Service Recovery Paradigm for Innovative Banking

Abstract

In the context of the globalised business environment of banking, it is the quality of service and customer relationship that are going to help the banks sustain their business and image. There are a few syntactic and semantic phrases that are doing rounds in the industry and academic circuits lately-the Knowledge Management, Value Capture, Innovation and Creativity for delivery and recovery of a failed service. This paper attempts to critically evaluate the perception of bank customers towards the service quality and customer relationship practices in banks based on the study of some select number of banks with special reference to the 'service recovery' practice for customer retention and how that helps in creating customer loyalty. 'Service recovery' paradigm has the potential to create a delightful 'ahaa' effect in customers, which is the ultimate goal for loyal relationship. This paper aims at presenting the fundamental concepts behind the key terms and the service recovery paradigm for banks in India, based on a field study conducted with 70 clustered customers of five banks, using the grounded theory approach with snowballing technique and experimental format. The issue addressed was the incidence of service lapse; and how it was attended to by the banks. Customer satisfaction is the defining feature of any service establishment. Banking being the core activity of the financial sector, the enlightened banks need to embrace the policy to create customer delight through efficient delivery processes and suo-moto remedial action of 'service recovery', lest they should face the ignominy of 'switching behaviour' on the part of their aggrieved customers. Innovative responses are the key to customer satisfaction and customer loyalty.