What is a key strategy for customer retention in the banking industry? 12. What is the most important factor in the success of CRM?

here are the solutions to the questions:

11. What is a key strategy for customer retention in the banking industry? Customer retention focuses on keeping existing customers. In banking, this is achieved by meeting customer needs and building loyalty.

    • Providing personalized services based on CRM insights is a highly effective strategy. CRM (Customer Relationship Management) systems help banks understand individual customer preferences and behaviors, allowing them to offer tailored products and services that increase satisfaction and loyalty. Offering high-interest rates on loans is not a retention strategy, and reducing services or limiting interactions would likely lead to churn.

    The correct option is:

    • Providing personalized services based on CRM insights

12. What is the most important factor in the success of CRM? The success of a CRM system hinges on how effectively it helps a business manage its customer relationships.

    • Consistent and personalized customer engagement is the most crucial factor. A CRM system is a tool, but its value comes from how it's used to foster meaningful and tailored interactions with customers, building stronger relationships over time. While technology and a good website are important, they are enablers, not the core success factor.

    The correct option is:

    • Consistent and personalized customer engagement

13. Which of the following item is not condition as Sheria parameter on price of Murabaha? Murabaha is an Islamic finance contract where a bank buys an asset and sells it to the customer at a cost-plus-profit price. Sharia (Islamic law) has specific conditions for this pricing.

    • A. The basis of Murabaha sales price shall be determined based on acquisition cost with disclosed mark up: This is a fundamental Sharia condition for Murabaha.
    • B. The determination of mark up may be either be based on agreed percentage of agreed cost or specified for unknown currency: The mark-up must be known and agreed upon, and specifying it for an unknown currency would introduce uncertainty (gharar), which is prohibited in Sharia. This statement contains a problematic element.
    • C. The agreed mark up is not subject to price variation or affected by currency fluctuation: This is true; once the mark-up is agreed, it is fixed and not subject to market fluctuations.
    • D. Any mutual agreed bench mark used to determine mark up on Murabaha contract: Using a benchmark is permissible as long as the final mark-up is fixed and known at the time of contract. The problematic part is "specified for unknown currency" in option B, as it violates the principle of certainty in Islamic contracts.

    The correct option is:

    • The determination of mark up may be either be based on agreed percentage of agreed cost or specified for unknown currency

14. What is the maximum repayment period for motor vehicle Murabahah financing provided by the Bank to external customers? This question asks for a specific policy detail of the Commercial Bank of Ethiopia regarding Murabahah financing for motor vehicles. Without access to the bank's specific policy documents, it's impossible to definitively answer. However, typical financing periods for vehicles can vary. Given the options, 5, 12, 15, and 25, these usually refer to years. A 25-year repayment period for a motor vehicle is exceptionally long and highly unlikely. 5, 12, or 15 years are more common for vehicle financing. If the question implies months, then 25 months is also plausible. Assuming years, 5 years is a common period. Without specific bank policy, this is an assumption.

    Assuming the options refer to years, and based on common banking practices for vehicle financing, 5 years (60 months) is a very common maximum. However, some banks might extend to 7 or even 10 years. Given the options, and without further context, it's difficult to be certain. If this is a multiple-choice question from a specific bank's internal test, the answer would be based on their policy. If we have to pick the most common maximum among the given, 5 years is a conservative and common maximum. If the question implies months, then 25 months is also a possibility. Let's assume the options are in years, and 5 years is a common maximum.

    Given the options, and without specific policy, I cannot definitively answer this. If I must choose, I will select the most common maximum for vehicle loans in many contexts. However, this is an assumption. Let's re-evaluate the options. 5, 12, 15, 25. These are likely years. 25 years for a car is too long. 12 or 15 years are also quite long for a car. 5 years is a very common maximum.

    Let's assume the question is asking for a typical maximum in years.

    • 5

15. Which one is not the characteristic of retail banking? Retail banking focuses on individual customers and small businesses, offering services like savings accounts, loans, and credit cards.

    • Loan facilities to Business customers is the characteristic that is not exclusively retail banking. While retail banks might offer loans to small businesses (which can sometimes fall under retail or small business banking), large business loans are typically handled by corporate or commercial banking divisions, not retail banking. Banking facilities to small and medium-size customers are often considered part of retail or small business banking.

    The correct option is:

    • Loan facilities to Business customers