banking survey

8/12/2019 banking survey

1/17

Alternative Channels:

Building an optimal channel

delivery strategy

2011 Banking IndustryCustomer SatisfactionSurvey


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Contents

Foreword

Scope and Methodology

The Customers ExperienceThe Alternative Delivery Dilemma

Conclusion

1

2

410

13

2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of

independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity.

All rights reserved. Printed in Nigeria.


3/17

Be everywhere, do everything, and

never fail to astonish the customer.

I am delighted to welcome you to the 2011 and 5th edition of the KPMG Banking

Industry Customer Satisfaction Survey.

As banks are undergoing a dramatic shift in their governance and operating models in

order to align with regulatory demands and competitive realities, new technologies are

quickening the pace of change, allowing financial institutions to embark on a journey

towards integrated delivery channels. For the serious industry players, the addition of

powerful customer knowledge systems will provide the much needed impetus that

will facilitate the consistency of the customers experience across the various delivery

channels available to banks customers.

Against the backdrop of the recent regulator-led reform interventions, Nigerian banks

continue to grapple with multiple regulatory compliance issues. These issues,

occurring amidst the struggle for survival on the war on recoveries, seem to have

moved customer service to the backburner.

This year, our results show a decline in the overall customer satisfaction index across

all customer segments which may be indicative of the perceived reduced attention

that customers received from their banks. In this edition of the survey, we have once

again expanded the scope of the survey by increasing the number of respondents

across all customer segments and locations in Nigeria (i.e. about 8,000 retail, 1,100

SME and 450 commercial/corporate respondents across ten (10) locations nationwide)

and have gone a step further to assess the satisfaction levels of banking customers in

Ghana.

In conclusion, it is pertinent to note that this year (as in previous years), financial

stability and the banks image and reputation continue to feature as the key reasons

why customers maintain banking relationships.

We hope that this initiative will continue to spur Nigerian banks to go the extra mile in

their quest to render superior customer service.

Adebisi Lamikanra

Partner, Performance and Technology

1Foreword

Macy's Motto




Page 1Banking Survey Issue 5


4/17

The 5th edition of the KPMG Banking Industry Customer Satisfaction Survey (BICSS)

focuses on assessing the performance of banks in providing value and satisfying their

customers, particularly through the use of alternative delivery channels.

In this years survey, to ensure a more refined assessment of customer satisfaction overall

and provide respondents with a wider range of response options, the rating scales used to

measure satisfaction and importance levels were increased from a 5 point scale to a 7

point scale and from a 4 point scale to a 5 point scale, respectively.

As is the usual practice, selection of respondents in the Commercial/Corporate segments

was driven by the need to ensure the inclusion of the leading companies in each of the

major business sectors. Sampling was based on KPMGs internal database of formal

business establishments as well as the most recent copy of the top 500 Companies in

Nigeria (2010 Goldstar Publications).

For the Retail and SME segments, in determining the respondents to be sampled,

important factors like the commercial activity and location were considered. For these

segments, customers were sampled across ten (10) locations country-wide; Aba, Abuja,

Benin, Ibadan, Kaduna, Kano, Lagos, Maiduguri, Onitsha and Port-Harcourt.

In each of these locations, Retail/SME respondents were randomly selected from high

density/ traffic areas like shopping malls, markets, university campuses, residential areas,

state and federal secretariat complexes, business offices, etc.

The survey targeted a minimum respondent number/ size for each of the 24 banks; and as

a result of inadequate responses, four (4) banks were excluded from the ranking.

A similar survey approach was also adopted for assessing the customer satisfaction level

of corporate customers in Ghana.

