There is no doubt that the Nigerian banking landscape has continued to face significant headwinds on its bottom line – both from the topline and costs. However, the greatest opportunity to grow revenue will not come from just new markets or products but rather from the ability to deliver high quality and differentiated customer experience, writes John Omachonu.
As Nigerian bankers struggle to increase the bottom linrosee in the face of continuous tighter monetary policy measures, Zenith Bank, as part of its driving force, is set to take retail banking to greater heights and engenders another level of competition in the industry.
As banking services in Nigeria are becoming ubiquitous and customers more sophisticated, convenience either via branches or ATMs will remain at the heart of customer interactions. Last year, the proportion of retail customers using the ATM and other electronic channels, such as internet banking, mobile banking and mobile payments, with the number of retail customers also reported using the POS rose astronomically. While a lot of the focus on alternate channel improvements has been targeted at retail consumers, addressing the payment needs of merchants also presents win-win opportunities for Zenith Bank to increase revenues from the use of cards and POS terminals while at the same time, enabling merchants to grow their businesses.
“We are forward-thinking, benchmarking trends in technology to shape our future coupled with our practical delivery on a highly automated platform that makes us unique. As information technology (IT) infrastructure improves, our leading edge in IT keeps us well positioned in the global banking community to sustain our offering of exceptional E-banking services,” says Peter Amangbo, chief executive of the bank.
Amangbo believes that the bank’s success is hinged on satisfying their customers and helping them unlock the real value of their businesses. “The challenge is always to be better than anyone else; better at creating real, lasting value for customers,” he says.
Having established itself as a leader in corporate and investment banking, the bank appears to be preparing to play a deeper and leading role in the retail end of the market, using its high technology and innovative products for cutting-edge services. Recently, the bank deployed service delivery and products in what market watchers say is set to redefine the concept of retail banking in Nigeria and beyond, to improve its bottom line and return returning higher value to shareholders
Retail banking is the cornerstone of banking operations in the country, and with heavy investment by the bank through new branches and different electronic channels and information technology, a higher level of competition is evolving in the industry. This is in recognition of the fact that net interest margins are comparatively high in the industry, making retail banking very attractive.
It has continually evolved through innovation, dynamism, insight and leadership and has ultimately become a brand respected globally for its tremendous successes in the deployment of cutting-edge technology, niche marketing, competitive advantage, provisioning and unwavering commitment to providing best-in-class service to its customers.
Part of its strategy to achieve these aims has been to build a sophisticated and cutting-edge network of services. The group has over 700 ATMs in Nigeria alone and has invested significantly in developing online and mobile banking platforms that will carry its business into the future. Its arsenal includes a variety of e-tolls for its business customers, like an automated payroll system and ‘Xpath customised branch collections,’ which allows clients to receive or collect remittance from their key distributors and customers through any of its branches. These tools are invaluable to small- and medium-sized businesses that often lack the resources to develop their systems.
Over the years, the bank had relied and continued to rely on technology as one of its major tools to deliver cutting-edge service to its customers, and this it has successfully used to its advantage to serve customers and delivered impressive returns to shareholders.
Market watchers say the move into retail services will not only enhance Zenith Bank’s corporate profile, it will endear it to the hearts of its customers and also give access to customers in the lower ends of the market to qualitative services provided by the bank.
It is instructive that the venturing into retail services with its full arsenals by the bank is not accidental, except that the full deployment of resources to that segment of the market now will enhance the retail banking concept in the industry.
For instance, due to its efficient customer service delivery, both its customers and indeed, the banking public had always selected the bank above its peers in various surveys and opinion pools carried out by independent organisations and agencies.
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The recent Customer Satisfaction Index (CSI) survey carried out by KPMG Services was one of the reminders of the bank’s exploits and achievements. The survey focuses on the perceived quality of customer service delivery by banks from the customer’s perspective across the retail, corporate/commercial and small and medium-size medium-sized enterprises (SME) segments. And for 2013 and 2014, Zenith Bank led as the preferred by customers.
Indeed, for the second consecutive year in the retail segment, Zenith Bank emerged as the most customer-focused. This was in addition to the SME and corporate banking segments, where the bank became the leader in 2013 and 2014, respectively.
Because the management of the bank is focused and realizing that the essence of retail banking is wider choices and convenience, it has continued to invest in technology while providing various channels for customers to meet their business and financial needs.
In fact, before the CSI, a survey conducted by PricewaterhouseCoopers (PWC) to determine the most respected companies and chief executives in Nigeria, produced the bank as the first among its peers, with PWC justifying its decision on the fact that it was seen as A good corporate citizen, which is socially responsible with high ethical standards; a trusted company, which promotes good values with a unique and excellent leadership style, coupled with strong management principles and structure plus a smooth succession plan as well as a very resourceful company with excellent business culture.”
They also include: “A visionary and revolutionary company with strong focus, innovative with popular brands of high quality; engaging in human capital development and high capacity building and an indigenous company with high local content.
Others are: “A good corporate governance practice, high shareholder interest and value, harmonious industrial relations, friendly and good working environment, global and internationally recognised (Multinational) and size of company/largest in Africa/industry leader were other parameters used in arriving at their inference.
“PWC may have taken into cognisance Zenith Bank’s adherence to good corporate governance practices as well as global best practices and its emergence as a globally recognised brand,” the report said.
In its financials last year, it announced a profit before tax of N57.85 billion for the six months ending June 30, 2014, up by 11 per cent from N52.09 billion for the corresponding period in 2013.
Profit after tax for the period under review, according to the bank’s unaudited half-year result, was N47.44 billion, up by 8.2 per cent from N43.82 billion for the same period in 2013.
Details of the half-year result showed all-around improvements, with gross earnings also up by 7.8 per cent from N171.02 billion in 2013 to N184.43 billion.
The results also showed that within the period, Zenith, Nigeria’s biggest bank by Tier-1 capital, grew its assets by 15.2 per cent from N2.78 trillion to N3.20 trillion. Also noticeable is the 7.43 per cent increase in shareholders’ funds, up from N458.31 billion as at the end of June last year to 492.38 billion.
The bank commenced business as commercial banking in July 1990, and became a public limited company on June 17, 2004, following its listing on the Nigerian Stock Exchange. Its shares are currently freely traded on the London Stock Exchange following a listing of $850 million worth of shares at $6.80 each.
With operations in Nigeria, the UK, Ghana, Sierra Leone, Liberia, China and South Africa, it stands out in the banking industry through superior service quality, unique customer experience and sound financial indices. These qualities, analysts say have prepared the bank for the leadership role and position in retail banking in the industry.
Analysts say the major factor going for the bank is the fact that it is blessed with a stable board and management, as the bank has created a professional environment where individuals are encouraged to display their creativity, which would translate into greater wealth creation for its clients.
John Omachonu
