A Customer-Centric Approach-Navigating the Path to Excellence in Customer Service
Swaminathan J,
Deputy Governor,
Reserve Bank of India
(He spoke recently at the Conference on Customer Service, held in Mumbai, with the topic on ‘A Customer Centric Approach-Navigating the Path to Excellence in Customer Service’. Edited excerpts)
We have gathered here to discuss a crucial aspect of our banking and financial services sector: customer service standards and grievance redress mechanism in RBI regulated entities.
The focus must be on nurturing a customer-centric approach, for trust is the bedrock of the financial services business, and customer service, along with prompt grievance redress, is the bridge to building that trust. I would also like to highlight the importance of cultivating a culture of continuous improvement as ensuring quality of customer service is a journey and not a destination.
The Need for a Customer-Centric Approach
The predominant source of your liabilities is customer deposits whose interest that we all seek to protect. It is, therefore, imperative to place them at the heart of operations of any bank. In fact, a customer-centric approach is not an optional thing; it is a necessity.
When you prioritize customer needs and concerns, you strengthen this trust, which in turn promotes your business and financial resilience, side by side.
Staff should ensure that products are recommended based on the customer's financial situation, goals, and risk tolerance. By adhering to a policy framework in letter and spirit, REs can greatly reduce the mis-selling complaints which form a substantial portion of the complaints that we get to see.
Addressing Root Cause of Customer Complaints
In order to truly embrace customer centricity, we must delve into the root causes of customer complaints. They point us toward areas needing improvement. By addressing these root causes, we can prevent complaints from arising in the first place. Regular analysis of customer feedback, complaints, and suggestions can serve as an invaluable compass in navigating toward a service-oriented future. Root cause analysis will not only allow rectification of individual grievances but also enhance systemic processes to prevent reoccurrence.
It has also come to our notice that some of the banks have adopted an innovative approach to classify certain complaints as queries, which results in understating the problem. This results in a false sense of complacency, and the truth will be out in any case. We seek to dis- incentivize such practices and as a Regulator, we will not hesitate to act in case if it turns out to be an entity wide behavior.
Resolution at the Point of First Contact Regulated entities should empower their customer facing staff to resolve issues at the point of first contact. The objective should be to ensure that complaints rarely need to be escalated to the Internal Ombudsman or the Reserve Bank Ombudsman. Well-informed and empowered frontline staff can transform customer grievances into opportunities for building stronger relationships. A less than satisfying work environment results in employee dissatisfaction which in turn may impact their ability to serve their customers with a smile. The tone at the top is very important – if you push your employees to do business at any cost, it is likely that they may relegate the customers’ interests to the background. Continuous learning and skill enhancement programs must be in place to adapt to changing customer expectations and the evolving landscape of financial services. While it may not be possible to fulfil the demands of your clients to their full satisfaction, no one has a right to behave badly with the customer.
Responsible Handling of Complaints
The intent behind the Internal Ombudsman (IO) Scheme is to enhance the level of customer service by providing an independent and impartial apex level authority within the regulated entity itself to address customer complaints that are not resolved satisfactorily. Accordingly, complaints should only be rejected after careful examination by the Internal Ombudsman. The role of the IO is pivotal in ensuring fair and just resolution. Our feedback indicates that the IO framework in a few institutions is way below the requirement and adequate importance is not being accorded to this process by the management. This is another area where I would like the Customer Service Committees of the Board to pay enhanced attention.
By investing in the Internal Ombudsman's capabilities, regulated entities demonstrate their commitment to transparent and fair grievance redress.
Combating Cybercrime
In today's digital age, the battle against cybercrime is constant. Regulated entities must strengthen their systems, raise customer awareness and collaborate with other banks and law enforcement agencies. Cybersecurity awareness campaigns, regular drills, and collaborative initiatives can fortify our defences against the ever-evolving threats in the digital realm.
Cultivating culture of continuous improvement
Customer expectations evolve, and so must the services offered. Regulated entities should actively seek feedback from customers, encourage innovation, and be willing to adapt to changing circumstances. By embracing change and innovation, regulated entities can stay ahead in a rapidly evolving financial landscape.
Rather than viewing fintech as a threat, we should see it as an opportunity. To navigate the changing landscape, traditional institutions must be willing to adapt and evolve as well as collaborate. It is essential to have adequate oversight whenever a product or service is being offered through such partnership channels.
The manner in which you handle customer complaints impacts your reputation to a large extent. In this journey, as a Regulator, we are keen to walk alongside the Regulated Entities, as we believe that together we can protect the customers’ interest better.
