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Mystery Shopping

Overview

Banking institution hires Netrika Consulting as a Mystery Shopping agency to measure the quality of customer experience at one of its branches. The gathered data is reported to the client to help it measure and improve its customer experience.

Scope

The scope of this case study revolves around developing a questionnaire and get it approved by the bank, risk categorization of branches, a thorough discussion on selecting a branch for mystery shopping, visiting the bank for mystery shopping, identifying banks and employees involved in the violation of RBI policies and guidelines.

Approach

Netrika Consulting prepared a questionnaire that includes questions covering the entire account opening procedure, information related to KYC & AML, and demonetization related monitoring at the selected branch.

  • Whether a person can open an account with insufficient KYC documents.
  • Whether a person can open a bank account using photocopies of the required documents.
  • Whether a person can open an account using non-verified photocopies of its documents.
  • Whether the bank is accepting documents like KYC documents that are not listed in the master circular/bank KYC circulars.
  • Whether the bank is scanning the PAN details on the IT website.
  • Whether the bank cross-verified the accuracy of the address proof.
  • Whether the branch is performing customer due diligence for appropriate customer risk assessment or not.
  • Whether the branch employee is assisting the customer in opening accounts with manipulated or inappropriate documents.
  • Whether the employee or higher authority is accepting an unreasonable amount of cash for account opening.
  • Whether the employee is opening the account without verifying the original KYC documents.
  • Whether the branch agrees to the suggestions of the opening of multiple accounts with individual customer identification number and facilitation of cash deposits into these accounts.
  • Whether the branch approves to issue Demand Drafts for a total value exceeding INR 50,000 to non-account-based customers.


How Netrika Consulting Assisted?

Netrika Consulting, through consistent strategy, decides to distribute the mystery sopping procedure into three key steps:

Mystery Shopping

A person will visit the branch to analyze the process of opening a new account at the branch. The objective is to collect specific information by pretending as an ordinary customer and documenting the responses.

Unearthing Modus Operandi

This approach includes identify the potential lapses in adherence to the RBI prescribed guidelines.

Reporting

The final report and recommendations based on the findings of the mystery shopper is submitted for further analysis.

KYC & AML

Helping the customer in placement or layering of cash by:

  • Opening accounts with insufficient KYC documents, based on photocopies without attestation, manipulated documents.
  • Accepting documents like KYC documents that are not listed in the master circular/bank KYC circulars without verification.
  • Not verifying the PAN or the address proof and relying on the photocopies only.
  • Neglecting customer due to diligence procedure for appropriate customer risk assessment. 
  • Accepting an unjustified amount of cash for account opening.
  • Issuance of Demand Drafts for a total value exceeding INR 50,000 to non-account- based customers. 
  • Making promises which are not possible for the banks to fulfill.
  • Helping customers to open an account on relatives' names (without the physical presence of the relative in the branch while opening the account). 

Banks employees are encouraged to meet targets and earn incentives to become eligible for promotions and transfers

How Netrika Consulting Assisted?

Risk categorization of staff against an opening account with the insufficient documents, opening accounts without following the Bank's KYC guidelines, and providing solutions for circumventing the KYC and AML process is evaluated based on specific criteria that include:

  • Willingness to approve without persuasion
  • Willingness to approve with persuasion

Up-front rejection

During demonetization

The objective is to analyze if the bank is accepting notes which are banned. If the staff is involved in assisting the customers in drawing new notes in exchange for old or banned ones. If the branch is allowing customers to withdraw more cash beyond the stipulated amount.

Key Findings

Violation of RBI guidelines due to not following an appropriate procedure and documentation-check while opening a new bank account at the selected branch is recorded. Rules adhere to KYC/ AML for cash conversion at the branch are not followed as expected. Customers are allowed to dispense more cash then allowed during demonetization.

Lessons Learnt

Banks must adhere to KYC/ AML norms as established by RBI.

  • Account opening procedure must be followed strictly.
  • Banks must not be allowed placement and layering of cash.
  • Targets/ Incentives/ Postings/ Promotions must not be interlinked.

Accreditations & Affiliations

Forensic Interview Solutions
PBSA
ASIRS
NASSCOM
SECONA
CERTIN EMPANLLED
CII
Global E2C
Association of Certified Fraud Examiners
ASIS International
International Trademark Association
SHRM
APDI
ACACAP
Institue of Directors
Award 2023
India IP award 2022
India IP award 2021
Entreprenuer of the Year Award 2020
Business Protection Award 2019
Cobra Award 2019
Business Sphere Award 2018
Fraud Investigator of the Year Award
Award for Outstanding Contribution in Risk Management
Security Project Design of the Year
FSAI