What is needed for criminals? prison or psychological treatment ?:
In my own opinion, psychological treatment is the best way to treat criminals rather than sending them to prisons. I believe that nobody is born to be a criminal. The primary determinant for a person to be such, is being brought up in a not-so-wholesome family/environment. With a proper nurture, a person can grow and mature well. 
So, with the help of those psychologists and or psychiatrists the bad behaviors of those persons can be cured and remedied.