Category Archives: Financial Services in Nigeria

NDIC chief has declared as falsehood, the allegation that Polaris Bank was not registered by the Corporate Affairs Commission (CAC)

NDIC chief has declared as falsehood, the allegation that Polaris Bank was not registered by the Corporate Affairs Commission (CAC)

Mismanaging officers’ of Skye Bank under investigation

The events leading to capital erosion of the defunct Skye Bank Plc, and the roles played by its officers would be unearthed soon, going by assurances from the Nigerian Deposit Insurance Corporation (NDIC).

If the promises are made good, it would be the beginning of an end to the era of walking out freely by top executives of corporates, after superintending avoidable negligence resulting to losses.

The Chief Executive Officer of NDIC, Umar Ibrahim, while addressing the newsmen on the sidelines of the Africa Regional Committee workshop of the International Association of Deposit Insurers, in Lagos, yesterday, said the investigation has already begun.

Already, stakeholders have expressed dismay that some directors, who were part of the management that superintended capital erosion in banks, were usually allowed to remain by the regulators.

He said: “They are being investigated and I can assure you that when the time comes, the relevant security and law enforcement agencies will do their work.”

The Godwin Emefiele-led CBN had on July 2016, during an intervention to save Skye Bank, forced the resignation of the Chairman, all non-executive directors, as well as the Managing Director, Deputy Managing Director, and the two longest-serving executive directors, while appointing their replacements.

But at the take over of the bank by AMCON, Emefiele noted: “Given the good performance of the board and management, the CBN shall retain them.

In addition, all employees of Skye Bank shall be absorbed by Polaris Bank under a new contract, unless any employee decides to opt out.”

Meanwhile, the NDIC chief has declared as falsehood, the allegation that Polaris Bank was not registered by the Corporate Affairs Commission (CAC), a day after Emefiele told Nigerians that the said bank was first registered two weeks ago as a limited liability company, thus reinforcing their objections to the claim.


Volatility in the foreign exchange market dominated proceedings for banks in 2016. There were hopes that the attempted liberalisation of the foreign exchange market in the middle of the year would improve foreign exchange flow but that did not materialise. The supply side remains challenged.

In addition, the restriction on the importation of the 41 goods and services that had been in place since 2015 was maintained.

The CBN sought to clamp down further on bureau de change operators that it believed were attempting to manipulate the market. As foreign exchange supply declined, banks restricted use of dollar cards overseas.

Despite the tightening up of the market, banks were still able to report very strong foreign exchange-related income because of the positive gains from their balance sheet positions as the naira weakened.

Besides foreign exchange, banks adopted more of a risk-averse position, preferring to restrict lending to only top tier customers and strengthen their risk management and recovery processes as asset quality issues began to emerge. With loans falling out of favour, Federal Government securities were increasingly favoured, especially with yields in the teens for most of the year on both treasury bills and bonds.

Unlike prior to 2016 when MPC decisions varied and had a marked impact on banks, with minimal changes on the cash reserve ratios for both public and private sector deposits and the liquidity ratio, and the greatest impact of the implementation of the treasury single account was felt in 2015.

With the MPC seemingly having run out of tools to stimulate growth, attention is shifting to the fiscal. The expansionary budget is a positive in this regard. Banks will be hoping that execution of reforms being undertaken and capital programmes are carried out effectively before the sector can participate in any meaningful GDP recovery in 2017.

400,000 of our Accion Microfinance Bank (AMfB) customers have BVN – Accion Microfinance Bank (AMfB)

400,000 of our Accion Microfinance Bank (AMfB) customers have BVN – Accion Microfinance Bank (AMfB)

Accion Microfinance Bank (AMfB) has said that it is on track with regards to the July 31, deadline given by the apex regulatory body for Microfinance Banks (MfBs) operating in the country to enrol customers for the Bank Verification Number (BVN) exercise. In this interview, Managing Director/CEO, AMfB, Mrs. Bunmi Lawson, said that about 400,000 customers of the bank have BVN while also stating some of banks’ achievements.

