Today, banking sector is seen as a catalyst in economic growth of a country and, lot is expected from the banking fraternity. The recognition of banking, as a tool for all inclusive growth by economists, financial planners, reformist etc has made it an important sector in the Government’s planning of economic growth. The banking sector in India is there fore witnessing tremendous changes because of political, social and economic changes that are taking place domestically and internationally.
The concept of banking, which was earlier restricted to accepting of deposits from public for the purpose of, has also undergone sea change. Today the banking sector is seen as a vehicle for all inclusive economic growth, social responsibility and equiv-distribution of national resources.
Today banks are wooing existing customers, prospective customers by offering new facilities, products, and services in order to retain/increase their base in market. The way the banking has changed, so has the customer changed. The customer of today is not what he was yesterday. Today the customer is more knowledgeable, demanding, analytical and aware of his rights. It is therefore a challenging task before the banking sector to revisit their entire working modules, up gradation of skills, technology, and policies so that they are competent to withstand the international competitive environment in future.
All customers from different backgrounds have different expectations. Unless the service standards fit to each person’s expectations, he will not be satisfied. Therefore one has to understand each type of customer thoroughly to be able to provide customer specific services.
The entire process of customer service is dependent on following.
1. Human resources
Any organization’s success or failure is the result of success or failure of its employees collectively. Here the employee doesn’t mean only the staff working down the ladder, but also includes people right up to the top. All the functions in an organization are undertaken by humans, whether it is selection of staff, development of product, making software, formulating policies, devising systems, procedures, defining processes, delivery channels, undertaking market studies etc. Humans may be assisted by the technology for arriving at the decisions. In all the functions enumerated above, different departments do the work separately but the same are ultimately linked to each other to achieve the corporate goal. It is just like gears though rotating independently, move the entire structure in the desired direction. If any gear malfunctions, it brings the entire process to halt. Thus the human beings working in an organization are very important. Handling of humans by humans is a very complex job also.
The job requirements of HRD are to select, train, develop, deploy, and motivate the human resources in the organization so as to get optimum results for the organization.
Banks do not provide physical goods to its customers. The products which a bank offers are mostly financial products and along with these products also provide other services which are not financial in nature, like safe deposit vaults, Locker facilities etc.
In financial products there are basically two types of activities, namely deposit procurement and its deployment profitably. These two activities constitute more than 80% of banking business in all the banks.
- Deposits: Basic structure of deposit is to attract the customer by offering interest on funds or some facility in lieu of interest. However depending upon the needs of different set of customers various types of deposit schemes are formulated. For example, savings bank accounts are for those who want short term savings with liquidity and to make regular deposits and withdrawals etc. Term deposits are for those who want to invest for longer duration having surplus funds not needed immediately. Some may want savings to grow gradually by contributing smaller amounts at set intervals. The ultimate goal of depositor is to keep his money safely in the bank and be able to use when needed. Like wise there are various combinations of deposit schemes based on liquidity, returns and safety.
- Advances: Banks, in a similar way deploy deposits by lending to those who need it at a cost in the shape of interest. Here again the products differ depending upon the need of the customer. It may be overdraft facility, working capital finance, term loan, etc for business or personal needs.
- Other products/ services: Apart from deposit and advances, banks offer various other facilities/services to their clients, like remittances, investment services, fund management, financial advisory services, tax collections, bill payment services etc. to earn fee based incomes.
The flexibility of banks to adopt changing needs and expectation of customers and bring out products/ services to suit customers is an important area in banking services. A robust Research and Development department which can effectively and efficiently bring out newer products/ services based on market feel and futurist visualization of customer preferences is an important aspect in banking services.
Today’s customer is short of time and feels uncomfortable when the process involved in getting the product or service is lengthy and cumbersome. The customer wants very simple processes to get his work done. The processes for any product or service should be at the minimum and at one go. Frequent back references and repeated information and excessive documentation dissatisfy the customer. The processes devised for getting the services should be very customer friendly, easy to understand and complete. The forms, applications, documents should be simple, easy to understand with proper column and space to write. Sometimes it is observed that the space provided for writing is very small. The quality of paper, the font size and the language should be proper.
4. Delivery channels.
Customer satisfaction is also dependent upon the delivery channels used by banks in providing the services. Today’s customer wants effortless, efficient, secure, simple and dependable channels of delivery, whether it is through humans or technology driven channels. To quote an example, suppose a customer uses internet banking and made a third party payment. He would like to know what happened to his payment instructions. He should be able to track the payment on line till it reaches the beneficiaries account. If this facility is not available, he may not be comfortable with the internet banking. Another thing mostly observed in Public sector banks is that their websites are not updated regularly and navigation is very tardy. The forms/ applications are scanned and can not be filled on line. The information/ forms etc. are outdated and not properly tagged.
5. Customer feedback and complaints.
Feed back from customers is of immense help in formulating products, fine tune services and plug the loopholes. However most of the time, feed backs are generally not available and public sector banks are normally not enthused about taking feed back on their services. Rather wherever a customer gives his feedback (read complaint), it is not taken in right spirit by the bank/ concerned staff. Instead of looking into the real cause an effort is made to provide alibis or blame the staff. It may be possible that that the procedure itself is the cause of complaint or it is because of reasons which are not under control of the branch.
Customers may be of three types. One type of customer never complains and continues the relationship. Second type of customer does not complain but changes the bank silently and third type of customer complains. First and second type of customers does not give an opportunity to bank to improve upon its services. Third type of customer however gives opportunity to the bank to improve the service though he may not be preferred over the other two types of customers.
Today no bank is willing to accept complaints from the customers and normally effort is made to somehow get the complaint withdrawn or resolved without analyzing why the complaint has originated. It becomes very difficult for field level staff to get the complaint redressed when the cause or reason of complaint is not because of them. However they are made to beg the customer to give satisfaction letter.
Each complaint when made may be because of so many factors, not necessarily the fault of the person or branch against which it is made. It may be due to system lapse, procedural deficiency, inapt technology, poor in-house work allocation, work flow module etc. Some times the complaints are frivolous and made to harass the person concerned. Though in customer oriented markets, customer is always right but care should be taken that the staff is also protected from frivolous complainants. Each complaint of the customer should be properly analyzed, assessed. It may be possible that route cause may be some where else which should be rectified rather then the concerned staff or branch made the scapegoat.
6. Grievances redressal Mechanism.
Improving upon the services is an ongoing process. The essential inputs are customer feedback, market surveys and the complaints received by an organization. No organization can say that they have zero customer complaints. However an organization which has robust mechanism to redress the complaints and resolve problem of the customer gets recognition as a customer friendly organization. Accepting the mistake and offering compensation goes a long way in retaining the customer. Most of the banks have come out with their compensation policies and customer grievances cells. However they are mostly on paper and seldom followed in the spirit in which they are framed. Even where the compensation policy provides automatic payment of compensation, interest in case of delays etc., it is seldom paid unless the customer demands it.
7. Market Studies.
Market studies are effective tools to study the behavior of customers and their response to present standard of services. It also helps to understand future trends and requirements as needs of the customer’s keeps of changing with change of times. Market research gives way to innovations in products and services. Market studies may be done in-house, or assigned to outside expert agencies or both depending upon the vision of the bank.