Monday, February 12, 2007

How IT enabling a business can make it worse



Banks have various types of accounts. In India, Recurring Deposit (aka, RD) is a popular means of saving every month. It's not as attractive as stocks, mutual funds or Systematic Investment Plans, but it is one of the safest and regular means of saving (as long as the credit rate of the bank is good).



Bank of Baroda, where I have an account has a special type of RD scheme. With an normal RD scheme, you can only save a fixed amount every month. For instance, if your installment is Rs. x at the time of opening an account, it should always be Rs. x, nothing more, nothing less. But the uniqueness of this special account is, you can deposit anything equal to or more than the minimum installment (of course, there is an upper limit, but that is very high).

I found this scheme very attractive, because my expenses vary every month and I can't really predict how much I can save. So, I jumped to the sky and opened a "special" RD account for the minimum installment of Rs. 6000.

For quite a few months, I was happily depositing Rs. 6000, Rs. 8000 and even Rs. 10000. So far, so good.

One fine day, when I attempted to pay Rs. 8000 as the installment, I was stopped by the teller. She told me that I would have to pay in multiples of Rs. 6000 only. I was surprised and showed her all my past receipts paying various amounts. Know what her response was?

It could have been like that in the past, but not any longer.

Me: But why wasn't there a notification to me, either through mail or phone?

She: I don't know about that, but that is the policy now.

Me: (wanted to probe a little) Can you tell me the real reason of why it changed now?

She: Sir, we have deployed a new Core Banking Solution called ******* and it does not allow paying different amounts. Even if we allowed it, we will end up doing a lot of calculations and that means a lot of trouble for us.
(Funny, I thought doing a lot of calculations was bankers' bread and better)

Me: Okay, please allow me to pay Rs. 8000 this time only. From next month you can enforce the new policy.

She: Sorry Sir, nothing can be done about that, you got to comply to what our IT system dictates (She started sounding very rude here and raised her voice), there is no way that our IT system can be modified.

I would not budge. I ran from pillar to post to prove my point (talked to her boss, talked to his boss). I explained to them how it will make things very difficult for me and I'll be forced to save either too less or too much every month. But instead of listening to me, everyone was trying to educate me on how to go with the bank's dramatic policy changes without complaints!

Finally I asked why the branch can't push the management to abolish this scheme as soon as they can (so the customers will not mistakenly believe that they still have a special RD account) or force the IT vendor to make provisions of the special scheme. Since they have implemented the IT solution in hundreds of branches and presumably paid a lot of money, I didn't think it is difficult for them to raise the red flag with the vendor. The response was simple: Sorry sir, we are powerless to even escalate this to our management. Already we have lost many customers, please don't publicize this.

Later, I was analyzing the key issues the bank has (discounting the rude behavior of the staff):

1. The bank may have posh interiors and state-of-the-art Core Banking Solution. However, there is no CRM or formal feedback system in place.

2. I'm not sure if the branch staff are taking the issues to upper management. Even if they do, I'm not too sure if they are taken seriously. In my case, the best response could be to ring up a higher official (maybe sitting in the head office), escalate this and ask how to handle this case. The next best response could be to just give me a piece of paper to vent off my anger and then promptly send it to the head office. While this may not have changed anything on their side, it would have at least pacified me that I'm heard.

Now you can guess if I'll ever do anymore business with this bank!


Friday, February 02, 2007

How IT Enabling a Business can make it better

In India, customer service is often overlooked, especially when the customer is a consumer (individual) rather than a corporate entity. This story is about a bank in India, which recently made me rejoice because of its IT systems.



Indian Bank is a public sector bank in India. A decade ago, almost all national banks in India looked like Government Offices. People living in India will not find it difficult to visualize the scene. The bank would typically operate in an old building, with long hanging fans; people crunching numbers between piles of paper; common man waiting for their service forever. However, it is all changed now and many banks are IT enabled, at least in cities. Indian Bank is no different.

My requirement: Send money to someone who got an account in the same bank but in another town. So, I visited a local branch in Bangalore.

The first appearance of the bank made me wonder if it was a private bank. The ambience was pretty good.

The moment I entered, there was a machine which gave me a token on pressing a button. It had a serial number. I had to simply wait for my turn whch would be announced by a voice and show up in a LED display along with the counter number. The way they have integrated this machine with their workload and the way they juggle the counter numbers based on the traffic is amazing for a national bank!

The story does not end here. Usually if we want to send cash to someone in another part of India, we typically get a Demand Draft (DD) from the bank in the recipient's name, seal it in an envelope and send it across using courier/mail. As such, getting a DD is not difficult, but you have to pay a hefty commission and also do some effort to send it yourself. But, now it is all easy, thanks to a Core Banking Solution deployed by these people. All I needed was the recipient's core banking number and the money was instantly credited to the recipient's account. No commission, no need to send it through (snail) mail and no delay.

Total time to send money: 20 mins. Life has been definitely made easier!

Do you have a story where you got good service or saved time because a business was IT enabled?


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