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special featureSignificance of Customer Service in BanksCustomer Services has great significance in the bankingindustry. The banking system in India today has perhapsthe largest outreach for delivery of financial services andis also serving as an important conduit of financialintermediation. While the coverage has been expandingday by day, the quality and content of dispensation ofcustomer service also have been getting aligned to theexpectations of the customers.The vast network of branches spread over the entirecountry with millions of customers, a complex varietyof products and services offered, the varied institutionalframework - all these add to the enormity and complexity ofbanking operations in India giving umpteen opportunitiesto banks to make constant improvement in the services.Any initiative for betterment of service needs a thoroughunderstanding of the customer perceptions, their needsand changing aptitude of consumers. Such efforts ofbanks are evidenced by a series of studies conductedby various committees such as the Talwar Committee,Goiporia Committee, Tarapore Committee, etc. to bring inimprovement in performance and procedure involved inthe delivery of hassle-free improved customer service.In the whole process of improving customer service,the efforts of banks were adequately supplementedby the Reserve Bank, as the regulator of the bankingsector. It has been actively guiding, supporting andis actively engaged from the very beginning in thereview, examination and evaluation of customer servicein banks. It has constantly brought into sharp focus theneed for quality and introduced framework to ensure thatbanking services are available to common people.It also stressed the need to benchmark the current levelof service, review the progress periodically, enhance thetimeliness and quality, rationalize the processes bytaking into account technological developments andsuggest appropriate incentives to facilitate change on anongoing basis through its directives.Thus, the role of Reserve Bank of India has been criticalcatalyst in improving customer service in banks. Thus,depositors' interest forms the focal point in evolvingpolicies for better customer service in Banks.Impact of Competition on Customer Service in BanksWe have seen that reforms in the banking sectorover the last eighteen years have gradually heightenedcompetition in banks. Improvement in the quality ofcustomer service received top most priority and emergedas the key business differentiator to compete. Rightfrom customization of products to suit the customerappetite, expansion of range of products / services, wideruse of technology to make banking more accessible atcustomer's call, right up to the minute customer needshave received bank's attention. The rigorous homeworkof banks to improve the face of banking is visible in thebank branches. The transformation in the approach andattitude of the employees towards customers is evident.PSBs too, fast changed their service delivery model /style to compete with their private peers.Factors influencing the Customer ServiceHuman ResourcesAny organization's success or failure is the result ofsuccess or failure of its employees collectively. Here theemployee doesn't mean only the staff working down theladder, but also includes people right up to the top.Humans may be assisted by the technology for arriving atthe decisions.Products / ServicesThe products which a bank offers are mostly financialproducts like deposits, advances and along with theseproducts also provide other services which are not financialin nature, like safe deposit vaults, locker facilities etc.The flexibility of banks to adopt changing needs andexpectation of customers and bring out products / servicesto suit customers is an important area in banking services.ProcessesThe processes devised for getting the services should bevery customer friendly, easy to understand and complete.Delivery channelsCustomer satisfaction is also dependent upon the deliverychannels used by banks in providing the services. Today'scustomer wants effortless, efficient, secure, simple anddependable channels of delivery, whether it is throughhumans or technology driven channels.22October - December 2011The Journal of Indian Institute of Banking & Finance