“To me, this seems very odd for a sector which prides itself on being a service industry,” Rao said at an industry event on Thursday. “We definitely wish to see more serious thought and intent emerging from the boards and top executives on quality of grievance redressal instead of just monitoring TAT (turnaround time) on complaints.”
Emphasising the need to protect customers by giving them efficient, prompt, and cost-effective grievance redressal mechanisms, Rao said the efforts of banks to provide timely solutions had not kept pace with the explosion in technology and products.
Another area that the central banker stressed upon is introducing greater empathy in bank services, products, and operations. In particular, Rao spoke about the need for banks to make more efforts to provide safe and friendly technology-based banking for senior citizens.
“Banks must require their employees to treat senior citizens, people with special needs, those that are technologically challenged, or someone who may need help otherwise with special care and empathy,” he said.
Rao called upon banks’ boards to ensure that access points such as branches, websites and apps are user-friendly and convenient for those with special needs.
“From the regulatory side, we are taking up these subjects more vigorously in our interaction with the industry but there is also a need for a cultural and attitudinal change within the fraternity that I would like to emphasise,” he said.Amid new types of risks that customers are faced with, Rao said banks must focus on strengthening cyber security and curbing frauds in the hyper-personalised and technology-based banking environment.
He flagged increasing cases of fraud and data breaches, pointing out that customers faced threats from fraudulent apps, breach of privacy and deep fakes.
“Even mis-selling has emerged in a digital avatar now – called dark patterns. Dark patterns are design interfaces and tactics used to trick users into desired behaviour such as availing high-cost short-term consumer credit masquerading as an instant loan,” he said.
As rapid technological developments disrupt traditional banking activities, both the RBI and lenders would need to refocus priorities from a risk management perspective, Rao said.
The central bank may need to take another look at risk management frameworks, especially for liquidity and market risk.
“From the bank’s side, active monitoring of deposit concentration and diversification of funding sources may become even more important,” he said.