WHAT is your bank doing about BVN July 31, deadline for MfBs

Even before the CBN made the BVN mandatory, AMfB has started requesting BVN from all our customers, we partnered with top commercial banks to get them to enroll our customers for BVN and we linked up with the Nigeria Inter-Bank Settlement System (NIBBS) to ensure we can verify those BVN and as at today almost 40,000 of our customers already have BVN and we are extending that to all savings customer. We are on track regarding that.

The CBN stability report showed that MfBs recorded a decline in almost everything in 2016, yet we see MfBs posting positive results.

The industry numbers is reflective of the total economy numbers, we are talking of a recession and that is the aggregate of all the actors in the economy, naturally the microfinance industry was also impacted. For us as a company, we beat the odds because of the strength of the company but it is quite a challenge to out-perform the larger economy in an outlandish manner. We recorded a modest growth whilst the industry was declining, we are happy with that but we are also quite expectant that the larger economy will return to growth because it is a partnership, we operate in the ecosystem.

What security measures have your bank put in place to mitigate fraud in the application of USSD in financial transactions

The USSD is working, I assure you, a lot of our customers have continued to use USSD and we believe more and more of them would. We would be rolling out to more customers. In terms of security, AMfB would always apply international standard. So all the requirements to ensure that the phones are secured and USSD strings are secured are put in place. We also advise our customers to password their phones so that even if it is stolen, they are not able to access those USSD, in the last one year we have not experienced any fraud.

The CBN investors/exporters window has recorded about 1.1 billion in transaction volume, have you started seeing a positive reflection of that in your business.

The various efforts by government in stabilizing the FX market are beginning to show early signs of improved acceleration of the economy and we pray it is sustained. We will do our active part and contribute our own quota to the growth of the economy. We look forward to other participants playing their role, so that together we can take the country to the next level. We see the early signs, we are quite optimistic that the economy will continue to go in the right direction.

Partnering to catalyse sustainable change

Partnerships from development sector organisations’ perspective Development sector organisations should take a more active approach in their role vis-à-vis financial institutions and service providers. The best opportunities often come from being “invited in” versus relying on cold calling with good ideas. This calls for a structured approach to positioning engagements, as well as a focus on brand building before engaging with financial institutions. Our research illustrates that development sector organisations should structure their support so that relationships are managed across interventions. This also implies engagement with a select number of financial institutions over time.

Development sector organisations need to balance several factors when considering how to engage service providers and what capabilities are required internally. This includes continuity, operational efficiency, procurement processes, in-house relationship management and subject matter expertise. Our research recommends that, instead of funding procurement of professional services at arm’s length, the development sector should ensure continuity e.g. by providing relationship managers to support continuity across interventions. This should be combined with in-house research capacity and subject matter specialists.

Recent research indicates that most partnerships between the private and development sectors primarily involve financial support, while knowledge sharing, capacity development and technical cooperation are secondary benefits. As development sector organisations consider private sector partners to promote sustainable financial development, it is important for financial institutions to understand the perspectives of different development organisations and the services they provide. Some of the questions to ask are: • Do the development objectives coincide with our commercial objectives? • Do internal processes within the development sector partner align with our change dynamics? • Do funding cycles and processes allow flexibility to adjust and extend projects as required by us? • Are we comfortable with supporting the required monitoring and evaluation processes? • Does the development sector organisation seek to partner on engagements that complement our internal capabilities? • Does the development sector organisation seek a long-term partnership, and does it have an approach that enables continuity?


How are development sector organisations see to successfully drive development through such services?

While financial services companies view change as a continuous journey that has to be balanced with ongoing operations, the development sector’s raison d’être is to drive change through targeted interventions with an end date. As a result, development sector organisations may not offer their support based in a way that is fully aligned to the institutions’ change dynamics. We identified two key challenges; change is less effective when supported via fragmented interventions, and many interventions do not integrate “change management” in the form of holistic impact analysis, stakeholder engagement and realistic implementation planning.

