The RBI on Thursday said that the banks should focus on strengthening cyber security and prevention of cyber frauds to protect their customers from increasing incidents of fraud and data breaches.
RBI Deputy Governor Rajeshwar Rao, in his address at the FIBAC 2023 conference, on Thursday said the banking landscape is rapidly evolving with an increase in financial inclusion, customer access, product choices and convenience.
“However, the risks for the consumer have also increased with increasing cases of fraud and data breaches,” he said.
He said that bank customers today face a threat of technology-induced frauds such as fraudulent programs, breach of privacy and deep counterfeiting.
“Even mis-selling has appeared in a digital avatar now – called Dark Patterns. Dark patterns are design interfaces and tactics used to trick users into desired behavior such as high-cost short-term consumer credit masquerading as an instant loan. We must. work hard, work smart and work together to protect customers against these threats to retain and strengthen their confidence,” said Rao.
He said a key element of protecting customers is to provide them with an efficient, speedy and cost-effective complaint mechanism.
“Unfortunately, it appears that the banks’ efforts to provide timely solutions to customer complaints have not kept pace with the explosion in technology and products.”
“While banks are hugely invested in forging new and innovative ways of customer acquisition, very little thought seems to go into improving customer complaint redressal mechanisms,” he said.
“This seems very strange for a sector that prides itself on being a service industry. We certainly wish to see more serious thought and intention coming out of the Boards and top executives on quality of complaint compensation instead of just monitoring TAT and MIS on complaints,” Rao said .
He also emphasized the need for banks to bring greater empathy into their services, products and operations.
“For example, a greater effort is needed to provide safe and friendly technical banking to the elderly. Banks must require their employees to treat the elderly, people with special needs, those who are technologically challenged or someone who may need help otherwise. with special care and empathy. ,” said Rao.
He said that the managements should ensure that their access points – branches, websites and applications are user-friendly and convenient for the customers with special needs.
“On the regulatory side, we are addressing these issues more vigorously in our interaction with the industry, but there is also a need for a cultural and attitudinal change within the fraternity, which I would like to emphasize,” said Rao.
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