The Adoption of Salesforce CRM by Commonwealth Bank of Australia: A Milestone in Customer Engagement

Faculty of Higher Education

Group Assignment Cover Sheet

This cover sheet must be submitted with your assignment

Unit Details	Unit Name	Leveraging IT for Business Advantage
	Code	HI6032
	Year	2024
	Trimester number

Assessment Details	Assessment Name
	Due Date: dd/mm/yyyy

Group Number

	** only list students who have contributed to this assignment
Group Details	Student ID	First Name	Family Name	Contribution %

Group Submission Declaration	Integrity Declaration We have read and understand academic integrity policies and practices and our assessment does not violate these.
Student ID		First Name	Family Name

Submission Date

Executive Summary

Commonwealth Bank of Australia (CBA) adopted salesforce CRM to arrange such primary difficulties as unsuitable data processing, client segmentation absence, customer retention difficulties, and others. This technological innovation made it easier for the bank to scale its services and response time, and appease its customers while increasing their loyalty. The structured and joint concept with existing systems and flexible adaptation made it possible for CBA to improve the relations with customers and increase the efficiency of service provision. The adoption of Salesforce CRM changed CBA’s competitive advantage in the market while creating a solid base for the later development and effective working model.

Introduction

The Commonwealth Bank of Australia was established in 1911 and is one of the major financial institutions in the country, offering a wide range of banking services, including savings accounts, personal loans, and investment solutions. It serves several million customers around the globe. The bank focuses on providing superior service enabled by innovative technology. Due to increasing competition and changing customer expectations, it was becoming increasingly difficult for the bank to handle customer relationships adequately. These issues were inefficient data management, lack of 'personalized' service, and slow response times that truly hampered it from trying to retain customer loyalty and operational efficiency. CBA viewed this challenge as an opportunity to implement a CRM system to meet these challenges. The paper explains how the adoption of CRM technology marked a milestone in turning around Commonwealth Bank's approach to customer engagement in its quest for a competitive advantage within the banking sector, toward better overall service delivery and internal processes.

Literature review

Key Problems and Significance of Cloud CRM Implementation in Banking

According to Nguyen & Ali, (2021), some essential problems that the implementation of Cloud CRM faces in the banking sector, are important to ensure an increase in operational efficiency and customer satisfaction. First of all, it should be data security and privacy. Banks operate sensitive customers' information; thus, they present themselves as a very attractive target for cyber-attacks. Research shows that for any reason, security fears prevent banks from embracing cloud technologies, thereby affecting their CRM strategy.

Second, the integrated challenges of legacy systems Most banks happen to operate an established IT infrastructure that holds very expensive transitions to a cloud-based solution. This integration of systems is highly important since seamless operations are needed for effective CRM deployment (Pookandy, 2020, p25(2)).

Also, organizations have cultural resistance that delays the facilitation of newer technologies. For example, workers are not willing to accept cloud CRM for fear of losing jobs or adjusting to the new procedure.

It could also lead to inefficiencies if there is a lack of certain clear strategic frameworks for implementation. Most times, banks do not have defined metrics to measure their success they underutilize the CRM capabilities. As banks address these key issues head-on, leveraging cloud CRM can have an effective change on customer relationships and improvement in their general performance.

Challenges Faced by Commonwealth Bank Before Implementing a CRM System

Before the eventual rollout of a CRM system by CBA, there were quite several challenges that pitted employees against better management of customer relationships, the delivery of personalized services, and maintaining operational efficiency. These challenges, therefore, reflected internally within the operations and the overall customer experience, reducing the competitiveness of the bank in its fast-changing financial market (Hamid & Rana, 2022, p22(4)). The key challenges and a detailed analysis:

Data Management Challenges

One of the biggest challenges faced by Commonwealth Bank related to not being in a position to effectively handle millions of pieces of customer data that it gathered through different sources. Being one of the biggest financial institutions, it handles millions of customers, and each of its customers creates several data points through transactions, inquiries, and other interactions through different channels like branches, online banking, mobile applications, and call centers.

Decentralized and sometimes fragmented, the existing data management systems could not provide a coherent view of a customer's profile. Such unity led to errors and inefficiencies in addressing queries about customers, further causing delays and dissatisfaction with service. For example, because the information on customers is not consolidated from one department to another, a customer would have multiple or even wrong profiles. These inefficiencies not only wasted time but encompassed the bank's ability to deliver timely and relevant services, thus affecting its competitive edge.

Figure 1: Challenges Faced by Commonwealth Bank Before CRM

(Source: Author, 2024)

Personalization of Services

Personalization lies at the heart of any customer-centric banking today, from retention to satisfaction. It is against this backdrop that Commonwealth Bank grappled with how best to fit its services to meet the unique needs of each customer. The bank could not monitor customer preferences, behaviors, and past interactions centrally using the systems previously had (Biswas et al, 2020, p7(3)).