Figure 4: Corporate Respondent Demographics: Analysis by Industry




2Scope and Methodology

N250m-N1b24%

Greater than

N10b13%

N5b-N10b

7%

Less than

N250m29%

N1b-N5b27%

Limited Liability

Company25%

Non Governmental

Organisation9%

Sole

Proprietorship53%

Limited Liability

Partnership11%

Others

2%

Civil/Public

Servant

27%

Private

Sector

Employee

23%

Self-

Employed

24%

Student

25%

Others

1%

Figure 3: Corporate Respondent

Demographics: Analysis by Turnover

Figure 2 SME Respondent distribution-

Analysis by Establishment Type

:

Figure 1: Retail Respondent distribution -

Analysis by Occupational Category


No of Respondents

8

13

15

15

20

21

22

24

25

26

31

31

32

41

48

69

0 25 50 75

Agriculture

Embassies/Multilaterals/Foundations/NGOs

Conglomerates

Trading

Real Estate and Construction

Media and Publishing

Airlines and Hospitality

Healthcare and Pharmaceuticals

Food, Beverage and Tobacco

Educational Institutions

Services (Professional, Engineering e.t.c)

Transport and Logistics

ICT and Telecoms

Oil and Gas

Manufacturing

Non-Bank Financial Services Institutions


5/17





How You Should Read and Interpret this Survey Report and its Findings

In reading this report, you should bear the following factors in mind:

1. This is a perception study

This survey focuses on the perceived quality of customer service delivery by the banks from thecustomers perspective (Retail, Corporate/Commercial and SMEs).

This survey does not represent the opinion of KPMG on the skills, capabilities or performance of any of

the banks covered in the survey.

KPMG conducts the survey, but findings represent the opinions of the customers of the banks.

KPMG is responsible for defining the survey questionnaire administered to the respondents.

This survey does not seek to establish anything as absolute fact (as perceptions are by definition

subjective), but to report upon on the feelings and broader perceptions of customers with respect to

services provided by their banks. The rankings are solely based on the feedback received in the survey.

2. Perception is never balanced or fair, but the study always has a representative sample size

Banks rated in the survey vary by size, service offerings and customer profile. Respondents in the survey

are asked to rate their banks on a selection of key criteria; customer care services, product/service offering,

transaction methods and systems, convenience and pricing.

The minimum number of respondents required for each bank in the survey guarantees that the bank ratings

reflect the opinion of a representative customer group and not the opinions of individuals.

3. Banking Industry Customer Satisfaction Methodology

The overall methodology adopted in calculating the customer satisfaction index (CSI) remains the same as

with the previous editions and is as depicted in the diagram below.

Figure 5: Methodology for Computing Customer Satisfaction Index CSI

Pricing

Convenience

Transaction Methods & Systems

Product/Service Offering

Measures product range &

appropriateness to customers needs

Measures customer support processes/

systems & turnaround time

Measures accessibility & quality of

service from delivery channels

Measures fees, charges and rates on

products

Overall Score CSI

Customer Service FactorsRatings -

Satisfaction (S)& Importance (I)

WeightedScore

PerceivedValue

S I (S x I)/


6/17

Figure 7: Top 10 Most Customer Focused Banks - Retail

Customer Satisfaction Index (%)

68 69 70 71 72 73 74 75 76

First

Bank

Intercontinental

Bank

Equitorial

Trust Bank

Skye

Bank

Access

Bank

Diamond

Bank

Fidelity

Bank

Stanbic IBTC

Bank

GTBank

Zenith

Bank

69.38

The Customer's Experience

Interestingly, for the first time, Equitorial Trust Bank is featured in the top ten, as Skye

Bank returned to the list after dropping out last year. First Bank was the other entrant

to the list at 10th position, with a CSI of 69.47.

On an overall basis however, there was a general decline in average customer

satisfaction levels from 71.91 (in 2010) to 69.38 this year. Although Zenith Bank secured

the top position this year, its overall CSI was 2.51 less than that of the industry leader

last year.

Industry Service Leaders

Retail customers nationwide assessed satisfaction levels with their banks along the

five key service areas of Customer Care. Transaction Methods & Systems, Product and

Services, Pricing and Convenience. Zenith Bank was ranked 1st in the Customer Care,

Transaction Methods & Systems and Convenience while GT Bank was ranked 1st inthe Product/Service Offering and Pricing.




This section analyses customers feedback based on their satisfaction with the servicedelivery and performance from banks. Key questions that this years survey seeks to

address include: Will the performance of banks in the area of customer satisfaction this

year be significantly different from previous years? Which banks have continued to

provide the most consistent customer experience over the last 12 months? Are

customers satisfied with the banks service delivery channels? The answers to these

questions and more will have far reaching implications for banks as they create their

service delivery strategies.

