INTRODUCTION

Today every business organizations are facing tough competition here no exemption for
financial services or Banking industries. Customer service is an integral part of any
organization it is necessary to identify the key success factors in terms of customer
satisfaction. To develop and to sustain business any of the banks must have quality of
customer service that can link up cordial relation with the customer and result in to the
satisfaction level of the customer.
After liberalization, privatization and globalization (LPG) policy enactment, Indian banking
industry has undergone tremendous qualitative changes. International banks are coming to
market, which are competing with local banks irrespective with that they are private sector
banks or public sector banks. Various banks are available with new offers, schemes, and
services with wide range of products. Customer has range of choices where proper
information can be gathered at cheap cost and can take the advantage of such
competitiveness. In the era of globalization customer has more rights to choose right product
according their profile, opportunities available for their money.
Public Sector Banks
Public Sector Banks refer to the financial institutions which have over 50% of their
shareholdings held by the state government. Usually, the banks appear in the stock exchange.
They are the financial backbone of a country, such that they contribute to the nation’s
financial security. Despite slightly higher interest rates, once you keep your money in the
governmental banks’ fixed accounts, you are sure of funds security. There is almost zero
chance of such institutions to default on customer’s finances. In cases where the
banks experience financial constraints, the government tends to cover them up. In the Indian
Banking System, PSB’s are the largest category of banks and emanated before independence.
Over 70% of the market share in the Indian Banking sector is dominated by the public sector
banks. These banks are broadly classified into two groups, i.e. Nationalised Bank and State
Bank and its associates. There are 27 public sector banks in India, which differ in their size.
Of these, there are total 19 nationalised banks in India, while 8 State Bank of India
Associates. Almost all PSB’s share same business model, organisational structure and human
resource policies. Hence, competition can be seen among these banks, in the market segment
they cater.

Private Sector Banks

The banks in this category have a larger part of their equity contained by private
shareholders, rather than the government. These banks have individuals or private
institutions, holding more than 50% of the shares. Some private banks may default on
customer finances. It happens mainly on fixed deposits. Others may shut down their entire
operations abruptly, and lose track with their customers. In such instances, customers may
lose their savings. These institutions typically adopt aggressive customer strategies, targeted
towards ultimate customer satisfaction. They mostly aim at quality service delivery, within
the shortest possible time. Employees will always promote high-end items and services to a
greater geographical and target audience. After the majority of the banks were nationalised in
two tranches, the non-nationalised banks, known as Old Generation Private Sector Banks,
continued to operate. Furthermore, when India's liberalisation policy was formulated, the
banks that received a licence, such as HDFC Bank, ICICI Bank, Axis Bank, and others, were
referred to as New Generation Private Sector Banks. Following liberalisation, the banking
sector in India has seen a significant transformation as a result of the establishment of private
sector banks, whose presence has been steadily growing and which now offer a varied range
of products and services to their consumers. They put a lot of pressure on the economy.
The Most Significant Differences Between Public and Private Sector Banks
The following points clarify the distinctions between public and private sector banks:
Public sector banks are those in which the government owns the majority of the stock. Private
sector banks, on the other hand, are the ones with the most individual and institutional
shareholders.
In India, there are currently 27 public sector banks, 22 private sector banks, and four local
area private banks.
Public sector banks have a total market share of 72.9 percent in the Indian banking system,
followed by private sector banks with 19.7 percent.
Because public sector banks have been around for a long time and private sector banks have
only been around for a few decades, public sector banks have a larger customer base than
private sector banks.
The public sector exemplifies transparency when it comes to interest rate decisions. Public
sector banks give slightly greater interest rates on deposits to its customers than private sector
banks.
When it comes to staff promotions, public sector banks use seniority as a starting point. In
contrast, private sector banks promote people based on merit.
Growth potential in public sector banks are extremely limited when compared to private
sector banks.
In a public sector bank, job security is always present, but in a private sector bank, job
security is only there when performance is good, because performance is everything in the
private sector.
Aside from employment stability, another advantage of working for a public sector bank is
the after-retirement benefit, or pension. Private sector banks, on the other hand, do not offer
pension plans to their employees. The bank, on the other hand, provides other retirement
perks such as gratuity and so on.

What is Customer Service in Banking Sector?