For instance, the ability of the bank's old systems to generate proper customer insights was also compromised; in effect, this hampered a basis where personalized products or recommendations could be offered. Lack of personalization weakened the customer experience where, other than offering customers tailored services, clients were given generic offerings not at par with their financial goals, spending habits, or life stages. There is no personalization, and customers would, therefore, drift away to competitor rivals that accord them customized financial solutions, particularly since the industry is such that consumer loyalty could be easily swayed to more personalized service.

Customer Loyalty and Retention

Customer loyalty is among the significant parameters of any bank, and in the highly competitive market, it was difficult for the Commonwealth Bank to hold this retention rate at a high level. Some competitors who were already operating with advanced technologies and CRM systems in place attracted better engagement from customers and enjoyed better retention rates by serving customer needs more effectively.

Because the bank was never in a position to anticipate their needs and come up with timely relevant services to them, dissatisfaction crept in among the bank's customer base. Since the bank did not have any full-fledged CRM system, it could not avail analytics predictively for anticipating customer futuristic behavior or trends. Due to the lack of a proper CRM system in place, engaging with customers by the bank couldn't be effectively done by personalizing its services based on specific customer needs. Hence, this constitutes a high level of customer churn wherein efforts at building long-term loyalty turn out to be underwhelming. Without a focused strategy that would have helped understand and address consumer concerns proactively, the bank was allowing some of its most valuable clients to fall into the hands of effective competitors offering better-tailored experiences.

Operational Efficiency

Inefficiencies in operational processes greatly reduced the ability of Commonwealth Bank to offer quality services in good time. The bank's core systems were slow, outdated, and devoid of automation needed to ease operations. Manual entry of data and reporting was prone to human error, driving service delivery even slower (Zhan et al, 2024, p190(4)).

In this case, relating to opening a new account, processing a loan, or handling customer complaints, the time considered was much longer than what was required to complete the task due to a poor workflow management system and cross-referencing of information against multiple, non-connected systems. Inundated with these inefficiencies, customers were frustrated, and eventually, it started to dampen the bank's reputation for reliability and prompt customer service. Delays and operational bottlenecks increased the cost of servicing each one of the customers, where the bank suffered in profitability and overall performance.

Service Delays and Response Time

Fast and accurate responses to customer inquiries and complaints are some of the key variables that drive levels of customer trust and loyalty. The internal processes in the Commonwealth Bank were quite fragmented before the establishment of the CRM system, which lay at the heart of most cases of long response times. With data scattered across various departments and systems, even the very process of responding to a customer inquiry was tense with so much complexity that it involved several steps and collaboration across teams.

In the instance of a query about the status of a loan application, for instance, it meant that the bank representative had to go through various databases and systems manually to get the information required. In other words, it showed there were no structured processes for making that piece of data available to the customer, and any delay in communication would only erode customer trust and confidence. It is not just the level of service that would take a longer time to respond to every customer, but such an increase in response time stretched the capacity of the bank also to process large volumes of inquiries in a shorter time.

Discussion of technology-driven Solution for Commonwealth Bank

With the rise in the complexity of successfully managing customer relationships, Commonwealth Bank found a development atmosphere around technological thinking to fast-track its activities and make customers more engaged. The bank was fighting against some setbacks in data management, personalization, retention of customers, and operational inefficiency due to which the leadership needed to look into CRM platforms that could circumvent such issues.

This was supposed to be a mutual decision-making process between IT and business leadership to ensure the system was lined up with strategic objectives set by the bank. CBA was looking for a CRM that would further increase the scalability of its operations, which would fit into its existing systems with ease and provide features supportive of the bank's long-term goals. After a thorough selection process, CBA selected Salesforce, one of the leading CRM platforms known for its rich functionality in the banking industry. This was a strategic turn of events in the way the bank would approach customer relationship management, service delivery, and satisfaction (Kumar, Mokha & Pattnaik, 2022,p 552(2)).

Decision-Making Process

The decision to implement Salesforce followed a structured process, with key steps outlined below:

Table 1: Decision-Making Process

Step	Description
Needs Assessment	To understand the business requirements of the customers and their pain points, a couple of surveys and focus groups were conducted by the CBA to identify key CRM areas for improvement.
Vendor Evaluation	These factors include, among others, cost, scalability, ease of integration, and support services, after which the bank evaluated several CRM vendors ( Mohaghar et al, 2021, p18(1)).
Stakeholder Involvement	Key stakeholders from different departments were brought on board to ensure the CRM would align both with strategic objectives and operational needs.

The structured approach ensured that the CRM solution chosen by the Commonwealth Bank would meet its current challenge and help support future growth and technological advancements. Salesforce, having a success record in the banking sector, was able to help the bank streamline operations, retain more of its customers, and offer more personalized services.

