When Wal-Mart Founder Sam Walton said “the goal as a company is to have customer service that is not just the best but legendary,” he stated the golden rule of running a profitmaking business in a highly competitive scenario. In the globalised world, competition is just a click away for the consumers and has changed the way companies have functioned so far. Of course, it has been particularly challenging for the Public Sector Undertakings (PSUs) to deal with this transformation. Since these government owned entities had followed the principles of bureaucratic administration from the time of independence when they were set up to further economic development, liberalisation in 1991 struck them hard.
Privatisation gave birth to a volatile market brimming with cut-throat struggle as consumers became aware of better quality and services especially in banking, health care and aviation sectors. Intensifying demands, archaic products, lack of human resource and poor facilities led to the downfall of these public corporations with huge losses in market share. The worst hit were definitely the public sector banks (PSBs) as advanced technology and customer relationship management (CRM) driven private banks started ruling the roost in the post-liberalisation era. In the wake of the plummeting public banking sector, the government set up the Narsimham Committee (1991) that recommended focusing on enhancing the quality of customer relations and improving transparency along with instituting the Banking Ombudsman Scheme and Customer Protection Act.
This paradigm shift required expanding the customer base through increased efficiency, financial inclusion, innovation and CRM. However, the main challenge was enticing the high net worth individual (HNWI), who had also evolved with the changing times. Being serviced at a bank was now considered a right by HNWIs rather than getting something extra while carrying out the financial operations. They became more analytical and comparative in terms of products and would settle for nothing but the best in each segment of transaction or savings. Thus, major PSBs in the country underwent a modification process to remodel themselves as a people-oriented organisation to stay ahead of the private players.
Tailoring products as per customer expectations and recent progressive technology like ATMs, phone banking, internet banking along with expansion to remote areas of the country and a performance propelled working environment have all contributed to the growth of PSBs in the current times. One such revolutionary example is Punjab National Bank’s ‘Pragati’ initiative that aims at preferential treatment to loyal and prospective customers at each level of banking through modernisation, answerability, governance, better infrastructure, incentive etc.
Another important aspect of this transformation among the public sector banks involved increasing the number of branches and improving the quality of staff to develop more and more touch points and maintain a healthy relationship. This led to the much required product differentiation and market segmentation for easy identification and gratification of individual needs. Since personal interaction is the most significant characteristic of service sector, PSBs have realised its prominence and are now building new ways of enhancing customer experience.
In addition, data warehouses due to computerisation have also helped in offering superior financial planning and wealth management related services to consumers. Special relationship managers have been appointed to adhere to the grievances and streamline the processes, making banking effortless for the customers. Apart from upgrading, PSBs have also been effectively communicating about their products and services through various multi-media channels for widespread awareness and engagement. Consequently, the stature of PSBs has seen a meteoric rise in the past few years, gaining an edge over the private entrants, by changing the outlook towards customer satisfaction. Similarly equipped with contemporary information technology architecture, impeccable services, trained staff, customisation policies and customer-friendly approach, other government controlled enterprises are now making their presence felt and will continue to grow in the future.
Privatisation gave birth to a volatile market brimming with cut-throat struggle as consumers became aware of better quality and services especially in banking, health care and aviation sectors. Intensifying demands, archaic products, lack of human resource and poor facilities led to the downfall of these public corporations with huge losses in market share. The worst hit were definitely the public sector banks (PSBs) as advanced technology and customer relationship management (CRM) driven private banks started ruling the roost in the post-liberalisation era. In the wake of the plummeting public banking sector, the government set up the Narsimham Committee (1991) that recommended focusing on enhancing the quality of customer relations and improving transparency along with instituting the Banking Ombudsman Scheme and Customer Protection Act.
This paradigm shift required expanding the customer base through increased efficiency, financial inclusion, innovation and CRM. However, the main challenge was enticing the high net worth individual (HNWI), who had also evolved with the changing times. Being serviced at a bank was now considered a right by HNWIs rather than getting something extra while carrying out the financial operations. They became more analytical and comparative in terms of products and would settle for nothing but the best in each segment of transaction or savings. Thus, major PSBs in the country underwent a modification process to remodel themselves as a people-oriented organisation to stay ahead of the private players.
Tailoring products as per customer expectations and recent progressive technology like ATMs, phone banking, internet banking along with expansion to remote areas of the country and a performance propelled working environment have all contributed to the growth of PSBs in the current times. One such revolutionary example is Punjab National Bank’s ‘Pragati’ initiative that aims at preferential treatment to loyal and prospective customers at each level of banking through modernisation, answerability, governance, better infrastructure, incentive etc.
Another important aspect of this transformation among the public sector banks involved increasing the number of branches and improving the quality of staff to develop more and more touch points and maintain a healthy relationship. This led to the much required product differentiation and market segmentation for easy identification and gratification of individual needs. Since personal interaction is the most significant characteristic of service sector, PSBs have realised its prominence and are now building new ways of enhancing customer experience.
In addition, data warehouses due to computerisation have also helped in offering superior financial planning and wealth management related services to consumers. Special relationship managers have been appointed to adhere to the grievances and streamline the processes, making banking effortless for the customers. Apart from upgrading, PSBs have also been effectively communicating about their products and services through various multi-media channels for widespread awareness and engagement. Consequently, the stature of PSBs has seen a meteoric rise in the past few years, gaining an edge over the private entrants, by changing the outlook towards customer satisfaction. Similarly equipped with contemporary information technology architecture, impeccable services, trained staff, customisation policies and customer-friendly approach, other government controlled enterprises are now making their presence felt and will continue to grow in the future.
