( measured as customer satisfaction ) and behaviour ( loyalty ) should form the dominant element in assessing the behaviour of banks, together with more objective measures such as credit availability and pricing. it is increasingly becoming a matter of debate between too big to fail versus too small to survive. competition must create a level playing field and the desired objective of consumer protection should be built into any competition strategy adopted by the players in the industry. a point that cannot be missed is about the changing face of competition and the role of marketing. banking has been and will always be a “ people business ”. pricing is important but there may be other valid reasons why people select and stay with a particular bank. especially in transparent situations with a high level of competitiveness, banks must try to distinguish themselves by creating their own niches or images. they must articulate and emphasize the core values to attract and retain certain customer segments. values such as “ sound ”, “ reliable ”, “ innovative ”, “ international ”, “ close ”, “ socially responsible ”, “ indian ”, etc need to be emphasized through concrete actions on the ground and these words should not merely form a part of the ad campaign of banks. let me turn my attention to certain aspects concerning fair treatment of customers. there is an imbalance of power as regards information and resources between consumers and financial service providers. this could lead to market failure. consumer protection financial literacy promote efficiency, transparency and deepening of retail financial markets. it also protects the financial sector from the risk of government overreaction. however, market bis central bankers ’ speeches forces and competition policy will not fully address the consumer protection issues. it is a challenge to strike the right balance between regulation and market competition. the fair practices code, code of commitment to customers etc. cannot be a substitute for regulation but can be useful in improving business practices of banks. we need transparency, nonexploitative pricing, fair and non - coercive selling practices, inexpensive and speedy grievance redressal and respect for privacy on personal financial information. before i end talking on customer service, i would like to flag three important changes that are expected to occur in the backdrop of the recommendations made by the committee on customer service in banks ( damodaran committee ). the first one pertains to doing away with foreclosure charges on home loans that are carrying floating interest rates. the second one is concerning zero liability against loss in atm and on - line transactions. lastly,

the rapid advancement and high rate of obsolescence in technology that often impose huge costs. yet, banks can ill - afford to ignore scope of application of new banking technology. at the same time technology has helped improve mis in the banks. they need to leverage on this. ultimately the key to success of transforming a bank lies in improving governance. diffusion of new technology typically is observed to follow an s - curve or the sigmoid curve of which a logistic curve is a special case. this pattern is often observed for sale of new consumer products as well, but is perhaps sharper in case of new technology. in simple intuitive terms, the s - curve reflects four phases of in life cycle of a technological innovation – emerging, growing, maturing and aging. we need to keep our vistas open, but not necessarily jump to adopt any new technology without fully understanding it. the so - called web 3. 0 cluster technologies extensively leverage social media and facebook ethos. however, collaboration, sharing, creativity, conversational marketing, customer advocacy, and innovation would require appropriate security solutions first. cloud computing, the internet - based highly scalable computing infrastructure may also look attractive but banks need to focus both on computing as a product and computing as a service. cloud computing can of course add to capabilities with minimal investments in new it hardware or software. the “ big data ” can also significantly scale up banks abilities for data analysis and can go a long way in supporting compliance, risk management and other strategic decision functions. it can enable radical customization and support novel business models that can help banks face a more competitive environment. we need to recognize that it is still early days for these data - intensive techniques to form the core of the banking. yet, need for greater granularity and business complexity needs to be acknowledged. in due course, these techniques can potentially open up vistas for real time targeting of customers ’ requirements. at the same time, new s - curves for banking can come in some other forms. for instance, as technology diffusion for rtgs matures brining in several benefits to banks and customers, the rbi is planning to move to introduce next generation rtgs in due course. the focus of technology adoption should be customers rather than vendors or employee. the key objective is to reduce the costs of banking products and services and make them affordable. thus, technology must make the products and services cheaper, faster and convenient. steps like back office centralization, business process re - engineering