We found promising examples where the development sector organisation structures interventions in a way that focuses on long-term objectives and includes change enablement and stakeholder management. Specific projects can be delivered by different professional services providers, but a relationship management role by the development partner can ensure the continuity and change enablement that has typically only been available to larger institutions (where professional services firms invest in account management). In many cases, intervention support for larger banks goes through CSR departments. If the objective is to catalyse market development at scale, our research indicates that stakeholders from commercial operations need to become more involved.

Capacity building through the use of professional services

The role of professional services in supporting change In many cases, professional services can support organisations with successfully managing change. Our research examined professional services that support institutions in exploring new ideas; developing concepts and business cases; and designing the structures required to support and sustain change. Leading institutions typically have funding available and the experience to know when to ask for assistance. As a result, larger banks are seen to invest in services across the spectrum. Management consulting services in particular are generally in demand—both for strategic advisory services as well as product- and channel design within the business areas. Given the current strategic focus on core segments, prioritisation of funding is being driven away from efforts to develop products that cannot promise near-term profits. As a result, there is tendency to under-invest in management consulting support to develop business models aimed at entry-level segments.

A surprising finding, perhaps, is the demand for premium strategy consulting services from many mid-tier institutions. This is driven by a need for support in their diversification into new segments as well as what appears to be a momentum effect, where institutions want to ensure they get the same level of advice as the competition. With concrete projects, organisations clearly acknowledge skills gaps to support IT systems and technology development, but tend to under-invest in consulting support for such projects.

As a consequence, sound strategic plans risk not being successfully implemented due to a lack of detailed design, implementation planning and alignment of the supporting organisation. Successfully structuring the support from professional services It is important to understand the link between long-term relationships and individual projects. Leading institutions have a stable demand for external support and typically work with several large consulting firms. Within the consulting firms, this justifies investment in dedicated account management. Senior executives are available to the institutions across specific engagements, and in many cases have the ear of the institution’s executives as trusted advisors. This brings along several benefits to both parties. Mid-tier institutions often procure smaller engagements to be conducted over shorter timeframes. This implies that the consultants are usually not around long enough to fully understand the context and engage with the organisation. As a result, there is a risk that results are not well integrated and that the organisation is not able to drive actions based on recommendations.

Driving change in the Financial Sector

Nearly all the institutions interviewed have a process for annual strategic planning, but there are fundamental differences in how institutions go about reviewing trends and data, what the output of the strategy is and how it is converted into concrete action plans to be implemented. There is a tendency in many organisations for strategic planning to stay within the status quo rather than addressing disruptive opportunities. Organisational elements like project governance, performance management structures and leadership styles also affect the ability to drive effective change.

Accenture’s change framework was used FIGURE 5. Organisational change framework to evaluate different approaches to change between leading and mid-tier institutions across Strategic Planning, the Project Lifecycle, Change Enablement & Integration, and Leadership capabilities.

They have less focus on challenging status quo or exploring fundamentally new and innovative opportunities. • In many cases a “bottom up” process prevails, where executives describe their departments’ actions within broader corporate themes. • CSR strategies are often made on the side of core business.

• Product-driven operating models and a focus on large-scale near-term returns, making it difficult to commit to new business models. • They have bias towards existing customers, making it difficult to develop products that are relevant to new segments. • The focus on scale often results in “big bang roll-out” vs. the iterative process of “try, fail, learn, scale”

• C-level team tends to plan strategy “top-down” in joint sessions. • Many banks have a stronghold in one or two segments, but follow market trends driving diversification into new segments.

Understanding the financial sector

The continent’s economies are continuing to expand at a rapid pace and have demonstrated resilience to both internal and external market shocks. The financial sector, in turn, is responding to the region’s continued economic success. While large portions of African adults continue to be denied access to the formal financial system, accelerated growth towards inclusive financial systems is promising.

