Improving Customer Service Through Technology

Submitted By:
Dr. Narinder Kumar Bhasin

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 STRUCTURE OF REPORT

TABLE OF CONTENT

Pg. Nos.
Section I: Abstract , Hypothesis , Objectives , Research
Methodology & Design
Abstract 3
Objective of the Study 5
Research Question
Research Methodology 5
Research Design 6

Section II: Micro Research Report

Introduction 7
Customer Services Management 9
Banking on Technology : 15
Cost Reduction
& Risk Management
Summary of Main findings and Recommendations 26
Analysis and Results of Survey Questionnaire 31
Conclusion 33

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Section 1 : Abstract , Hypothesis , Objectives , Research Methodology & Design

1. Abstract :

1.1 Customer Services thrives on trust and confidence of the customer .hence a qualitative customer services is a prerequisite for developing a
vibrant banking system. Over the last decade technology has transformed the landscape of Indian banking. Implementation of core banking
platform has automated basic processes, enabled the movement to a single customer view and allowed for optimization of work across branch
and hub network. Core banking platform have also given banks a strong launch pad to offer digital channel capabilities — almost all banks
today are feverishly building out their online and mobile channel offerings. ATM deployments and technology-enabled business
correspondent (BC) network have allowed banks to service large parts of the Indian hinterland. Responding to Basel norms and a more
aggressive supervisory regime, banks have undertaken risk and compliance management system implementations. Information management
and analytics are in focus as banks have built out large data warehouses in an attempt to leverage their data assets to better understand, sell
and serve their customers. All this points to a flourishing industry, focused on technological innovation. However, while there has been
significant action, considerable amount remains to be done.

1.2 Most core banking programs have been focused on internal functioning with banks adopting a “lift and shift” approach to moving
processes rather than adopting a holistic business process reengineering paradigm. Internet and mobile banking enrolment and adoption across
many banks is significantly low. While the increase in the number of “no-frill” accounts opened is heartening, technology is yet to make a
dent in the lives of hundreds of millions of financially excluded Indians. Risk systems are still deployed in silos as banks work toward their
enterprise risk management agendas. Many data warehousing programs in the industry are floundering as banks struggle to move from
”consolidating information” to ”gleaning insight” from their information management investments. The next few years are critical as banks
focus on “sweating” their technology investments to increase their return on investment. The strategic use of technology to implement a
differentiated business model, a transformed customer experience and an optimized cost structure will separate the leaders from the laggards
in the industry.

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1.3 Customer services has come to occupy the centre stage of operations in the banking Industry in India . The banking system in India today
has perhaps the largest outreach for delivery of financial services and is also serving as an important conduit to support the growth
momentum. While the coverage has been expanding day by day , the quality and content of delivery of customer service has assumed new
dimensions. The period of last decade or so has seen growth in the banking sector with consequent increase in the volume of banking
transactions fully aided by the growth and innovations in the banking technology. The technological improvements in banking have also, to a
large extent, facilitated the banks in improving their level of customer service. In line with the same, the terms of reference for the Committee
included examining the possible methods of leveraging technology for better customer service with proper safeguards including legal aspects.
While a certain level of business process re-engineering (BPR) has been achieved, it was observed that considerable customer grievance
resulted on account of incomplete BPR.

1.4 Almost all the banks now work in a computerised environment with corebanking solution (which facilitates anywhere banking from the
earlier branch concept) is a common phenomenon. A large number of banks also offer banking on the telephone or internet or mobile
platforms (restricted facilities). Money transfer is an area that has been largely benefitted through technological developments.

2. Objective of the study :

A. To evaluate whether technological innovation and implementation has increased effectiveness of customer service, satisfaction, and
reduced costs in the banking sector of India.
B. To evaluate the implementation of new technologies in the Banking sector of India and its benefits
C. To assess how E-banking has improved the customer service and customer satisfaction in banking industry of India.
D. To analyze whether technological implementation or E-banking has reduced frauds or not
E. To identify the relationship between electronic banking and customer satisfaction in the Banking sector of India
3. Research Question :

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A.What extent technological innovation and E-banking has improved customers' service, reduced costs and minimize frauds ?
B.What is the effectiveness of electronic banking methods and relationship between electronic banking and customer satisfaction .
4. Motivation of the study Due to emergence of global economy, e-commerce and e-business have increasingly become a necessary
component of business strategy and a strong catalyst for economic development. The application of E-banking has been demonstrated as an
effectual of costs reduction , risk management and providing quick services to the customers. Now a day, E-banking services have already
ensured opportunities to reduce expenditures on physical structures. However, in some previous studies it has been showed that, E banking
helped banks and financial institutions to reduce costs, increase revenue, increase customer convenience (Halperin, 2001). It is really
significant to analyze the actual situation of customers' satisfaction in banking sector.