The result of this years survey has been very interesting as new names have emerged

in the top 10 list across the various customer segments.

Zenith emerges as the most Customer Focused Bank in the Retail Segment

Zenith Bank, with a CSI of 75.76, has secured the top position, ending the 3 year reign

of GT Bank in the Retail Banking space. GT Bank came second with a CSI rating of

73.99, while new entrant Stanbic- IBTC rounded up the top three position, with a CSI

rating of 72.57.

Location Bank

Aba Fin Bank

Abuja GT Bank

Benin Zenith Bank

Ibadan Zenith Bank

Kaduna Stanbic-IBTC Bank

Kano Zenith Bank

Lagos Zenith Bank

Maiduguri Stanbic-IBTC Bank

Onitsha Stanbic-IBTCBank

Port-Harcourt GT Bank

Figure 6: M ost Customer Focused Bank by Location:

Retail

3

75.8

74.0

72.6

72.2

71.8

71.2

71.2

70.1

69.8

69.5



7/17

Customer Service Areas(SME Segment)

Ranking

1 2 3

Customer CareStandard Chartered

BankDiamond Bank GT Bank

Produc t/Serv ices O ffering Stanbic - IBTC BankStandard Chartered

BankDiamond Bank

Transactions Methods andSystems

Standard CharteredBank

Stanbic- IBTC Bank Zenith Bank

Convenience Zenith BankStandard Chartered

BankDiamond Bank

Pricing Stanbic- IBTC Bank GT Bank Diamond Bank

Figure 12: Rank ing of Bank Perfor mance by Custo mer Service Areas -

Channels(Retail)

Ranking

1 2 3

ATM Zenith Bank GT Bank Skye Bank

Branch Zenith Bank Fidelity Bank Intercontinental Bank

Internet Banking Zenith Bank GT Bank Stanbic-IBTC Bank

Call Center Zenith Bank Stanbic-IBTC Bank GT Bank

Figure 9: Ranking of Bank Performance by Service Delivery Channels - Retail

Customer Service Areas (Retail

Segment)

Ranking

1 2 3

Customer Care Zenith Bank GT Bank Stanbic IBTC Bank

Product/Services Off ering GT Bank Zenith Bank Stanbic IBTC Bank

Transactions Methods and

SystemsZenith Bank Fidelity Bank GT Bank

Convenience Zenith Bank GT Bank Fidelity Bank

Pricing GT Bank Zenith Bank Access Bank

Figure 8: Ranking of Bank Performance by Custo mer Service Areas - Retail

Service Delivery Channel Champions

The assessment of service delivery channels was driven among others, by such factors as

proximity and accessibility, functionality and availability as well as overall quality of service

derived at the channel.Zenith Bank led in service del ivery, across all channels, with CSI ratings of 77.02, 78.82,

75.54 and 73.88 for the ATM, Branch, Internet Banking and Call Centre, respectively.

However, there was also a notable decrease in CSI scores across the delivery channels

when compared to the CSIs from the previous years survey, which may be indicative of a

general decline in customer satisfaction and/or high expectations by customers.

2011 SME Focused Banks

About 1,100 SME customers were sampled across ten (10) locations, nation-wide.

Standard Chartered Bank and Stanbic-IBTC Bank demonstrated a good showing in the

SME segment across the five (5) key service areas (i.e customer care, products/service

offering, transaction methods and systems and pricing), a situation which is a reversal of

last years result where GTBank and Zenith emerged as the SME segment champions.

