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The BIBM (Bangladesh Institute of Bank Management) has recently released a report based on a survey research titled "The Banking Industry in the country has failed to meet expectation of customers". In the report, it opined that service quality in the country's banking sector has deteriorated. However, to what extent this research report reflects the true picture is something the experts, bankers and customers can tell. Inference has been drawn in the report on the basis of a survey conducted on only 620 randomly selected customers by applying two premises, viz. customer complaints and the number of accounts closed. The survey participants would not onstitute even a fraction of the total customers availing the banking services. Moreover, lodging complaints and closure of bank accounts are not proper indicators of customer service, as the former is the result of disputes arising between the banker and customer while the latter is the impact of many normal business activities.
Dispute between the customers and the bankers is a very common phenomenon found not only in Bangladesh, but also in the developed world. The number of complaints mentioned in the research report is simply peanuts compared to the number of complaints lodged in the banks of developed countries. The number of complaints filed in the latter countries is so enormous that the banks have established separate large departments to address the phenomenon. Banks have to act on proper documents, because their service is directly related to money. So, banks cannot execute any transaction, nor can they provide any service if supporting documents are not submitted accurately.
Our experience shows that quite a good number of customers often submit improper documents, but demand to get the transactions done. In most of the cases, the banker tries to accommodate the customer's request. However, sometimes the situation is beyond their capacity, as deficiency in documentation is so substantive that the bankers cannot ignore it. As a result, the customer does not get desired service, which causes frustration and in many causes he lodges complaint against the banker. Similarly, some customers' accounts are closed for various reasons.
Account remaining inactive without any balance for long is automatically closed by the system. Account opened for some specific need is closed after the fulfillment of that need. Sometimes existing account is closed to open a new account. Besides, many customers close their account in one bank for some reasons and establish clientele relationship with another. Moreover revealing number of accounts closed without mentioning the number of new accounts opened does not give a clear picture. In fact, the number of complaints lodged by the customer against a bank and the number of accounts closed have no direct relations with customer services in the banking industry.
PARAMETER FOR MEASURING CUSTOMER SERVICES: Customer service is always measured based on some widely accepted parameters, which, among others, include the time taken per transaction, convenience of transaction place, caring for the customers while in the queue for service, innovation of service, improvement of service, alternative solution etc. If the time taken for cash withdrawal from bank counter is now shorter than earlier times, then it can be said that banking service has improved. For instance, on an average, one customer used to wait 15 minutes to draw money from the bank counter in earlier times, whereas waiting time is now 10 minutes for this purpose. This situation indicates service improvement, but if the opposite happens then the service quality has deteriorated. Similarly, if the customers' commuting inconvenience is minimised to some extent by offering alternative means of transaction, then the service quality is deemed to have improved. If a bank closes online submission of customers' request due to security threat, then the bank's services may be termed as deterioration. When rush hour transactions are especially taken care of and alternative solutions are offered by the bankers, then it can be said that service standard has improved. These parameters of banking products indicate the standard of banking services. Unfortunately, BIBM has not taken these widely accepted common indicators into consideration while drawing inferences in the research study. As a result, the much discussed subject has remained unaddressed because we do not know where the level of our banking services stand, although banking has developed tremendously during the last two decades.
BANKING SERVICES: Although there is no widely accepted yardstick to measure the service quality of banking products, yet customer perception suggests that the service standard in our banking industry has not improved commensurate with the growth of the whole industry. However, there are obvious reasons behind it. With the blessings of technology, the volume of transaction has increased manifold; customer's expectation has also risen, but traditional document-based banking practice is still in vogue. For example, the discrepancy in customers' signature is the common reason behind refusing payment by the banker against any cheque, and this causes frustration to the customers. But the banker's hand is tied here as the cheque cannot be honoured if the customer signature is not identical with the specimen signature submitted while opening the account.
Now-a-days, the use of cheque has almost disappeared as the use of customer's bank card with PIN (Personal Identification Number) is very popular for undertaking banking transactions. In fact, bank card with PIN has replaced the use of cheque in banking transactions, which has eventually removed the common dispute over signature discrepancy. Nonetheless, the service quality in bank's retail banking department is much better than that of credit and international trade (Import & Export) departments. Retail banking includes opening of accounts, cash transactions, remittances, FDR (Fixed Deposit Receipts), Draft/Pay-order purchases. Here service standard is usually satisfactory as the transactions are mostly simple, quick, customer-focused, directly addressed by the bankers. Consequently, customer complaint in this area is very negligible.
On the other hand, in two other important banking departments which deal with products and services, transactions are more complex, risky and document-based. These are in general time-consuming, as many domestic and international rules and regulations are meticulously complied with prior to providing this kind of services. Experience shows that in many cases customers are not well-prepared while submitting documents properly, which results in delays or rejection of the services. Establishing standardised credit operations and centralised international trade-finance services can substantially improve the service quality in these two core areas of banking business. Unfortunately, Bangladesh's banking industry is still far from establishing standard procedures, and therefore customer dissatisfaction in this area of banking business is not coming down.
IMPROVING THE QUALITY OF BANKING SERVICES: Banking is a completely service-oriented industry, and this service is rendered by the officers who are required to have extensive training based on practical banking and good mentoring from senior bankers. Needless to say, the quality of service depends on the person who is responsible for providing it, because human traits are unique and varies from person to person. People with negative mentality will not be able to provide expeditious and quality services, but people with positive attitude will be able to do that. Moreover, the banker has to be well conversant with the products and services as well as all relevant rules and regulations. Besides, they must have good decision-making ability.
Bankers must be prepared to provide expeditious quality services to the customers. Otherwise, customer satisfaction cannot be maintained. The bankers should focus on this area, because banking is a service industry. If the service quality is not maintained properly, the institutional growth may be affected at a certain point. At the same time, professional bodies like BIBM should be more objective, accurate and exercise utmost prudence while releasing any study report or research result. This is because this kind of inputs from professional bodies has great impact on the industry.
Nironjan Roy, CPA CMA, is a banker living in Toronto, Canada.