In banking, one of the most important methods to keep consumers coming back is to provide
excellent customer service. It entails thoroughly and promptly responding to customers'
inquiries and complaints, as well as connecting with consumers via face-to-face meetings,
telephone, mail, fax, and email. Most, if not all, bank personnel are involved in customer care
in some way.
According to Washburn Financial Service, banks are being forced to become more customer-
focused as a result of growing competition. The cost of acquiring new consumers is higher
than the cost of keeping existing customers. In order to keep consumers, bank customer care
representatives must deliver speedy, error-free, and convenient service.
For many consumers, bank tellers are their initial point of contact. Tellers that are polite,
swift, and knowledgeable are a valuable asset in providing excellent customer service in the
banking industry. Many clients depend their decision on the personalities and skills of bank
tellers when deciding whether or not to perform their banking with a particular organisation.
For bank tellers, on-the-job training is frequently provided, with a focus on customer service
skills.
Consumer service personnel in call centres are employed by many banks, particularly large
banks, to be the first point of contact for customer inquiries. Representatives at call centres
may be tasked with resolving issues or directing calls to specialists inside the banking
organisation. Representatives in call centres should have excellent communication, listening,
and problem-solving skills.
In banking, there are numerous different employees who provide client care. Customers who
are enraged or unsatisfied may be able to be placated by branch managers. Customer service
representatives can handle more complicated transactions, such as account opening.
Customers seeking to borrow money, both consumer and commercial, are served by loan
officers.
Banking is all about good customer service. Today's banks face a slew of challenges in the
marketplace. Many department stores and supermarkets, for example, provide financial
services such as check cashing and money order sales. Unique items in the banking business
aren't as crucial as exceptional customer service because of the quantity of competition. In
this area, banks are constantly striving to improve. Customer surveys and tracking calls
received through the call centre are two examples of such procedures. To motivate employees
to enhance their customer service, incentives such as customer service awards may be
offered.
What is Customer Satisfaction?

Customer satisfaction refers to how well you, as a product or service provider, fulfil the needs
and expectations of your customers. This applies to any interactions before and after the sale
as well as during it. The following customer satisfaction definition comes from Cambridge
Dictionary:

“A measure of how happy customers feel when they do business with a company.”

Seems simple enough, right? But the problem comes down to measuring customer
satisfaction. It’s not enough to assume that a customer is satisfied because they leave with a
smile on their face and don’t complain about you online. Some people might just be polite.

How can you measure customer satisfaction?

The fact that the above definition uses the word “measure” highlights the importance of
measuring customer satisfaction empirically. This is typically done using customer
satisfaction surveys to gather your customers’ opinions on the different aspects of your
service. You can also factor in other metrics like customer retention and loyalty to make
assumptions about customer satisfaction.

By measuring customer satisfaction in this way, you can identify your weaknesses and figure
out how to improve your service in order to increase customer satisfaction levels.

Why is customer satisfaction so important?

It’s much easier to forget about a customer as soon as they leave your store or click away
from your website. So why should we take the time to follow up with our customers and
focus on their satisfaction levels? Here are some of the key reasons why measuring customer
satisfaction and striving to improve it are so important. 

Maximise customer lifetime value

Many businesses underestimate the cost of acquiring a new customer. It is much more cost-
effective to invest in retaining existing customers rather than constantly chasing new ones. If
you focus on customer satisfaction, then those that buy from you are much more likely to buy
from you again.

This increases the lifetime value of that customer, i.e. the amount they spend with you over
their entire lifetime. When customers keep coming back to buy from you, your return on
investment from their customer acquisition cost increases. The bottom line is: satisfied
customers are more loyal and loyal customers are more profitable for your business.

Minimise customer churn

Customer churn refers to those customers that stop buying from you, whether that’s after
their first purchase or after several years of being a loyal customer. Customer churn can be
very costly for your business because it means you need to go back to focusing on getting
new customers. As mentioned above, a satisfied customer is more likely to remain loyal,
therefore decreasing customer churn. 

Positive brand exposure

Word of mouth is important to any business. Disgruntled customers will go online and
complain about your business or its products, they’ll write negative reviews, and they’ll
recommend your competitors over you. By improving your customer satisfaction, you not
only avoid this, but you also benefit from positive word of mouth. Satisfied customers will
recommend you to friends and family, talk positively about you online, and, hopefully,
write positive reviews on places like Google, Facebook, and Yelp.
Increase revenue

All businesses want to increase their revenue and grow their business, but they might not
always have the resources to invest in actively growing it. Once you’ve got your customer
satisfaction strategy right, it becomes an effective way to grow your business and its revenue
passively.

