The Indian banking system successfully faced the global economic downturn since the last decade and has been taking considerable commendable steps to improve the banking experience in India. The Indian Banking system is generally well regarded globally and there is a mature & respected regulator (RBI) with a good mix of banking spread & competition between a number of public, private & foreign banks in operation. But there is always considerable discussion & on-going debate on financial inclusion and population coverage of banking products & services, quality of banking services delivered etc.

Today India wants to fasten its economic development .And this needs strengthening of the backbone of the economy – i.e. the banking & financing eco-system. The economic growth is important to achieve our growth trajectory for inclusive development across regions and population with enhanced Customer Satisfaction.

And there are varying degrees of perception, across sectors and consumers of the efficiency, efficacy & customer centricity of different banks.

On customer service, RBI’s approach focuses on driving protection of consumer rights and enhancing the quality of customer education, service and grievance redressal. However even a cursory scan of customer feedback & compliant forums indicate that there is opportunity to improve service levels being delivered on the ground in many banks.

The total number of banks in India is fairly large at 157 - of which 26 public sector, 20 private sector and 43 foreign banks - together have a market share of over 90% of the banking assets (although about 82% of the branches are from the public sector banks).

As per the World Bank financial inclusiveness ranking data - Banking penetration is about 53% in India (i.e. from population of 15 years and above) – against a global average of 62% and with developed countries having a penetration rate in the 90%+ range.

So should we add more banks/branches, or focus on improving the service levels of Banks in India?

While the right answer is most likely “both”, the view being expressed is that it is necessary to measure and objectively benchmark the product & service quality being delivered to customers. 

And to establish this with unambiguous clarity and set a baseline for improvement, we should measure banking sector’s effectiveness (as seen by customers) objectively & independently.

Is this possible?

Yes, this is already being done for several years in several countries like Singapore, US, UK, Sweden, Canada.

 Customer satisfaction which is now an established body of measurement science and there are a few citizen satisfaction measurement & benchmarking methodologies in use.

-       One established methodology is the American Customer Satisfaction Index (ACSI), a globally respected Customer Satisfaction measurement & benchmarking Index, with presence in more than dozen countries around the world.


-       In US, Sweden and Singapore and few other countries have been using the ACSI methodologies to measure customer & user satisfaction with private and public sector organisations.

Measuring end users’ satisfaction with banks is being done in India as well.

-       Using the science based methodology, the feedback obtained directly from customers (sampled randomly) is evaluated statistically & analysed.

-       Customer experiences and the Customer Satisfaction with banks will be benchmarked using science based econometric modelling.

-       Indian Customer Satisfaction Index will have quantitative indexing of Customer Satisfaction scores on the outputs (service) received from the banks. And benchmarked with peers & across sectors/nations.

-       Measuring Customer Satisfaction will enable bank management, policy makers and managers to better understand their customer’s expectations, helping to identify sub‑groups of users, their needs and expectation gaps.

-       Customer Satisfaction analysis will help banking organisation to identify specific elements of product & service delivery to drive satisfaction. Work on strategy to enhance Customer experience. And identify the actionable which priority for greatest impact on Customer Satisfaction, as well as monitor the impact of reforms on end-users.

-       Customer Satisfaction is an important outcome indicator of overall bank performance.

Measuring (objectively & independently) and publishing the banking benchmarking scores will be transformational for Indian Banking industry to improve product/services using Customer Satisfaction. And not just publish the satisfaction scores, to drive competitiveness to improve, but also provide them diagnostics on what specifically to improve to enhance their scores.

This will not just improve the operation & utilisation of India’s existing banking infrastructure, but also improve end customer satisfaction.