There are very few studies on the e-banking and customer service and satisfaction in India in respect to reducing costs and minimizing frauds
which have examine . Therefore, this research will get a great opportunity to analyze the situation and pros and cons of this sector. In
addition, technological innovation and its impact will be clearly assessed.

5. Research Methodology:

This research or study was carried out using multiple methodologies. The various methodologies that were adopted in carrying out this study
were:
 Review of existing literature , RBI master circulars on customer services , guidelines on improving customer protection norms and
RBI report of committee on customer services in banks.
 To suggest views and opinion to draft guidelines for continuous role of technology in improving customer services.
 To review the existing system of attending to customer service in banks - approach, attitude and fair treatment to customers from
retail, small and pensioners segment.
 To evaluate the existing system of grievance reddressal mechanism prevalent in banks, its structure and efficacy and recommend
measures for expeditious resolution of complaints.

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  The find opinions and views of customers for laying down a suitable time frame for disposal of complaints including last escalation
point within that time frame.
 The Research examine the possible methods of leveraging technology for better customer service with proper safeguards including
legal aspects in the light of increasing use of Internet and IT for bank products and services and recommend measures to enhance
consumer protection.
 Interviewed and visited customer care/call centres, discuss with cross section of banks and customers, interact with various fora
/associations concerned with customers etc., and visit places of necessity. Examine the international best practices in the area of
treating the customer fairly and suggest modifications thereof to suit Indian conditions.

 Collected secondary data on the various initiatives taken by the banks and various strategies adopted by the banks to improve
customer services.
 Collected primary data with the use of interview techniques using a structured questionnaire with seasoned and senior bankers
involved in improving customer services through advance banking technology. The questionnaire covered 10 major banks including public
sector banks, new generation private sector banks to get a perspective from different kinds of banks on successful achieving higher customer
satisfaction level .
 Use of Interview technique using a structured questionnaire with 50 bank customers including retail and corporate and taken feedback
for any further improvements or any difficulty being faced by them in operating E Banking Systems..
 Special Expert opinion Interview and questionnaire survey carried out with regulators RBI & LIC officials .
 Carried out Interview and questionnaire survey with RBI officials for the initiative taken by the Central Bank of the country.
 Analyzed the survey results and come out with set of recommendations to improve and increase the customer satisfaction in India.

Research Planning Approach/ overall research model Here the researcher has provided a complete planning for the research.

6 .Research Design:
 Sampling Design
 Primary and secondary Data collection

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 Structured Questionnaire
 Personal Interviews
 Data Analysis

2.
Section 2: Micro Research Report

Chapter 1: Introduction :

1.1 The study was about electronic banking and customer satisfaction. This chapter deals with the background, purpose , area , scope , time
scope and significance of the study.

1.2 Background of the Study Daniel (1999) defines electronic banking as the delivery of banks’ information and services by banks to
customers via different delivery platforms that can be used with different terminal devices such as a personal computer and a mobile
phone with browser or desktop software, telephone or digital television. According to Khan (2007), Internet (electronic) banking includes
the system that enables financial institution customers, individuals or businesses, access accounts, transact business, or obtain information
on financial products and services on public or private network including Internet. According to Saha and Zhao (2005), customer
satisfaction is defined as a collection of outcome of perception, evaluation and psychological reactions to the consumption experience
with a product/service.