While you focus on improving other areas of your business, satisfied customers keep coming
back to buy from you and they keep recommending you to their peers or writing positive
reviews online. This keeps a steady and, hopefully, increasing revenue stream coming in
without you having to constantly work on it. Of course, customer satisfaction is something
you should review on a regular basis to ensure you’re still hitting the nail on the head.

Customer Satisfaction
Customer service was rated highly by only 12 of India's 51 banks.
The only state-owned lender to get a ‘high' rating was IDBI Bank.
With a score of 95, RBL Bank topped the list.
According to a study released by the Banking Codes and Standards Board of India (BCSBI)
on Tuesday, only one public sector bank was rated 'high' on compliance, compared to eight
private banks on the list. The only state-owned lender to receive a 'excellent' rating of 88 was
IDBI Bank. Yes Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank,
IndusInd Bank, and DCB Bank had the highest score of 95, followed by RBL Bank, HDFC
Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, and DCB Bank. State-
owned institutions such as Punjab and Sindh Bank, State Bank of Patiala, Andhra Bank,
Punjab National Bank, and Union Bank of India were among the worst-rated banks. In the
study, foreign banks such as HSBC India, Citibank, and Standard Chartered were rated higher
than state sector banks. The BCSBI oversees and establishes standards for banks' retail
operations.
To give an overall rating, the BCSBI poll looked at aspects like information dissemination,
transparency, customer centricity, grievance redressal, and consumer feedback. A ‘high'
rating was given to any bank having an aggregate rating of 85 or higher. The average score of
banks has been declining, according to AC Mahajan, chairman of the board, which is a cause
for concern.

According to Mahajan, the board visited 2,733 bank locations across the country for this
survey and interviewed 8,485 clients. "We visited about 20% of the branches in rural and
semi-urban areas, while the rest were in urban areas," he stated. According to the survey, 15
banks received a 'below average' rating for information dissemination, eight for a lack of
openness, and one each for insufficient grievance redressal and client centricity. Customer
comments, on the other hand, did not result in any bank receiving a 'below average' rating.
According to Mahajan, the reason for this discrepancy was that client feedback was mostly
based on the bank's reputation among its customers, rather than guaranteeing compliance.
“Because the respondents are distributed around the country, it is unlikely that the survey will
be influenced by any biases,” he added.
In today's competitive market, service quality plays a critical part in a bank's long-term
viability. As a result, in order to adapt to the changing market, banks must maintain existing
clients while also attracting new ones by delivering higher-quality services. Customer
happiness and service quality have a close relationship, according to the findings of the study.
Banks must improve their service quality to meet client expectations in order to ensure
customer happiness.
The specific conclusions regarding the five parameters of service quality are as flows:
(i) In order to please their customers, the appearance of physical facilities,
equipment, employees, and communication materials in relation to "Tangibility"
is not as strong in SBI Bank.
(ii) SBI bank's service quality is not as dependable, accurate, secure, or loyal to its
clients as it should be.
(iii) In the case of 'Responsiveness,' this bank's service quality fell short of their
customers' expectations.
(iv) Bank clients have given negative criticism on the topic of "assurance." The bank
has been determined to be lacking in assurance.
(v) In terms of 'Empathy,' SBI provides great services that have resulted in increased
client satisfaction.
Because technology is rapidly evolving, SBI Bank must bring its technology up to date to
meet the demands of the current period, and banks must install a sufficient number of cash
counting machines in each branch.

(i) To better serve consumers, the bank should ensure that bank slips, challans, and
pamphlets are readily available.
(ii) The bank's workforce should be increased in order to provide personalised service
to customers and to serve them quickly.
(iii) The bank shall ensure that its workers treat customers with respect and
friendliness.
(iv) The SBI bank has a large number of customers. As a result, the bank should hire
more employees to serve clients more quickly, improve customer seating, and
expand the bank's area to ensure that customers receive prompt service.
(v) Improved and faster technology, posh branches, and the greatest product/service
offering are all important but insufficient for customer pleasure. As a result,
higher knowledge and improved communication skills are required to change the
mindset of the personnel.
 Whether you want to invest your money or work in the banking industry, the cutthroat
competition forces people to ponder more than 100 times before deciding on one of the two
options. Individuals, on the other hand, have different priorities, and they may simply
select between the two by writing down their preferences and choosing the one that best
suits them.