Context:
Governor Sanjay Malhotra stated in his address at the RBI’s annual conference of ombudsmen that all banks and NBFCs need to enhance their customer services. Complaints under the RBI’s Integrated Ombudsman Scheme have increased at an extraordinarily CAGR of 50 per cent in the last two years up to FY24, with RBI capacity to process the complaints rising a mere 25 per cent, thus leading to sizeable backlogs.
Augmented Reality (AR)
Augmented reality (AR) within the banking industry is rapidly changing how financial institutions engage with customers and manage their day-to-day operations. As technology evolves, augmented reality banking tools are becoming indispensable, offering new ways to elevate customer experiences and improve the efficiency of financial services. These tools enable banks to create immersive, interactive experiences that were once thought impossible.
Augmented reality in banking includes applications like visualizing financial data through AR dashboards for enhanced decision-making and customer interactions. Banks use AR to overlay relevant account information during client consultations and to interactively demonstrate banking products and various services.
RBI Recommendations
- Senior bank officials must dedicate some time every week to the grievances of customers.
- Systems and mechanisms under banks must be built so that the volume of complaints is reduced.
- He referred to the grave concern that competitive banks cannot survive in really providing excellent customer service, particularly now in the era of digital payments.
Challenges
- Awareness
- A significant chunk of customers, especially from the disadvantaged income groups, may not file a complaint due to simply not knowing its existence.
- Urbanization
- More than 70% of complaints for about FY24 are coming from urban and metro centers, leading to the conclusion that the rural and semi urban customers are still underserved.
- Decline in Manpower
- Public Sector Banks (PSBs) have seen a reduction of over 150,000 clerks and a decrease in total employees from 2013 to 2024.
- There is therefore a threat to the quality of customer service regarding staff scarcities.
Operational Concerns
- Leadership Vacancies
- Some 40% of the director level positions at the PSBs have remained unfilled, according to details given by the government in Parliament.
- It threatens governance, strategic decisions, and customer centric operations.
- PSBs vs. Private Banks
- Although PSBs continue to register complaint records, private banks are required to construct redressal systems, regardless of workforce increases.
Quality customer centricity is important in the banking and financial services industry, particularly where financial inclusion and customer trust are important.
Source: BS