The recent advances in mobile telephony, cloud computing, social media and data analytics have enabled the development of entirely new business models. Sub-Saharan Africa is on the leading edge of many of the abovementioned digital disruptions. The financial sector is especially vulnerable to these disruptive forces, but traditional institutions have been slow to adapt to these disruptive trends and are facing tough strategic decisions. In growth markets such as Kenya and Tanzania, many banks are diversifying into new segments, expanding branch networks and launching mobile money platforms to remain relevant in the marketplace. In more mature markets, leading banks such as South-Africa’s “Big Four”, have worked to solidify and defend their positions of strength in existing customer segments. In many ways, this re-entrenchment has negatively impacted financial innovation. In addition to the economic drivers of change, there are company-specific and structural factors that affect change in financial institutions. In order to understand how priorities are driven in an organisation, it is important to keep in mind the relative power of business areas. Most of the institutions reviewed were found to be product-oriented in the sense that product units are profit centres and are ultimately responsible for delivering revenue and profitability. As a result, customer segments are often seen to have less impact on budgets, and priorities are driven towards the largest revenue contributors within each product unit.


Nigeria’s banking industry has faced a turbulent macroeconomic environment

Nigeria’s banking industry has faced a turbulent macroeconomic environment recently, with strong headwinds that have generally impacted industry profitability and performance. However, the banking industry has demonstrated a reasonable level of resilience and the macroeconomic shocks have had little impact on the overall stability of most banks who have maintained strong prudential fundamentals.

The recent strong headwinds faced by Nigeria’s banking industry can be attributed to oil price shocks and its implications on Nigeria’s economic activity which has slowed significantly from 6.2 percent growth to a forecast of negative growth of 1.8 percent in 2016 (IMF). Responses by the government include withdrawal of public sector funds (which is a source of low cost deposit and contributed 4.25 percent to the overall deposit base of banks) and delayed flexible exchange rate policy impacted the banking industry significantly with overall industry return on equity falling from 20.3 percent to 11 percent.

Furthermore, gaps in the supply and lack of liquidity in the foreign exchange market (resulting from the lower oil price and the Central Bank response) has also significantly slowed trade and transaction banking volumes and adversely impacted the related income for the banking industry. The industry’s performance has been affected by the crystallization of non-performing loans and elevation of cost of risk from the significant exposure (about 25 percent of total industry loans) to the oil and gas sector as well as other sectors impacted by the economic downturn. In response to this threat to their profitability, the banking industry has implemented various tactical initiatives to reduce cost on channel and staff rationalization as applicable.

However, sustainable growth and liquidity is dependent on growing the customer base, especially in the retail space. Demand for optimal service delivery is now a critical pillar of the banking industry as customers have become more conscious of their rights and are leveraging social media platforms to express dissatisfaction. This heightened demand and sophistication of customers, coupled with the Central Bank’s increased focus on fair treatment, makes customer service a critical requirement for success in the Nigeria banking space. The banking industry is expanding its drive for financial inclusion, aided by an improved regulatory framework which addresses agency banking requirements as well as increased leverage of mobile money platforms. The banking industry has also embraced digital innovation with the continuous introduction of additional channels and processing platforms to improve convenience and turnaround time for transactions.

Given the evolving macroeconomic and market environment, it is clear that success in Nigeria’s banking industry will largely depend on the capacity of players to compete in the retail and the small-to-medium enterprise (SME) segments of the market. Nigerian banks will need to remain innovative and adopt a number of key initiatives such as scenario-based strategic planning and data and analytics to enable them address future uncertainties, deepen share of wallet of their existing customer base and ultimately continue to differentiate themselves in their market.



Value for money

Pricing of interest rates and fees may not be the primary driver of differentiation in Africa, but customers certainly expect to get value for the money they pay their banks. While customers report slightly higher levels of satisfaction with bank charges and fees than they did in the past, our survey shows that a significant proportion of banking customers continue to harbor deep dissatisfaction with the fees and charges they pay.

Customers and social activists are clearly concerned about high bank fees and interest rates. “No Banking Day” in Nigeria in early 2016 may not have disrupted banking operations, but it certainly influenced the perception that customers may not be getting value from their banks. Similar actions have catalyzed regulatory and policy change in other markets. For example, in Zimbabwe, public pressure has pushed the Central Bank to negotiate lending rate caps with the Bankers Association of Zimbabwe. Nigeria’s banks recently completed a regulated process of phasing out their Commission on Transaction (COT) charges. In South Africa, protests by the Economic Freedom Fighters and loud complaints about ATM charges by local customers has led to a recommendation that all ATM fees must be clearly stated and agreed upon for each transaction at the terminal.

