In online banking face to face interaction between bank and customer is not seen. This create huge service gap for banks how to serve and maintain customer relations in online environment. The aim of this thesis is to investigate how banks use “Electronic Customer Relationship Management” tool to maintain their customer relations by using the Internet and what benefits are derived by using this E-CRM tool and how successfully this tool is implemented in a bank. A qualitative study was conducted comprising two cases of banks one from Sweden and second from Denmark to get inside of E-CRM practices. The findings indicate that banks use E-CRM mostly for mass customization, customer profiling, self service, one to one interaction and automatic locks in flow of financial data like security prices which ultimately results in reduced cost of operation and increased customer loyalty and more profits. Similarly staff training and customer feedback is considered as backbone for successful implementation of E-CRM strategy.