1.3 Banking industry has traditionally operated in a relatively stable environment for decades. However, with the advent of Internet banking,
the industry is characterized by dramatically aggressive competition. The shift from traditional branch banking to Internet banking has meant
that new strategies to attract new customers and retain existing ones have become critical (Wong, 2005). Electronic Banking allows customers
to access banking services 24 hours a day, 7 days a week. Like ATMs, Electronic banking empowers customers to choose when and where

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they conduct their banking transactions. However, Electronic Banking innovations at Centenary Bank-Nateete Branch seem not to have
achieved its aims. Long Queues are still seen in the banking hall, bank customers still handle too much cash, and hardly do people talk about
the electronic banking products that are available. The long queues and huge crowds are highly devastating and discouraging most times,
especially when the weekend is near and recently on every alternate Monday after banks open second and fourth Saturday holiday off.. Most
times, these long queues are as a result of the breakdown of the computers used by the Bank tellers, sometimes it occurs as a result of the
Bank tellers absolving them from duty and passing the bulk to someone else. (Journal of Management and Sustainability Vol. 1, No. 1;
September 2010)

1.4 This raises a lot of questions: are customers really enjoying these Electronic Banking services? Are they satisfied with the Electronic
banking services and products? Is there any relationship between Electronic Banking and consumer satisfaction? How technology has
improved customer services for young as well as senior aged people /This study will proffer answers to these questions; the study will seek to
empirically examine the impact of Electronic Banking Service on improving customer services and customer satisfaction in Indian banking
industry.

1.5 Problem Statement : Despite the growing interest and importance of Electronic banking in many financial institutions in India , the
implementation of such innovations in banks has remained low, the adoption rates among clients and its usage has not brought significant
outputs in the way clients become happy with the services offered, and indeed extant literature indicates that despite such growing interest, no
significant studies that have focused on consumer adoption and more so, customer satisfaction (Katri, 2003; Gao and Owolabi, 2008). One of
the benefits banks derive from Electronic Banking in banking operations especially with respect to service delivery is improved efficiency
and effectiveness of their operations so that more transactions can be processed faster and most conveniently, which will undoubtedly impact
significantly on the overall performance of the banks. The customers on the other hand, stand to enjoy the benefit of quick service delivery,
reduced frequency of going to banks physically and reduced cash handling, which will give rise to higher volume of turnover. However, this
development seems not to have achieved its aims. Long Queues are still seen at the banking hall, bank customers still handle too much cash,
and hardly do people talk about the electronic banking products that are available .

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1.6 Purpose of the study : The purpose of the study was to find out the relationship that exists between electronic banking and customer
satisfaction in India which paves the way for the banks to introduce new innovative technology based products to match the needs and
improve customer services . With this objectives , banks always focus on reducing Costs and ensuing risk management .

1.7 Scope of the study : This documents the boundaries from which the study was limited for effective investigation.

1.8 Geographical scope The study was limited to Ten Bank Branches in Delhi ,NCR ( Noida , Gurgaon , Faridabad , Meerut ,Modi Nagar
and Ghaziabad ) .This was due to limited time, resources and logistical problems being faced by the researcher which could not allow him to
carry out the research in all the bank branches of Delhi NCR . Conducting the research in selected bank Branches with quite a good number of
clients enabled the researcher to get better outcomes of the research.

1.9 Time scope The study covered a period of four months, that is, from July 2015 to October 2015.

1.10 Content scope In content, the study focused on electronic banking technology based payment systems as the independent variable and
customer satisfaction as the dependent variable using Centenary Bank – Nateete Branch as a case study.

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Chapter 2: Customer Service Management

Winning strategies in the age of the digital customer Today, the cliché of the customer being king is no longer a catch phrase. In fact, what it
means for banks is offering each customer (or at least each micro segment) a set of services and products tailored to his or her needs. These
need not only depend on basic segmentation parameters such as demographic and psychographic data, but also on customers’ life stages, as is
depicted below

Winning Strategy 1 : Customer Segmentation and SCV

Winning Strategy 2 :Co create your offerings
Winning Strategy 3 : Key best practices : From CRM to Customer Expereince
Winning Strategy 4 : Use of Alternative Channel
Winning Strategy 5 : EEffective cross Sell and Upsell

Chapter 3: Banking on Technology

In 2012-13, Indian banks continued to transform their businesses by deploying technology-intensive solutions to
increase revenue, enhance customer experience, optimize cost structure and manage enterprise risk. While these
are fairly common themes among banks, there is a wide variation in the technology agendas and implementation
capability across different players of the banking industry

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Chapter 4: Cost Reduction & Risk Management

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Chapter 5: Summary of Main findings and Recommendations
Main findings:

Chapter 6: Analysis and Results of Survey Questionnaire:

Chapter 7: Conclusion:

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