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Retail banks looking to increase market share in Africa

Building the relationship Retail banks looking to increase market share in Africa will need to find ways to delight their customers. According to our survey, banking customers across most of Africa remain with their banks because of the level of customer service they receive. But they will also leave their bank if they feel they will get better customer service elsewhere. Clearly, customer service has become a key point of competitive differentiation for Africa’s banks and their customers.

Excellent customer service is key to success in Africa’s banking sector. Indeed, whereas just three years ago, banking customers said that the financial stability of their bank was the top reason they were maintaining their banking relationship, today’s banking customers are clearly more focused on the service they receive from their bank.

It is worth noting, however, that while financial stability fell into second place as a primary reason for maintaining a bank account, it remains a key factor for almost a quarter of Africa’s banking customers. In fact, the percentage of those that cited financial stability as a factor rose by 2.5 percent between 2013 and 2016 suggesting that – in some markets – more will need to be done to strengthen the banking system.

In part, the shift away from financial stability reflects the growing strength of Africa’s banking markets and regulation. But it is also being driven by increased awareness of customer rights (largely the result of successful national financial inclusion programs) and greater competition between players. At the same time, Africa’s diaspora and business travelers are returning home with increased expectations of their banks based on their international experience.

This points to a valuable opportunity for Africa’s banks to differentiate themselves based on excellent customer service which, in turn, should allow them to increase market share and improve loyalty amongst existing customers. In fact, of customers that said they were contemplating changing their banks, almost a third said it was because of service quality.

As Africa becomes more integrated into the global business environment, Africa’s banks will need to start adopting customer service approaches now in use at many international and foreign banks. First Direct and Santander Banks, for example, have a relentless approach to delivering outstanding customer service across all of their touchpoints.1 Banks in Nigeria are following suit with many now implementing a ‘meet and greet’ policy where customers are warmly received at the branch and quickly attended to.

Banks in Tanzania, Burundi, South Africa, Angola and Ghana should be particularly focused on improving customer service, as customers in these markets were the most likely to cite excellent customer service as a key differentiator when choosing a bank. And in total, 12 of the 18 countries included in our survey rated excellent customer service as the most important reason for maintaining a banking relationship.

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