Mystery shopping firms go on espionage trip, help banks streamline work
A growing tribe in the country -- mystery shopping companies -- are helping banks undertake covert audits on employees and branches to ensure that they strictly adhere to the rule book, prevent money laundering, and improve customer services.
'Mystery shoppers' pose as potential customers.
About 20% audits done by banks are focused exclusively on monitoring anti-money laundering (ALM). This number is expected to rise with banks stepping their antennae to intercept black money.
According to an estimate, mystery shopping in India is a fledgling $30-million market with its leading patrons being organised retail, automotive, banking and hospitality industries. About 20% of the total mystery audits are conducted by banks.
They shell out anywhere between Rs 2,500 and Rs 7,000 per audit to mystery shopping companies.
Big banks such as ICICI Bank, Axis Bank and HDFC Bank hire mystery shoppers to undertake thousands of audits every year.
Axis Bank, for example, conducts over 4,000 audits annually. Rajiv Anand, group executive and head of retail banking, Axis Bank, said: "We undertake about 4,000 mystery audits annually to improve customer experience and ambience of branches and to ensure compliance with regulatory requirement. Through this exercise, we try to improve customer services, the look and feel of the branch, and etiquette of personnel. We also use it for hand-holding for enhancing our digital capabilities. Anti-money laundering audits are also undertaken to check if the KYC norms are in place."
Public sector banks like State Bank of India (SBI) also undertake similar audits but it's done in-house, with bank employees themselves doing the audit.
B Sriram, managing director, SBI, said, "We have an internal system to track customer satisfaction exercise, complaints received and the redressal time is all closely monitored. KYC norms are also closely monitored now, so that there are no lapses in the system."
HDFC Bank said they would not like to comment while ICICI Bank did not respond to an e-mail.
According to Bare International, a global mystery shopping company operating in India, only 20% bank audits are solely directed at tracking AML, but this number is fast increasing. The rest of the audits are directed at improving branch ambience, feel of ATMs, behaviour of staff, AML, and overall services.
Findings by Bare International indicate that, in around 20-23% cases, employees do not ask about source of funds and banks need to train their staff.
Sonul Verdia, general manager India, Bare International, said, "Definitely, the AML audits are picking up. As per RBI guidelines, every bank has to conduct audits in order to check compliance with KYC norms and account opening process. With the prime minister's Jan Dhan Yojana, there would be a growing need for local banks to check vast dormant accounts. Insurance and banking sectors conduct a lot of compliance check and integrity audits to fix revenue leakages."
Pankaj Guglani, chief of home-grown mystery shopping company RedQuanta, said: "We have 4-5 banking clients and they regularly undertake AML audits where shoppers have to check if employees are monitoring cash deposits, misselling products and if they are following KYC norms. Customer service is another important part of banking audits."
Also, it is not just the banks that are conducting these audits. Almost every major retailer or service provider in the various sectors – be it fashion, luxury, beauty, F&B, hospitality, health care and wellness, entertainment, or automobiles - is paying mystery-shoppers to evaluate services. The espionage does not end there. These companies also send shoppers to spy on competitors.
The boom in retail is fuelling the growth of the mystery shopping industry, and more and more consumers are enrolling as auditors. For example, Bare International has about 18,000 shoppers listed with them, and conduct around 3,500 audits across various sectors per month in India. The company is growing at an estimated CAGR of 35-40% per year.
'Mystery shoppers' pose as potential customers.
About 20% audits done by banks are focused exclusively on monitoring anti-money laundering (ALM). This number is expected to rise with banks stepping their antennae to intercept black money.
According to an estimate, mystery shopping in India is a fledgling $30-million market with its leading patrons being organised retail, automotive, banking and hospitality industries. About 20% of the total mystery audits are conducted by banks.
They shell out anywhere between Rs 2,500 and Rs 7,000 per audit to mystery shopping companies.
Big banks such as ICICI Bank, Axis Bank and HDFC Bank hire mystery shoppers to undertake thousands of audits every year.
Axis Bank, for example, conducts over 4,000 audits annually. Rajiv Anand, group executive and head of retail banking, Axis Bank, said: "We undertake about 4,000 mystery audits annually to improve customer experience and ambience of branches and to ensure compliance with regulatory requirement. Through this exercise, we try to improve customer services, the look and feel of the branch, and etiquette of personnel. We also use it for hand-holding for enhancing our digital capabilities. Anti-money laundering audits are also undertaken to check if the KYC norms are in place."
Public sector banks like State Bank of India (SBI) also undertake similar audits but it's done in-house, with bank employees themselves doing the audit.
B Sriram, managing director, SBI, said, "We have an internal system to track customer satisfaction exercise, complaints received and the redressal time is all closely monitored. KYC norms are also closely monitored now, so that there are no lapses in the system."
HDFC Bank said they would not like to comment while ICICI Bank did not respond to an e-mail.
According to Bare International, a global mystery shopping company operating in India, only 20% bank audits are solely directed at tracking AML, but this number is fast increasing. The rest of the audits are directed at improving branch ambience, feel of ATMs, behaviour of staff, AML, and overall services.
Findings by Bare International indicate that, in around 20-23% cases, employees do not ask about source of funds and banks need to train their staff.
Sonul Verdia, general manager India, Bare International, said, "Definitely, the AML audits are picking up. As per RBI guidelines, every bank has to conduct audits in order to check compliance with KYC norms and account opening process. With the prime minister's Jan Dhan Yojana, there would be a growing need for local banks to check vast dormant accounts. Insurance and banking sectors conduct a lot of compliance check and integrity audits to fix revenue leakages."
Pankaj Guglani, chief of home-grown mystery shopping company RedQuanta, said: "We have 4-5 banking clients and they regularly undertake AML audits where shoppers have to check if employees are monitoring cash deposits, misselling products and if they are following KYC norms. Customer service is another important part of banking audits."
Also, it is not just the banks that are conducting these audits. Almost every major retailer or service provider in the various sectors – be it fashion, luxury, beauty, F&B, hospitality, health care and wellness, entertainment, or automobiles - is paying mystery-shoppers to evaluate services. The espionage does not end there. These companies also send shoppers to spy on competitors.
The boom in retail is fuelling the growth of the mystery shopping industry, and more and more consumers are enrolling as auditors. For example, Bare International has about 18,000 shoppers listed with them, and conduct around 3,500 audits across various sectors per month in India. The company is growing at an estimated CAGR of 35-40% per year.
Source: http://www.dnaindia.com/money/report-mystery-shopping-firms-go-on-espionage-trip-help-banks-streamline-work-2096253
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