Table 2: Challenges Faced by Commonwealth Bank Before CRM Implementation

Challenge	Description	Impact
Data Management	Inability to handle large volumes of customer data emerging from different sources.	These were conducive to errors and efficiencies that made service delivery slow and unreliable.
Personalization	Inability to provide customized services to meet the needs of each customer.	Reduced customer satisfaction as generic services did not meet specific customer demands.
Customer Loyalty	Could not retain customers in a highly competitive market due to the inability to perform predictive analysis and personalized engagement.	Reduced customer loyalty with the increased mix, coupled with a loss in market share to more personalized competitors (Nasyrov? et al, 2020, p3(3)).
Operational Efficiency	Inefficient internal processes, slow and outdated systems, and manual workflows.	Delayed services, increased operational costs, and poor overall bank performance.
Service Delays	Long response times due to unlinked processes and systems translate into slow customer service.	The result was a loss of trust and loyalty in the consumer base, as consumers began to expect more prompt, effective responses to their queries.

Before the implementation of its CRM system, some key issues that affected Commonwealth Bank included the inability to handle data efficiently, personalization problems, customer loyalty, operational efficiency, and delayed services. These combined not only affected customer satisfaction and, consequently, trust but also weakened the bank's overall competitiveness in the market. The eventual development and implementation of an effective CRM system were henceforth necessary to address such issues and thereby ensure better management of operations for the ultimate improvement of the customer experience.

Implementation of Salesforce CRM at Commonwealth Bank

The CRM implementation in the Commonwealth Bank was well planned by Salesforce, guiding it on how to implement the integration of CRM into a bank with existing systems and achieve the bank's strategic objectives.

Figure 2: Phases of Salesforce Implementation Plan

(Source: Johnson, 2023)

Planning: Taking everything into great detail, an implementation plan was done, specifying all the timelines, resources, and KPIs that would measure its success. This plan guided every phase of the process to ensure that the milestones were met on time.

Integration: Integration with Salesforce to existing systems at the bank, which included customer databases and transaction platforms, was made. Indeed, such an integration would ensure a smooth inflow and outflow of customer data, enabling the bank to have a holistic view of its customer base to enhance service delivery.

Customization: The Salesforce platform was tailored according to the specific needs of CBA. Personalized dashboards and reporting functionalities were developed to contextually provide insights to the teams by job role. This allowed the better management of customer relationships and operational efficiency.

Testing: To meet the expectations in performance, several testing phases were run by the CRM system (Yapanto et al, 2021,p296(2)). The tests include stress tests, system performance checks, and user acceptance testing. This was important in bringing out issues that needed attention before the official launch was made.

Training: Extensive training programs provide the employees with the full resources required to work with the new system. The training was designed to be very specific for each department so that one would be assured that every team would be up to the full potential of working within CRM.

Meeting Expectations

The guiding principle behind this implementation process was close involvement with key teams from IT, operations, and customer service to ensure that it met all expectations. Feedback mechanisms were established post-implementation to gain insights from users while enabling the bank to institute continuous improvements and optimize functionality for the CRM. In this way, the bank has been able to implement salesforce.com through careful planning, integration, and customization in a manner that best presents its core competencies toward managing customer relationships.

Conclusion

The Salesforce CRM implementation in the Commonwealth Bank of Australia marked a significant risk shift in the way the bank would manage customer relationships, work out internal operations, and respond to the increasingly evolving needs within financial services. Poor management of data, inability to personalize services, a fall in customer loyalty, operational inefficiencies, and delays in responses to customers are critical challenges faced by CBA before the implementation of the CRM system. These altogether influence customer satisfaction and competitiveness in the market. However, CBA was able to overcome these problems with the Salesforce CRM. Such an implementation plan was developed by the bank in quite a structured manner: careful planning of the implementation process was done, smooth integration with prevailing systems was considered, comprehensive customization, thorough testing, and finally employee training significantly upgraded the bank's customer service capabilities. The desired outcome of Salesforce CRM implementation at CBA aimed to make the bank more responsive to the needs of clients, through the provision of personal services in real-time, that would reduce customer churn, and enhance internal processes. Improved customer satisfaction was a final result after such transformation had taken place, thus enabling this bank to remain competitive in the financial services dynamic environment.

Recommendations

The other areas on which CBA should focus, to further enhance customer relationship management and operational efficiency, are discussed below.

1. System Continuous Improvement: Even though CRM Salesforce significantly smoothed operational processes at CBA, the bank should keep a focus on continuous optimization and updating of the system to keep pace with changeable business demands.

2. Enhancement of Data Security: While observing the higher rate of vulnerability to cyber-attacks, CBA must realize state-of-the-art security practices such as encryption, multi-factor authentication, and regular security audits to keep the sensitive information of customers secure and build confidence in using its facilities.

