register success in its banking system and also in its home financing facilities. The bank can also use the same platform to offer insurance services and products to their customers because this function is a business principle as long as it applied within the ethical confines of Islamic law (Soliman 2011, p. 171). The beauty of using this software in insurance is that allows for customer response within the shortest time possible from this initiative. In essence, diversification of products and services using CRM systems is essential because it allows a business to gain competitive advantage. Al Rayan operates in a pool of other four Islamic guided banks, meaning that competition is stiff in this industry and it is pertinent for the bank to stay ahead of the pack by introducing ducts and services. Other than insurance, cloud computing can also be helpful in consolidating customer information when they seek loans as this CRM system can be used in integrating the viewing customer data to be real time (Chan 2015, p. 115). The above reduces the loan application process for customers as their information can be accessed at the same time and can facilitate the process to be complete in less than a day. Essentially, customers will reduce the number of physical visits to banks while seeking loans because their data is already available on the cloud computing system and can even be moved to online platforms where customers can fill out loan forms and vetted at the convenience of their location. Other than allowing IBB employees and customers to interact, the bank can also include their business partners to being part of the users of this cloud computing function because it facilitates easy communication. The above will allow the partners to track the sales progress of the bank and also help them in analysing ways in which the bank can be able to grow into a substantive Islamic bank in the UK and also go global. Through the cloud computing ability, authorized can log in from whichever part of the globe, meaning that the banks operations cannot stall at any one time. Summary The CRM system that IBB uses have helped the bank in customer service and support, increases sales opportunities and activities through the analysing of the sales process at the various stages and also in web-based customer management. IBB employees can access customer data through the Salesforce platform from wherever they may be secure, which helps in the smooth running of the banks operations (Salesforce.com 2015). The CRM system also allows customers to log in and make inquiries, which are responded to in real time meaning that customers can obtain immediate feedback. IBB is a Sharia compliant bank that is heavily guided by Islamic principles, meaning that the CRM system that they use has been configured to an Islamic module so as to encourage ethical banking. For a business, the introduction of a CRM system should be focused on reducing IT-related expenses in terms of data storage, which IBB has been able to drastically reduce (Kennedy 2006, p. 63). Financial institutions that have not adopted a CRM should do so for them to be able to compete effectively and also be on a path to making a global impact. Various opportunities exist in cloud computing and the application of CRM systems that can complement the operations and practices of an organization. All an organization has to do is train their staff on how to use the application and also make it easy for customers to utilize the services supported on such platforms , which illustrates that a company is operating at high-efficiency levels (Amoako et. al 2011, p. 17). The moving from the conventional storage of data to cloud computing might be costly in terms of putting up the initial infrastructure, but it is a worthy investment because the costs get cheaper once the CRM system has been put in place and effective (Zahay, Peltier and Krishen 2011). When customers are satisfied with the mode of service delivery offered by an organization, then a company such as IBB can be assured that is on a path of achieving competitive advantage and increasing its profitability. The customer relationship management system applied by IBB and facilitated by Salesforce has been effective as intimated by Gamil, the bank’s COO and other financial service providers should borrow a leaf. A CRM system should not be complex, but should be able to facilitate all the needful functions that it has been developed to do for a business (Opelt et.al 2013, p. 54). Bibliography Al Rayan Bank Website. 2015. An ethical choice. Available from: http://www.alrayanbank.co.uk/useful-info-tools/about-us/good-money/june-2014/an-ethical-choice [25 June 2015]. Amoako, G. K., Arthur, E., Bandoh, E. and Katah, K. R. 2011. The impact of effective customer relationship management (CRM) on repurchase: A case study of (GOLDEN TULIP) hotel (ACCRA-GHANA). 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Peltier, J. & Krishen, A. S. 2011. Building the foundation for customer data quality in CRM systems for financial services firms. Journal of Database Marketing & Customer Strategy Management .19, pp. 5–16. Read More