Need for banks to build customer advocacy for growth

There is significant business opportunity associated with customers who are true advocates, as they are very likely to recommend their primary financial service provider (PFSP), according to EY.

In a 2014 global consumer banking survey by EY, 40 percent of customers are very likely to recommend PFSP, 37 percent are likely, 19 percent neither likely nor unlikely, 3 percent are unlikely and 1 percent is very unlikely to recommend PFSP.

Customers are satisfied enough to recommend their PFSP, which they generally define as a bank, the survey reveals.

The survey indicates that 44 percent of those who are likely to recommend their PFSP opened new accounts or services at their bank, 9 percent intend to consolidate everything at their PFSP in the next year, while 30 percent of customers intend to open new accounts or services.

African customers, 50 percent express stronger advocacy for their PFSP than globally, 40 percent. Customers in Kenya are the strongest advocates with a majority, 62 percent customers very likely to recommend their bank. In South Africa, 51 percent of customers are very likely to recommend PFSP while in Nigeria, 46 percent are very likely to do so.

Similar to global results, customers in Africa are more likely to increase business with their PFSP if they are advocates. The lower levels of activity overall reflect lower product ownership among customers in Africa (3.8 products owned on average among all Africans verses 5.5 globally).

There are opportunities for Nigerian banks to leverage confidence levels to advocacy. Confidence in the banking industry among African customers has experienced a significant increase, mostly notably in Kenya and Nigeria, according to the EY report.

Nigerian customers have the highest levels of trust for PFSP in Africa, second to India on the global survey.

“Banks in Nigeria have to step up their efforts in educating their customers on the various changes regarding their products, policies and even the use of technology in order to be able to meet up with new developments. ‘Continuous and deliberately planned customer education should be embraced by all banks in the overall interest of the bank,” Segun Aina, former president, Chartered Institute of Banker of Nigeria (CIBN), has said.

However, as part of efforts toward creating better understanding and mutually beneficial relationship between banks and their numerous customers, Bank Customers Association of Nigeria (BCAN) has concluded arrangements to organise the maiden Bank Customers Summit.

The Summit, which is free for all the participants, will enable bank customers in Nigeria to know their rights and privileges; know the answers to recurring customers’ complaints; understand Central Bank of Nigeria’s policies and how they affect them as bank customers, as well as get firsthand feedback from bank customers to enhance customer retention.

The Summit with the theme: “Value Based Banking: Bank and their Customers” is scheduled to hold tomorrow at the Lagos Airport Hotel, Ikeja, Lagos.

The BCAN is a consumer-protection focused organisation and an incorporated trustee that recognises the interdependence of providers and consumers of banking and financial products/services. Its objectives are to promote good banking culture and habits; foster and promote good banker-customer relationship; strengthen the ties among bank customers; ensure mutual understanding, trust, confidence and cooperation between banks and their customers, among others. It aims primarily, to protect the rights and interests of its members, albeit, all customers of banks in Nigeria.

Sarah Alade, deputy governor, CBN, will be the special guest of honour and will deliver the keynote address, while Umaru Ibrahim, managing director/chief executive, Nigeria Deposit Insurance Corporation, and Folashade Tinubu-Ojo, the Iyaloja General of Lagos, will be the guests of honour.

HOPE MOSES-ASHIKE