Bank employees and unions will have to recharge themselves to a new set of objectives that would enhance the business of banks on one side and help the society on the other
May Day is usually the day to recall the assertion of their rights. For a change, the All India Bank Employees Association (AIBEA) during this 70th year thought of taking the initiative of enjoining social responsibility. Gone are the hard days of militant agitations as means to achieve fair compensation, safety, security and comfort in work places. Workmen and officer representatives are today part of the governance and management of banks. Machines dictate the employees’ ways of working. Discretion has less relevance now than in the past. Technology dictates the employees’ ways of working and management processes. But are the customers, a happier lot? The response is discouraging.
Ever since the introduction of banking reforms following the recommendations of Narasimham Committee 1 and 2 and the alignment with the global regulatory architecture through BASEL I, 2 and 3, technology and capital adequacy have become the prime drivers of growth in banking sector.
Mobile banking and micro finance institutions (MFIs) moved into the space left by the RRBs, weakened cooperatives, and rural branches of commercial banks. Banking correspondents and customer service points, White ATMs surfaced. Who should we blame for providing this space excepting the lack of commitment and motivation of staff to align with the objectives of the nationalisation of banks?
Several progressive regulatory measures from the RBI – asset reconstruction companies, payments and settlement solutions, safe mobile banking and revisiting the priority sector definitions have all happened during this period.
Success of social banking is a function of trust and banking with a human face. Banks’ business is growing exponentially. Globally inclusive banking has become a great concern. Several economies – with developed nations being no exception – are devising ways to make possible access to banking easy, convenient and cheap. Digital architecture is reshaping the way of banking of the future.
Seamless integration with the mobile phones, emails, messages between the banks and customers benefits the banks more than the customers. Massive data is going to be captured through cloud technology. Cyber security is going to be an issue that would haunt the banks continuously. There is a huge opportunity for banks to innovate in this space.
“Being able to take advantage of, or react to, the digital revolution requires banks to behave in ways that they are not quite accustomed to. It requires extremely clear and quick cross-functional collaboration.” Says McKinsey in its November 2014 Report.
The demographic profile of bank customers will also undergo sea change. Senior citizens are likely to constitute 20% of population by 2025, demanding far different services from the bank than the present. The youth, that constitute 40% of population, used to working on active social media like the Facebook, Twitter and the like, wanting speed and accuracy of transactions and women demanding different products to suit their multiple chores at family and work.
HM Khan, Deputy Governor of RBI, while inaugurating a Dena Bank’s Self-Service Branch bank exhorted very rightly; “The focus has been on alternative channels and digitisation of banking and move (banking) from assisted to self-service mode… But the fact remains in the Indian context that despite us moving in the Jet-plane age, we have the bullock cart as well. We have different market segments and have to look at the hand behind the machine as well….” He called for handholding of older generation on-branch customers and the new entrants through ‘a blend of software with human touch’.
Managements would be hence forward busy in formulating strategic initiatives to withstand the competition both from domestic and global financial institutions (the presence of global financial institutions on Indian landscape has been doubling up), coping with regulatory compliances, evolving new products and measures to mitigate product and process risks continuously. In other words, managements would focus on risk management and compliance. Risk management should be viewed as a window of opportunity for greater earnings and greater profits than as cost centre.
Most of the members of the staff, unlike in the past, are comfortably placed in the work environment. They have negotiated settlements on wages, salaries and perks; they do not have to slog for balancing their daybooks or ledgers. They are the face of the bank. This is precisely the reason for the employees to be socially sensitive.
In the absence of any substantive relationship issues with the managements now, the unions should devote their time in house for service to the customer far more friendly than now. It is time to give back to the society. The employees have to relocate and recharge themselves to a new set of objectives that would enhance the business of the banks on one side and help better reach to the society on the other.
Social banking has to be responsible and responsive to small and marginal farmers, leaseholders, micro and small enterprises, small retail shop owners, economically weaker sections and women in bottom-of-pyramid that require more than banking to succeed in the enterprise they pursue and they look to the banks to help them in that direction. Field visits help the employees to understand the farmer and entrepreneur. The documents tell only ownership story and not the story of his production and marketing.
Mutual understanding builds trust and trust begets trust. Banking in India is built on the Scottish principle of ‘suspect and respect’ and not the reverse. The reversal has to be engineered only through a change in the mindset and cultural shift in understanding the requirements of the 25% of the country that are still poor. The bourgeoning middle class and the elitist can always be cultured into technology and internet banking.
Employees have more leisure than most of their predecessors of yesteryears and fewer responsibilities on the home front as well because of nuclear families. If a group of employees can volunteer to adopt a village, visit at least for two days in a month in a picnic mode, enhance the customers’ knowledge of bank and its deposit and loan products, prepare at least one bankable project once in a quarter, 15 lakh viable projects with loyal customer base would turn banking an experience worth the life. This in essence will be the responsible and responsive social banking.
(Dr Yerram Raju Behara is a former senior executive of SBI and an economist and risk management specialist. The views expressed in the article are his personal.