Banking Sector Customer Service: Confidence Crisis and Solutions

1. Background • Opinions are rife that the banking sector is gradually losing investors and customers confidence, aftermath of the huge rot unearthed in the sector by the CBN. The foreboding fear that things may not be the same again in the sector is palpable and that it will take a longer time for sanity and profitability to return to the sector is well founded. • One critical aspect of service delivery is customer service. Over time, there has been a deficit of such in virtually all the sectors of the economy and the banking sector is no exception. Practically, banking operations in Nigeria are awash with frequent system shutdowns that has consistently make it almost impossible to use the ATM cards on the Interswitch network, and no apologies are received for ATM failed services. This is exacerbated by the long, suffocating queues usually experienced in some bank branches across the land. • It is on the basis of these that we sought to aggregate the opinions of people on their perception of customer service delivery by banks and things to be done to stem the tide of dwindling confidence in the banking sector, amongst others. • The study was carried out in the first two weeks of March, 2010.

2. Sample Design • The modified, multi-stage random probability sampling approach was employed. The rationale was predicated on the need to preclude any known form of bias that may affect the accuracy of data collected. • The sample selection involved a 5-stage design as shown below: Stage 1 - Delineation of each area to be sampled into smaller units of near equal proportions known as sectors. Stage 2 - Random selection of sectors. Stage 3 - Random selection of dwelling structures. Stage 4 - Random selection of household units (i.e. residential units within each dwelling structure). Stage 5 - Finally, random selection of individuals to be interviewed.

3. LOCATION (LAGOS) • Ikeja/Ogba/Ojodu– 108 • Ojuelegba/Yaba – 97 • Surulere– 102 • FESTAC/Mile 2 – 88 • V.I/Ikoyi– 70 GENDER • Male – 259 • Female – 206 • 18 – 25 – 96 • 26 – 35 – 117 • 36 – 45 – 144 • 45 + – 108 Achieved Sample Structure (Respondents’ Profile) 465 Respondents AGE

4. EDUC. BACKGROUND • Elem./Sec.Educ. – 44 • OND/Dip. ,, – 141 • HND/BSc. ,, – 197 • MSc./PHD – 83 SOCIAL CLASS • AB – 85 • C – 263 • DE – 117 Achieved Sample Structure (Respondents’ Profile) 465 Respondents • OCCUPATION • Professionals: Lawyers, Doctors, • Engineers, Bankers etc. – 83 • Traders/Businessmen/women – 144 • Civil /Public Servants – 127 • Coy Managers/Directors – 67 • Others – 44

5. Executive SummaryRatings of Some Banks on Customer Service “on a 5-point scale” • Respondents were each presented with a ‘SHOW CARD’ to indicate their level of satisfactions with their banks ‘customer service’. • The ‘SHOW CARD’ depicts: 1 for ‘very much dissatisfied’ 2 for ‘dissatisfied’, 3 for ‘neither satisfied nor dissatisfied’, 4 for ‘satisfied’ and 5 for ‘very much satisfied' service.

6. All the banks were largely operating within the 3 – point mark. The implication of this is that the banks are yet to measure up to customers expectations in holistic customer service delivery. Reasons adduced for such ratings by the respondents were largely predicated on the “incessant ATM access hassles/persistent problem surrounding the usage of ATM“ and “the unpredictability/instability in the sector”. All these recurring problems are seen to be impinging on the quality of customer service delivery. • From respondents’ perspectives, a bank will be seen to be delivering ‘good customer service’ if it has “on-line, real time banking/unhindered Internet banking”, “tolerance for customers/being painstaking in solving problems”, “functional/hassle-free ATM services” and “honest/transparent transactions”. • If banks must endear themselves to the customers, they must necessarily imbue “fraud free ATM services”,” …transparent banking operations”, “maintenance of competent/honest staff” and “responsive, problem solving customer relations”… • In conclusion, to reinstate banks to the path of rectitude thus gaining customers confidence, they need to be more altruistic with their statements of accounts as declaration of spurious paper profits is anathema to building trust.

7. They should imbibe more transparency in their operations in addition to making ATM services more functional and obviating internal abuses and frauds. • Overall, management of various banks must desist from policies that border on profligacy that may easily vitiate the recovery efforts of the banks in the face of the precarious credit/capital situations of virtually all of them.

8. Banks Operating Accounts With Detailed Findings Part 1: Incidence of Patronage & Customers Experience Base: All respondents = 465 (100%) GT Bank First Bank 59% 52% UBA Zenith Intercontinental 40% 36% Stanbic IBTC Oceanic 22% 14% 14% • In the motley of about 17 banks mentioned by the respondents, GT Bank with 59% emerged tops as the • one mostly patronized, followed closely by First Bank (52%), UBA (40%) and Zenith (36%). • Over 50% of the respondents maintained accounts with more than one bank for reasons bordering on • expediency of such actions and business considerations.

9. Since When Have You Been Patronizing Your Bank? • Aftermath of the first Professor Soludo led CBN reforms, there appears to be a major shift in customers’ • allegiance to any particular bank and the attendant banking transactions were also attuned as customers • themselves had to adjust to the then realities, thus a sizeable 41% of them opined to have been having • transactions with their banks for “less than 3 years”, followed with those (20%) who mentioned “4-8 years”.

10. What Has Been Your Experience Since Then? Base: All respondents = 465 (100%) • From all indications, virtually all the respondents interviewed were getting less than they bargained for in respect of their • relationship and experience with their banks. Whilst 43% lamented the frequent tribulations with their day-to-day usage • of ATM cards, 36% bemoaned the queues and delays that often characterize in-hall banking transactions. The two major • concerns virtually cut across all the banks whilst “the fear of being declared insolvent” reverberated through most of the • banks that fell under the hammer of the recent CBN reforms.

11. Part 2: Perspectives on ‘Customer Service’ What Constitutes ‘Good Customer Service’ from Respondents’ Perspectives All respondents = 465 (100%) AB (N=85) • On-line, real time banking / unhindered Internet banking … 35% • Personalized banking, Relationship Officers up to it … 31% • Prompt response to enquiries/complaints … 27% • Zero tolerance for fraud/strong aversion to ‘book cooking’ / • non-declaration of ‘paper profits’ … 24% • Tolerance for customers /being painstaking in solving problems … 37% • Unobstructed, smooth Internet banking … 22% • Friendly/ problem solving customer care/ relations … 19% • Non-congested/non-rowdy banking hall … 16% • Prompt SMS/Email alert on transaction … 15% C (N=269) DE (N=117) • Functional /hassle-free ATM service ... 31% • Honesty/transparency in transaction ... 29% • Dealing with problems straightaway/without delay ... 24% • Access to credit/loans ... 15% • Real/transparent promotions ... 14%

12. Things to Be Done by Banks to Endear Them to The Customers Base: All respondents =465 (100%) Fraud free/fear free ATM services Open up the books always/ no shady deals/ transparent banking operations Maintain crops of competent/ honest staff 52% Responsive problem-solving customer care/relations Eternal vigilance of regulatory authourities to avoid further slide Restore confidence in the banking sector 41% 32% 24% 24% 20% • For banks to endear themselves to the customers, they must imbue “fraud free ATM services”,” …transparent • banking operations”, “maintenance of competent/honest staff” and “responsive problem solving customer • relations”…