While value for money may draw significant attention from politicians, social activists and regulators, our survey suggests that Africa’s banking customers are not as concerned about pricing when selecting their banks. In fact, just 7.5 percent of our respondents across Africa said that pricing was their biggest consideration when deciding whether to maintain their existing banking relationship.

This does not mean that Africa’s banks can set their costs or rates with impunity. Almost four-fifths of our respondents said that the cost of maintaining their account was a highly important factor when assessing customer satisfaction. Across Africa, only around 60 percent of customers voiced any level of satisfaction with the cost of maintaining their accounts, suggesting that many of Africa’s banks could be addressing customer satisfaction concerns through improved customer segmentation and pricing strategies.

Customers reported higher concerns about the interest rates they receive on deposits and investment products. Eighty-one percent said rates were highly important to their level of customer satisfaction, yet just 58 percent voiced satisfaction with the rates they receive. Customers in Zimbabwe, Senegal and Sierra Leone returned the highest levels of dissatisfaction with the rates they receive on deposits and investment products.



Retail banking channel in Africa

Branches may still be the most popular retail banking channel in Africa, but there are clear and growing signs that Africa’s banking customers are rapidly moving towards alternate channels. The challenge for Africa’s banks will be to increase adoption of existing channels while exploring new ways to meet their customers on their own terms.

On face value, one could be excused for thinking that Africa’s banking customers are highly loyal to traditional channels. Branches are still the most used channel across Africa (98 percent say they use the branch to conduct banking business) and more than two-thirds of Africa’s customers admit to never having used POS terminals, internet banking, mobile banking or mobile payments. Dig a little deeper, however, and it starts to become clear that Africa’s banking customers are on the cusp of a metamorphosis towards rapid adoption of alternate channels. Branch use and ATM use are on the decline (albeit marginally) since our survey in 2013, suggesting that Africa’s banking customers are now starting to move towards ‘cashless’ payments.

At the same time, the use of internet banking, mobile banking and mobile payments has risen significantly. Reported use of mobile payments increased 18 percentage points since our survey in 2013; internet banking usage increased by 8 percentage points; and mobile banking increased by 6 percentage points. While access to high-quality alternate channels varies across the region, access is not the primary challenge for Africa’s banks. More than two-thirds of Africans have a mobile phone and more than a quarter have internet access. African consumers are happy to use their mobile phones to send important messages and buy goods but have yet to transfer this confidence to mobile banking or payments in the same way.

Significant benefits can be achieved by driving adoption of alternate channels. For banks, the shift to alternate channels reduces costs, improves turnaround time and alleviates pressure on branch resources – all of which helps enhance customer satisfaction. Today, more than two-thirds of Africa’s banking customers say they prefer to use the branch to conduct funds transfers; around half say they use the branch to conduct balance enquiries and bill payments, all of which could be conducted more efficiently and at lower cost through digital and alternate channels.

Ultimately, this data suggests that Africa’s banks could achieve significant improvements in margins and customer satisfaction by investing in customer education and alternate channel promotion. Customers using their phones to text while standing in queues at the branch are prime candidates for ‘on site’ conversion schemes while urban customers could be attracted by reduced fees and preferred interest rates.