Zenith Bank and GT Bank

Lead across MajorCustomer Service Areas




Standard Chartered Bankand Stanbic-IBTC emergeas clear leaders in theSME customer segment

SME



8/17

Customer Service Areas(Corporate Segment)

Ranking

1 2 3

Customer Care Zenith Bank FCMB GT Bank

Product/Services Off ering GT Bank FCMB Zenith Bank

Transactions Methodsand Systems

GT Bank Zenith Bank Standard Chartered

Convenience Zenith Bank GT Bank FCMB

Pricing FCMB Sterling Bank GT Bank

73 74 75 76 77 78 79

Skye Bank

UBA

Fidelity Bank

Diamond Bank

First Bank

Sterling Bank

Access Bank

FCMB

Zenith Bank

GTBank

Customer Satisfaction Index (%)73.71

Figure 12: Ranking of Bank Performance by Custo mer Service Areas - Corporate

Figure 11: Top 10 Most Customer Focused Banks - Corporate

GT Bank unmoved, retains leadership in the Corporate Segment

GT Bank emerged top on the list as the most customer focused bank of the corporate

segment, as it retained its position with a CSI of 78.07(a decline from last years CSI score

of 80.08) . In the same vein, Zenith Bank also maintained its 2nd position with a CSI score of

77.74 (representing a 0.52 decline from its score last year). FCMB came closely behind

Zenith Bank to clinch the 3rd position with a CSI of 77.41, equally retaining its last years

position

Sterling Bank and UBA made their debut into the Top 10 list for the corporate segment with

CSIs of 75.16 and 74.33, respectively.

GT Bank, Zenith Bank and FCMB lead the pack across all service areas

GT Bank and Zenith Bank both led the pack in four different service areas. GT Bank led the

Products/Service offering and Transaction Methods and Systems areas while Zenith bank led

Customer Care and Convenience service areas. FCMB came 1st in Pricing.

Bank Ratings per Industry

This table summarises customer satisfaction ratings across different industries in the

corporate customer segment. Entities in the Airlines and Hospitality Industry appeared the

most satisfied, with a CSI score of 77.8, while Non-Banking financial services institutions

seemed the least satisfied with a CSI of 71.2.




GT Bank retains top

position as mostcustomer focused bankin corporate segment

78.1

77.7

77.4

75.2

75.2

74.9

74.7

74.6

74.3

74.1



9/17




Figure 14: R ationale for Maintaining Banking Relationship: Corporate/C ommercial

Figure 15: Rationale for M aintaining Banking Relationship: Retail/SME

Figure 13: Rating per Indust ry Corporate/Commercial

Reasons for Maintaining Banking Relationships

This year, Financial Stability emerged as the most important factor in deciding on the

choice of a bank. Financial stability displaced Excellent Customer Service as the key

rationale for maintaining banking relationship in the retail customer segment. Given the

recent turmoil in the industry it is not surprising that financial stability is now tops; it was

also a key factor after the last major point of inflection in the industry i.e. the industry

consolidation era.

8.4%

9.6%

10.2%

13.1%

16.0%

16.6%

5% 10 % 15 % 20 %

Financial Stability

Customer Service

Image and Reputation

Proximity and Accessibility

Credit Processing

Full Range of Financial Services

Parent company Affiliate

Alternative Banking Channels

Pricing

Rating Frequency


8.5%

8.7%

8.9%

Financial Stability

Image and Reputation

Customer Service

Access to credit

Proximity and Accessibility

Access to ATM and Other

Channels

Pricing

Rating Frequency5% 10% 15%

Airlines and Hospitality

Manufacturing

Healthcare and Pharmaceuticals

Transport and Logistics

Conglomerates

Embassies/Multilaterals/Foundations/NGOs

Real Estate and Construction

Oil and Gas

Educational Institutions

ICT and Telecoms

Trading

Services (Professional, Engineering e.t.c)

Media and Publishing

Food, Beverage and Tobacco

Agriculture

Non-Bank Financial Services Institutions 71.2

72.6

73.1

73.9

73.9

74.8

74.8

75.7

75.7

75.9

75.9

76.2

76.8

77.0

77.4

77.8

68 70 72 74 76 78 80

10.9%

13.7%

Financial stability is theprimary reason formaintaining banking relationsacross all customer segments

11.0%

11.8%

12.2%

13.1%

13.1%


10/17

64

65

71

72

91

98

148

191

208

209

50 100 150 200

FCMB

Skye

Bank

Oceanic

Bank

Intercontinental

Bank

Diamond

Access

Bank

UBA

First Bank

GT Bank

Zenith Bank

Rating

Frequency

Figure 16:

Top

3

Customer

Buyer

Values

by Segment

Figure 18:

