A more customer-friendly approach to banking needed

Customer service in banks, especially at the branch level where the customer makes his first contact, leaves much to be desired.

Knowledge of banking and the importance of customer service are apparently missing and indifference and ignorance of employees rule the roost. The absence of training and transfer and build up of knowledge have become major casualty and this perhaps can also be a reason for ineffective transmission of various policiesof the Reserve Bank. Ignorance and lack of commitment of officials at the counters puts off customers in no time. This is felt more in new generation high-tech banks.

Several high level committees have been appointed to look into the grievances of customers and improve customer service in banks. But how far they have been able to improve the quality of service and inculcate in the bank officials, particularly at operational levels, the habit of customer service as a way of life and that they are duty bound to improve banks’ business, attract and retain customers with a zero tolerance level for complaints, remains to be seen.

Classification of customers

In practice, customer service depends on the formal or informal classification of customers by banks. Generally, customers are classified as celebrity customers, well- connected customers, high net worth customers, non-resident Indian customers and ordinary customers.

Celebrity customers get all services at their doorsteps just by a phone call and at any point of time. So is the case with well connected customers.. For high net worth customers banks have specialised branches. NRI customers normally are also well taken care of. It is the ordinary customers who are at the mercy of the staff.

Customer satisfaction and customer delight were the slogans progressively propagated by banks over a period, but completely given up these days. No such slogans are heard from any banks these days.

Customer disappointment and customer desperation are the experiences of many a customer and that they silently suffer and put up with such poor service is a fact revealed from contacts and informal surveys with friends, relatives and persons of average means like servants, taxi drivers, small vendors, shop keepers, co-travellers and pensioners.

Ordinary customers who seldom care to take up their problems with the higher ups or do not have the wherewithal to resort to the grievance mechanism of the banks are perhaps the most ignored lot by the authorities while assessing the quality of customer Service.

The grievance mechanism of banks is so designed that it takes time, energy and patience to register the complaint and the customer will think several times before opting for it.

As a result, there are less complaints in official records. Ordinary customers like pensioners, elderly people, and those who are illiterate and have no backing have learned to put up with poor service. It is not practical to resort to grievance mechanism for these customers. If indifference is the issue in public sector banks, ignorance is the problem in new generation banks.

The fact that financial and banking inclusion have not taken off the way the authorities wanted them to is on account of lack of involvement from bank officials and their lackadaisical approach to provide the very minimum customer service. For ordinary customers who just want to save some money either in SB or FD or recurring deposit account, is there any customer service in banks free of hassles?

KYC norm

The concept of Know Your Customer has unfortunately become very handy to keep away the customers instead of understanding the customers, helping them to improve their banking habits, provide them the dignity that they deserve.

The objective of KYC is to eliminate undesirable customers from the point of view of their possible indulgence in illegal and anti-social activities but unfortunately all prospective customers are suspected and kept away by citing some deficiencies in some documents which they provide to banks. The applicability of KYC should arise only after closely seeing the operations in the accounts but in reality, it has been observed as a rule rather than an exception to deny the prospective customers access to any banking service.

Of late, the banks also find comfort in purchasing bulk deposits and borrowing funds from institutions, including the Reserve Bank, to make lending and investment.

The strength of banks depends on mobilised deposits is an established truth. This requires human touch and humane approach. Potential for mobilisation is very huge in this country and people by tradition and habit are savings minded.

Banks have to change their business models and introduce savings products suitable to different categories of customers to attract, retain them and their savings.

Customers, whether small or big, are the main source of business and bank officials at all levels must realise this. Rules, regulations and supervision are only to have some system and order in the business and service to customers is the backbone of banking and its business.

This article appeared in The Hindu-Business Line dated 20th August 2012.