At the same time, however, our data also suggests that Africa’s banks could be doing more to reach out to their customers through more popular channels such as social media. Indeed, 56 percent of respondents to our survey said they use social media at least once per week, yet just 4 percent said they interact with their bank over social media as frequently. Almost 80 percent said they had never interacted with their bank on social media. Clearly, Africa’s banks face a massive opportunity to develop a highly differentiated customer proposition – one that delivers a consistent experience across the various channels and focuses on building relationships through channel interactions rather than simply ‘selling’ products and services

Top focus areas for analytics in banking

  1. Relationship-based product and fee price optimization
  2. Customer churn reduction
  3. Client prospecting
  4. Portfolio risk monitoring and management
  5. Branch sales effectiveness and cross sell
  6. Commercial RM sales lead generation
  7. Retail and commercial card analytics
  8. Extended services analytics and needs
  9. Next best product identification
  10. Fraud prevention and security checks

We believe that – to effectively manage and analyze customer data – Africa’s banks will need to: • Build a long term data strategy that is deeply rooted in the long term business and customer strategy goals of the bank. The data strategy should support specific business outcomes and focus on finding the data required to reach the goals.

Get the right high-quality data to the business in a fast, flexible manner. Business and IT must work closely together to develop processes that enforce the capture of quality customer data upfront and not as an after-thought. • Develop systems and capabilities that aggregate data across business lines to create a single view of the customer. • Overcome internal obstacles by managing, measuring, and compensating employees based on how well they use relevant data to make business decisions and drive business outcomes.

While the digitization of banks and the availability of sophisticated analytics tools has now made it possible for banks to gain unique and valuable customer insights, banking executives will need to think carefully about what capabilities, culture and infrastructure they will need to move from data to analytics to value. To start, Africa’s banks could be taking a number of immediate steps to capture greater value from their customer data – from identifying customer data gaps and building a ‘single view’ of the customer through to improving the quality of data and creating centralized Centers of Excellence for customer analytics that cut across Marketing, IT and Finance.

Tapping customer data to drive growth: A South African Perspective

Tapping customer data to drive growth: A South African Perspective

As banks across Africa start to roll out increasingly sophisticated digital channels and systems, many are starting to explore how they might use their increasing wealth of data to create sustainable growth and improve efficiency. Rightfully so: banks around the world are already finding increasingly valuable ways to apply analytics across their organizations and – in doing so – are creating unique competitive advantages.

Focus on the customer :

Our experience suggests that many banks may be missing significant growth opportunities that could be achieved by consolidating all of the different ‘nuggets’ of customer data at their disposal to create tangible and actionable insights about their customers. Customer analytics can drive significant benefits for Africa’s banks. A well embedded customer analytics capability could, for example, enable the bank to target the right customers during marketing campaigns, maximize cross/up sell opportunities, improve customer satisfaction and reduce churn and fraud cases. Many banks are also starting to leverage customer analytics to identify who their most valuable customers are, how they behave and how best to retain them and attract others. It is allowing for the provision of real-time, individualized service at every stage of customer interaction: marketing, acquisition, cross-sell, service, and retention. The more sophisticated banks are now starting to apply ‘predictive analytics’ approaches to their customer data to capture more forward-looking insights that go beyond analyzing events that happened in the past to instead start to predict what events will happen next and, in doing so, better inform their decision-making.

The battle for the customer

Recent research by KPMG International suggests that few banks around the world fully understand the value that data and analytics can provide in terms of customer insights and richer customer experiences.1 Unfortunately for the banking sector, there are organizations like Google and Facebook that do understand the value of customer insights and they are keen to use this knowledge to create new banking propositions that deliver exceptional customer experiences. Both organizations have already launched successful money remittance services, largely by creating an unprecedented view of customer preferences by aggregating search, social media and financial transaction data. Simply put, customer insights are driving the next wave of competitive advantage and banks will therefore need to go beyond merely understanding the needs of their customer across the various touchpoints to ensure they can also anticipate and rapidly respond to those needs.

How can Nigerian banks start to improve internet banking penetration?

1. Improving the customer experience • Reinvigorate and refresh the bank’s web assets to prioritize ease of use, navigation and visual design; aim to simplify the number of steps to complete a transaction or add more robust capabilities that respond to their customers’ technological sophistication. • Introduce improved functionality targeted to specific customer segments such as corporate customers or SMEs who are particularly focused on security and the need for customized financial reporting and access to reliable, real-time financial data. • Harness employees as channel ambassadors and customer experience experts; banks should be encouraging their own employees to use online banking and suggest opportunities for improvement.