Top

10

Frequently Rated

Banks: SME

Figure 19: Top 10 Frequently Rated Banks: Corporate

Customer Segment1 2 3

RetailMinimal

transaction

waittime

Feedback

resolutionsystem

ATM services

SMEMinimal

transaction

wait

time

Feedback

resolution

system

Competitive

interestrates,

fees

and

charges

CorporateCompetitive interestrate, fees and charges

Timely and accuratetransaction processing

Improved relationshipmanagement

Service Expectations

To derive quick wins in satisfying retail and SME customers, banks need to focus on the speed of

their transaction processing as this segment of the market value speedy transactions and minimum

wait times. Corporate customers on the other hand, are cost conscious and therefore value

competitive rates, fees and other charges.

Key Buyer Values

GT Bank and Zenith Bankemerge as the mostfrequently rated banks inRetail/SME andCorporate/Commercialrespectively




Frequency of Bank ratings per segment

The frequency of ratings per bank is an indication of the bank's market reach or share of the

customers mind. GTBank is the most rated bank by the retail and SME segments, while Zenith Bank

is the most frequently rated bank in the corporate segment.

GTBank

UBA

Oceanic Bank

First Bank

Intercontinental Bank

Bank PHB

Zenith Bank

Skye Bank

Diamond Bank

Fidelity Bank

200 400 600 800 1000 1200 1400 1600 1800

Rating Frequency

GTBank

First Bank

UBA

Oceanic Bank

Intercontinental Bank

Zenith Bank

Fidelity Bank

Diamond Bank

Bank PHB

Skye Bank

50 100 150 200 250

Rating Frequency


213

209

205

168

143

128

84

83

78

67

17:

Top

10

Frequently Rated

Banks: Retail

Figure

1696

1346

1024

976

923

531

529

522

492

311


11/17

Page 9

CustomerService

Areas

(Ghana)

nking1 2 33

CustomerCare CAL

Bank

Merchant Bank Ghana

UBA

Product/Services

Off ering GT

Bank Stanbic

Bank

Zenith Bank

Transactions Methods

and

SystemsZenith Bank UBA

Amalgamated

Bank Ltd

Convenience UBA Zenith Bank Stanbic Bank

Pricing Zenith BankMerchant Bank

GhanaStanbic Bank

70 72 74 76 78 80 82 84

Barclays

GCB

CAL

GTB

SCB

ECO

UBA

MBG

Stanbic

Zenith

Abbreviation Banks

Figure 22:

Top

10

Most

Customer

Focused

Banks

-

Ghana

Figure 20:

Ranking

of Bank

Performance

by Customer

Service

Areas-

Ghana

Nigerian Banks lead service performance in Ghanas Corporate Market

For the first time in the survey, the scope included banks in Ghana and addressed the

Corporate/Commercial banking segments only. Our results show a strong performance of

Nigerian banks across four out of five customer service areas. Zenith Bank, GT Bank and

UBA dominated the top 3 positions across the service areas, emerging on the list of Top

10 most customer focused banks for the corporate clients. Zenith Bank was 1st with a

CSI of 82.03; while UBA and GTBank clinched the 4th and 7th positions respectively.

Zenith, UBA and GT Bankemerge in the Top 10 MostCustomer Focused Banks-

Ghana

82.0

80.7

80.4

79.1

77.3

76.0

75.9

74.4

74.1

73.0




Figure 21: Abbreviation of Top 10 Most

Customer Focused Banks in Ghana

Zenith

Stanbic

MBG

UBA

ECO

SCB

GTB

CAL

GCB

Barclays

Zenith Bank of Ghana

Stanbic Bank

Metropolitan Bank Ghana

United Bank of Africa

Ecobank Ghana

Standard Chartered BankGhana

Guaranty Trust Bank Ghana

CAL Bank

Ghana Commercial Bank LTD

Barclays Bank of Ghana

Banking Survey Issue 5


12/17


13/17




Excellent firms don't believein excellence only in constantimprovement and constantchange

Tom Peters

Article : e-Payment: Boosting transactions on PoS

terminals in Nigeria, By DAYO OKETOLA,Sunday, 16 Jan 2011

Economist Intelligence Unit.

