RBI plans ombudsman for digital payments — Lenders will have to upgrade digital infrastructure to keep up.
In a move to tackle growing customer dissatisfaction with India’s digital payment infrastructure, RBI has planned a separate ombudsman to deal with complaints arising from digitization. The growing share of electronic transactions, estimated at 92.6 per cent in 2017–18 as compared to 88.9 per cent in the previous year, necessitates the need for a new player with teeth and the resources to enforce compliance.
According to the RBI’s annual report for 2018, the number of customers who have registered complaints regarding these digital transactions has consistently been on the rise going from 19% of the total complaints during 2016–17 to 28% till the end of June 2018.
This move is intended to take pressure off the banking ombudsman that currently deals with the entire gamut of problems in the rapidly evolving space. The new payments ombudsman is expected to handle customer grievances pertaining to mobile banking, electronic banking, wallets and digital payments.
The ombudsman will be pushing for an efficient customer redressal framework for Banks, NBFCs, MFIs, Wallets and other Financial institutions to increase confidence in the digital banking and payments ecosystem. The ombudsman is expected to be operational within the next year.
The development has been in the consideration for some time now, it comes close on the heels of the RBI’s circular that issued instructions to mobile wallet players and NBFCs last year to establish a transparent customer grievance redressal framework. The circular had also recommended the appointment of a dedicated nodal officer for all Banks and NBFCs to handle customer complaints, escalations and improve turnaround times for addressing customer complaints.
The slew of policy and regulatory changes indicates that Banks and NBFCs need to get serious in their efforts of streamlining customer experience of their digital transactions, lenders are expected to invest in and upgrade their digital infrastructure to keep pace with the growing digital economy.
However smaller banks and even some large public sector banks have been struggling with digitization as they lack the engineering, design expertise and talent to design customer friendly portals. A study conducted by ‘Forrester Wave’ brought to the fore that none of the Indian banks could be considered leaders when it came to the user-friendliness of their online portals. This means that there is a tremendous scope for improvement, either by revamping and setting up teams for digital transformation or by tying up with Fintechs as transformation partners.
Leading Fintech players have created products that can help banks in their digitization journey and reduce reliance on legacy systems. SaaS (Software-as-a-Service) products developed by Fintechs can be leveraged by banks address the pain points felt by the customer in their digital lending experience.
Fintech players by virtue of their exposure to the larger product ecosystem are more equipped to deal with the challenges of digital transformation. Lenders need to be increasingly open to adopting loan management platforms, sourcing platforms, data analytics and alternative underwriting solutions to adapt to changing customer preferences and demands. Banks and NBFCs that integrate such digital solutions and successfully create frictionless digital lending experiences for their customers will emerge leaders and capitalize on what is estimated to be a $ 5 Trillion opportunity (according to reports by BCG) over the next decade.