3. Expanding AI and Predictive Analytics: CBA should further develop the implementation of AI and predictive analytics in CRM to enhance customer interaction and customer retention. It would enable the bank to better anticipate customer needs by offering them targeted services and enhancing customer experience.

4. Employee Training and Development: Design and arrange a continuous training program to help staff retain their proficiency in the CRM system, including new feature training and system enhancements, and promote a customer-oriented culture across all departments.

5. Inclusion of Customer Feedback: Implementation of an effective system to capture customer feedback and subsequent action on the same would enable CBA to aim for constant improvement of services provided. With the CRM strategy based on customer feedback, the bank would be in a position to satisfy customer expectations and therefore sustain long-term competitiveness.

This will enable CBA to focus more on those areas and thereby enhance its CRM capabilities further, thus guaranteeing its continued success with customer relationship management.

References

1. Biswas, S., Carson, B., Chung, V., Singh, S. & Thomas, R., 2020. AI-bank of the future: Can banks meet the AI challenge. New York: McKinsey & Company. https://www.mckinsey.de/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/AI%20bank%20of%20the%20future%20Can%20banks%20meet%20the%20AI%20challenge/AI-bank-of-the-future-Can-banks-meet-the-AI-challenge.pdf

2. Hamid, M.A. & Rana, M.W. 2022. Impact of customer relationship management, technological turbulence, and customer-centric management on financial performance. https://www.humapub.com/admin/alljournals/ger/papers/QrYPaG5AIb.pdf

3. Johnson, H. (2023). Salesforce Implementation Project Plan — Execute Phase Wise. Medium. Available at: https://medium.com/@johnsonharry/salesforce-implementation-project-plan-execute-phase-wise-69c1b9af6923 [Accessed 3 Oct. 2024].

4. Kumar, P., Mokha, A.K. & Pattnaik, S.C. 2022. Electronic customer relationship management (E-CRM), customer experience and customer satisfaction: evidence from the banking industry. Benchmarking: An International Journal, 29(2), pp.551-572. https://www.emerald.com/insight/content/doi/10.1108/BIJ-10-2020-0528/full/html

5. Mohaghar, A., Sadeghi Moghadam, M.R., Ghourchi Beigi, R. & Ghasemi, R. 2021. IoT-based services in banking industry using a business continuity management approach. Journal of Information Technology Management, 13(4), pp.16-38. https://jitm.ut.ac.ir/article_83957_919dd1cf0489ffbd79e5d158829ed6bb.pdf

6. Nasyrov?, G., Yuzvovich, L., Knyazev?, E. & Isakov?, N. 2020. Banking operations development in the context of stable interbank competition. E3S Web of Conferences. https://rep.enu.kz/handle/enu/16979

7. Nguyen, N.D.K. & Ali, I. 2021. Implementation of Cloud Customer Relationship Management in Banking Sector: Strategies, Benefits and Challenges. International Journal of Electronics and Communication Engineering, 15(6), pp.242-247. https://www.researchgate.net/profile/Ngoc-Dang-Khoa-Nguyen/publication/352349071_Implementation_of_Cloud_Customer_Relationship_Management_in_Banking_Sector_Strategies_Benefits_and_Challenges/links/60ffcbe30c2bfa282a034bfa/Implementation-of-Cloud-Customer-Relationship-Management-in-Banking-Sector-Strategies-Benefits-and-Challenges.pdf

8. Pookandy, J. 2020. Exploring the role of AI-orchestrated workflow automation in cloud CRM to enhance operational efficiency through intelligent task management. International Journal of Computer Science and Information Technology Research (IJCSITR), 1(1), pp.15-31. https://www.researchgate.net/profile/Jaseem-Pookandy/publication/383819903_Exploring_the_Role_of_AI-Orchestrated_Workflow_Automation_in_Cloud_CRM_to_Enhance_Operational_Efficiency_Through_Intelligent_Task_Management/links/66db03fdbd20173667b9dce3/Exploring-the-Role-of-AI-Orchestrated-Workflow-Automation-in-Cloud-CRM-to-Enhance-Operational-Efficiency-Through-Intelligent-Task-Management.pdf

9. Yapanto, L., Diah, A., Kankaew, K., Dewi, A., Dextre-Martinez, W., Kurniullah, A. & Villanueva-Benites, L. 2021. The effect of CRM on employee performance in banking industry. Uncertain Supply Chain Management, 9(2), pp.295-306. https://growingscience.com/uscm/Vol9/uscm_2021_19.pdf ?

10. Zhan, X., Ling, Z., Xu, Z., Guo, L. & Zhuang, S. 2024. Driving efficiency and risk management in finance through AI and RPA. Unique Endeavor in Business & Social Sciences, 3(1), pp.189-197. https://unbss.com/index.php/unbss/article/view/50