I.

II.

Building an optimal channel delivery strategy

The Alternative Delivery Dilemma

Page 10

4

Banking Survey Issue 5

Twenty years ago, banking was generally brick and mortar based. The norm was the queue line by

the counter with convenience seating for the long wait to pay in the branches. There were over 90

banks providing largely wholesale banking services with fewer large retail banks. A few banks had

deployed ATMs, first of which was installed in 1989 for Societe Generale Bank. Today, that norm is

long forgotten. With the growth in retail banking and the consolidation in the banking industry,

customer service and transaction channels have crafted a new normal for customers expectations

of service.

The Evolution

The deployment of alternative channels by Nigerian commercial banks has grown astronomically

over the last five years. With just 500 ATMs in 2006, the numbers have grown to 9,000 ATMs and

13,000 POS by the end of 2010, supporting electronic transactions of over N81 billion monthly!

After the banking consolidation in 2005, and the accompanying explosion in customer acquisition,

most banks began to aggressively deploy branches in major cities to meet the banking needs of the

growing customer base. Today, escalating costs associated with securing the right location, setup

and maintenance, as well as the daunting task of obtaining approvals required for branch expansion

has led more banks to review their channel strategy with increased focus on customer migration to

alternative channels.

The clear logic behind this strategy is the continued need to drive down the operating costs

associated with more expensive channels such as brick and mortar branches as compared to lower

cost virtual channels like ATMs, POS terminals and internet banking. Furthermore, as customers

began to show a preference for palace-like branches, and branches became swamped with long

queues and dissatisfied customers, banks had no choice but to further develop and redefine

alternative approaches to serving the vast customer base.

Commercial banks began deploying their ATMs outside bank branches to decongest the banking

halls. The ATM expansion mantra extended to places where the retail customers spent money,

such as eateries, shopping malls, petrol stations e.t.c., among other off site locations. POS

terminals were also deployed to major merchants to promote non-cash payments, while the

internet banking portals with capability for account balance and fund transfers and account

notifications, became standard product offerings in the industry.

On the more revolutionary side, mobile banking has also been adopted, though not on a massive

scale, to facilitate payments, transfers and account transactions across banks. Banks are

increasingly refocusing their strategies on multi-channel banking architecture to cater to differing

customer segment needs as the more traditional services offered by branches have been

successfully duplicated using less expensive electronic channels.

Today, the alternative channel dilemma continues to stare many retail focused commercial banks in

the face. With huge investments in technology based channels including Contact Centres, a

swelling customer base and mounting customer dissatisfaction issues, banks need to more than

ever before, address the issues related to channels, decisively.

The fundamental question lingers.How do we deploy the right channel mix for our

customers in the most cost efficient approach whilst providing a satisfying experience at

each point?


14/17


The single most importantthing to remember about

any enterprise is that thereare no results inside itswalls. The result of abusiness is a satisfiedcustomer.

Peter Drucker




See King and Levine and Klapper, Laeven,

and Rajan

Balancing customer needs in retail banking distribution.

Thomas Andersson et al, McKinsey Quarterly/

III.

IV.

Having a clear channel strategy

Banks with significant number of retail customers need to define a clear channel strategy

which defines the approach, basis and methods of channel deployment and operations to

provide its customers with service. As with any strategy, it will necessarily include trade-offs,

expected results and approaches to address implementation issues that will surface. A clear

channel strategy will also clearly map the multiple channel interfaces to the service offerings

and provide a framework for uniform customer service experience across these channels.

Understanding the Customers Hygiene Needs

One of the fundamental areas that might have been overlooked by banks is the basic hygiene

factor that drive customer behaviour. The hygiene factor drives negative response, it is an

expected factor such that its presence might not drive improved satisfaction levels, but its

absence has significant impact on customer satisfaction.

Banks need to understand the mix of customers in their books. A basic approach would be to

dimension the customers based on age demographics. The older customers who were

familiar with the old norm of traditional banking are generally less predisposed to migrating

to electronic channels such as ATM and internet banking. Such customers expect to continue

to use traditional branch channels to drive their banking relationships. The younger customers

however are more comfortable with electronic channels and also largely intolerant of long wait

times in branch queues.

