Indian banks should deploy more people to face customers, says BCG--
Economic Times 12th August 2013
KOLKATA:
The state dominated Indian banking is loaded with more than double the required people at the back office and they lose out on the most profitable transaction banking which the foreign and private banks are eating into, Boston Consulting Group said in a study.
"Optimization of in non customer-facing activities is, therefore, the single largest lever for banks to improve the overall productivity," it said in the study titled 'Consistency, Quality and Resilience: The Next Frontier For Productivity Excellence'.
It criticised banks for focusing only on cost improvement and "freeing up" of the people, which led to reduced customer service and increased risk.
About 55% of bank employees does non-customer facing back-end work. "This needs to go down to 20 percent. It needs lean and customer centric operations driven by process quality and technology," the report said.
It has suggested that banks should have less than 50 back-end employees for every 100 customer facing person. But in practice, for every one customer facing person, Indian banks have 1.2 non customer facing persons.
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