I spent a month in India this Summer, promoting UCLA Anderson's Master in Financial Engineering (MFE) program, teaching and attending research conferences at the Indian School of Business (ISB), meeting entrepreneurs as well as senior government officials to talk about Financial Access at Birth (FAB) campaign and learn about India's efforts in bringing Financial Inclusion to the poor. The ISB Dean, Ajit Rangnekar, introduced me to Shiva Kumar, Chief General Manager at the Hyderabad Local Head Office of State Bank of India (SBI) -- the largest public sector bank in India.Mr Shiva Kumar invited me to visit his office where he told me about a brilliant, simple and effective consumer complaint program he and his team have designed and implemented in the Indian state of Andhra Pradesh. It is called "SMS Unhappy." Any SBI customer, anywhere in the state of Andhra Pradesh, if he or she is "unhappy" about any service, sends, 24x7, a simple text message "UNHAPPY" using a mobile phone to a number 8008 20 20 20 advertised on billboards and in all SBI branch locations.
Notice that there is minimal effort on the part of the customer -- all he or she needs is a mobile phone and even if the customer is not literate, it is easy to ask someone how to type the letters UNHAPPY to send the first text. The entire system involves absolutely no paperwork. The most brilliant part is that a permanent electronic record of the complaint is created which can be accessed and used for monitoring, feedback and incentives. The public sector banks in India have been notorious for their inefficiency, maddening paperwork requirements and an appalling lack of accountability because usually there is no simple way to complain and even when one does complain, the access is only to a local supervisor who has no incentives to follow-up on customer complaints. The system implemented by Shiva Kumar appears to work because there is now an awareness among the bank employees and branch managers that someone higher-up in the system may be watching and a record of inefficiencies and complaints could be accessed with a few simple key strokes.
The Right to Information Act (RTI), passed in 2005 in India, could make the use of such data even more potent in fighting corruption and inefficiency. In fact, Shaffi Mather has devised an ingenious way to fight corruption, largely making use of RTI, that is described well in his TED talk.This is not the first instance in which the use of information technology has eliminated major inefficiencies and corruption in India. The ticket booking system in the Indian Railways was marred with petty corruption and gross inefficiencies many years ago. The reason was that a scare resource, available seats, were allocated by local clerks who often misused that allocation power to extract bribes and curry favors for hapless consumers. Computerizing the entire booking system has taken that power away from Indian Railways employees and booking tickets is now a breeze. Similarly, digitizing the entire land and property records in the state of Andhra Pradesh by the former Chief Minister Chandrababu Naidu cleaned up the system that had made buying and selling property in the state a nightmare.
The key to such reforms is information. Information is power. The appropriate use of Information Technology can take this power away from those who are likely to abuse it for their own benefit and distribute this power appropriately for achieving optimal allocation of resources.
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