This younger generation, however, have a lower tolerance for complex or unfriendly interfaces,

unstable systems or long loading times. This makes them lean to the channels that provide

speed, ease of use and reliability.

Seizing the Mobile Opportunity - The M-PESA Experiment

The advent of mobile banking in Nigeria has come a long way, but is now coming of age.

Unlike most other channels, the penetration of the mobile phone has unprecedented uptake

as there are more mobile phones in Nigeria than bank accounts! With over 75 million mobile

users and counting, its uptake has successfully crossed the age and geographic distribution

barriers that have limited other banking channels.

M-PESA, Kenyas pioneer mobile payment service offered by Safaricom is a small-value

electronic payment and store of value system that is accessible from ordinary mobile phones.

It has seen exceptional growth since its introduction in March 2007. It has already been

adopted by 9 million customers (corresponding to 40% of Kenyas adult population). Within

about a year, Safaricom became the biggest bank in East Africa. Customers can cash in and

cash out from their M-PESA account at any of 17,000 authorized retail outlets in the country.

Today, customers can use their phones to pay for cab rides and electricity, to get money out of

ATMs without owning an ATM card or even having a traditional bank account, pay for water

(especially in rural areas where wells are installed for free, complete with an integrated cell

phone payment system), etc

M-PESA has prompted a rethink on the optimal sequencing of financial inclusion strategies:

rather than credit-led or savings-led approaches, the M-PESA experience suggests that

there may be a third approach focus first on building the payment rails on which a broader

set of financial services can ride.


15/17

A new retail banking landscape is evolving with the hand held mobile device at its

centre. Discerning banks will begin to explore the inherent opportunities that exist in

harmonizing mobile banking solutions with other channels and ensuring earlypartnership with the mobile banking platform providers to drive market penetration.

Crafting a multi channel strategy

Success in retail banking is largely dependent on expert management of distribution channels.

It is very important that banks manage customer needs and address the unfavourable cost

profile of traditional branch banking. However, with the number of alternative delivery

channels, this may seem a herculean task.

Key milestones towards creating a multi channel strategy include:

Create distinct customer segmentation schemes based on customer activity on different

service delivery channels;

Define distinctive value propositions for different segments;

Continue to provide multiple delivery channel access; and

Create performance evaluation metrics to benchmark progress.

Market place dominance will likely be realized by the bank that has a clear strategy on how to

improve the customer service value by aligning distinct customer segment value propositions

with the appropriate channel delivery mix.

There are no trafficjams along the extramile .


Roger Staubach





16/17

5Keeping An Eye on the "Ball" in the midst of significant Industry changes

Conclusion





Evolving technologies and the changing landscape continue to raise customer expectations;

however the turmoil in the industry and the fight for survival have meant that the focus on

customers needs has somewhat taken the backseat. This is evidenced by the decline in

satisfaction scores across all market segments and customer service areas in this years

survey results. The customers' basic buyer values remain unchanged and still hovers around

the fundamentals: Minimal transaction time; improved feedback resolution; timely and

accurate transaction processing and; improved relationship management.

Despite the pockets of initiatives to improve service being implemented by the banks, the

results of the survey has shown that these initiatives are yet to yield the desired impact on

the customers, as the banks continue to fall short of their customers' expectations. Banks will

therefore need to adopt a holistic and coherent approach to service delivery in order to

address these deficiencies.

The retail distribution landscape is transiting from a branch dominated paradigm where service

is provided within the branch to one of integration and balance among multiple delivery

channels. The position of the branch is shifting from the main transaction center to a place

where only high value services and advice are provided. This integrated landscape is

necessary to serve different customer segments. Therefore, banks may need to rethink and

redefine the role of their branches.

Proactively understanding and defining the appropriate channel strategy/products/services is

key to winning the customer war. The banks who will be successful will have to effectively

juggle all demands in an ever-changing operating environment, while they keep their eyes on

the ball - the customer!


17/17

2011 KPMG Professional Services a Nigerian partnership and a member firm of the KPMG network of

banking survey

Documents

Transcript of banking survey