2. Reinforcing customer trust • Enhance customer awareness and online literacy by promoting greater awareness of online security through the various online banking touch points; banks must assure customers that every precaution has been taken to ensure the security of their funds while also explaining the importance of keeping access details safe. • Improve response time to fraud complaints; just 6 percent of survey respondents from Nigeria reported an experience of fraud but more than half of those said it took more than two weeks to resolve their case.

3. Ensuring customer accessibility • Provide 24 / 7 access to online platforms; focus on deploying the right monitoring tools to ensure 99 percent uptime on the online banking platform and allocate responsibility for uptime to specific staff members or teams. • Review the costs and fees associated with online banking platforms to ensure that they are reasonable in comparison to alternative options; make sure that cost does not become a barrier to online banking. While customer adoption of online channels may be slower than expected in Nigeria, it is also clear that momentum is already picking up. We believe that webbased banking will soon prove to be a lucrative brandbooster for those banks able to iron out the kinks and educate customers about the convenience and security of online banking.

While Africa’s retail banking customers clearly want better service quality, they also want better transaction processing times and information accuracy. As financial literacy programs drive heightened expectations around the information banking customers should receive, Africa’s banks will need to increase their focus on delivering fast, accurate and timely transactions across all of their customer channels. For many, this will require more than just new technology and tools, it will also require processes to be streamlined and optimized.

Second only to the quality of customer service, Africa’s banking customers care deeply about the speed, accuracy and completeness of their banking transactions. In fact, in 7 of the 18 countries surveyed, customers ranked executional excellence as the most important factor influencing their overall satisfaction with their banks. In particular, customers attributed the highest importance to the accuracy and completeness of the information (such as bank statements, advice slips and the calculation of bank fees) they receive from their banks. Yet while almost 90 percent of customers said they believed this aspect to be important or very important, only around a third of all customers voiced a high level of satisfaction in this area. Customers also seem concerned about the transparency of fees and account costs. “They make all the promises in the world to you, but as soon as you take the facility you start to see hidden charges that you were never told about,” noted one respondent. While regulators across the continent have certainly made significant strides – often supported by Customer Protection Regulation – banks will need to continue to take the lead in promoting fairness, transparency and responsibility. The reality is that customers are increasingly aware of their rights and bad perceptions can quickly become bad publicity.

Encouraging the shift to internet and mobile banking: A Nigerian perspective

Nigerians love the internet. The country is estimated to have more than 148 million mobile telephone subscribers and at least 92 million of them access internet data services on their devices. And, with around one-third of Nigeria’s population now under 24 years old and a growing middle class population, all signs suggest that internet penetration and usage is set to grow significantly.

In particular, social media channels are gaining significant adoption in Nigeria. Platforms such as Facebook, Instagram, Twitter, LinkedIn and Tumblr are widely used by Nigerians as a way to communicate with friends and the wider public. In fact, according to our survey, 77 percent of Nigeria’s banking customers now use social media for personal purposes.

The problem is that Nigeria’s banks have largely failed to translate this passion for the internet and social media into increased adoption of internet and mobile banking solutions. Just 42 percent of Nigerian banking customers said they use online banking platforms for one or more banking activities. And just 40 percent said they have interacted with their bank using social media in the past.

The benefits of shifting transactions to web-based platforms are clear. For customers, web-based platforms offer convenience, 24 / 7 access, and freedom of location. For Nigeria’s banks, the shift promises the opportunity to improve service delivery and achieve a lower cost-to-serve.

So why are Nigeria’s banks struggling to move customers to internet and mobile banking platforms? Nigeria’s banks have certainly put significant investment and effort into developing a better and easier online banking system. And Nigeria’s customers have certainly proven themselves to be internetsavvy.

Part of the problem relates to conversion. More than two-thirds of Nigerian banking customers say they have never tried their bank’s online platform. So while Nigerian banking halls are often filled with customers happily using their phones to text, chat, browse and shop online, just one-in-three of them have ever considered using that same device to avoid the banking hall altogether. Introducing these customers to alternative channels should be a top priority for Nigeria’s banks.