African banks need to work harder - report

LAWRENCE SERETSE
Correspondent | Friday May 17, 2013 00:00

The independent 2013 report, which is yet to be released, uses the Customer Satisfaction Index comprising convenience, customer care, transactions, methods and systems, as well as pricing and product services as key factors to measure customer satisfaction and identify areas that need to be improved.

According to the report, more than one in five respondents said their top criteria for selecting a bank was their ability to remain stable - an understandable requirement given the rate of banking collapses around the world recently. It was attention to customer service that seemed to separate leaders from the rest of the pack. The report shows that customers are rather keen to access their money easier and faster without the depressing hassles of delaying transactions and waiting for long. Thus meaning customers want faster quality service and choose to worry about the bank's charges and fees later.

Customer care factors were seen as being among the most important indicators for many respondents, leading almost half (43 percent) to say they would change their banks as a result of poor service quality. The survey projects that Africa-wide, customers were quick to call for improvements in this area, around 16 percent said they wanted to see friendlier staff while 14 percent said they would like faster and more effective complaint resolution from their banks.

While the survey highlights a number of other key areas where African banks could make improvements in order to gain market advantage, one in five respondents prioritized a reduction in waiting times for transaction processing and requests as their top area for improvement while 17 percent said they wanted to see improvements in the way services are delivered through channels.

'As our analysis in this report suggests, alternate banking channels are now starting to gain a foothold in many markets, creating another opportunity for banks to differentiate themselves and build loyalty among customers.Already, more than six percent of respondents said they would switch banks if they offered more innovative products and services versus eight percent who said they would switch because of the proximity of branches,' says KPMG Nigeria's Bisi Lamikanra in the foreword.

 To gain a clear picture of customer satisfaction with Africa's banks, KPMG requested its respondents to judge their banks across five key areas that, in our experience, hold the greatest influence over customer satisfaction and these were the results:

Customer careThe report shows that African banking customers overwhelmingly (94 percent) voted 'staff friendliness' as the most important factor influencing their satisfaction with their bank. Yet while eight in ten expressed satisfaction with this element, results for other customer care elements were rather weak across the continent.

Just three in ten customers said they were very satisfied with their bank staff's knowledge of banking products and only ten percent indicated that they were extremely satisfied that their complaints were being promptly addressed.

Transaction methods & systems (TMS)This report suggests that when asked what part of transaction methods and systems were important to customers, interestingly turnaround time for transactions processing and accuracy of information provided by banks were of equal importance. However, the results revealed higher satisfaction with transaction turnaround time (81 percent) compared to 71 percent who were satisfied with the accuracy of information provided by their banks in account statements, advice slips and basis of bank charges.

ConvenienceThe survey shows that 99 percent of respondents said that they still use branches. However, it is clear that ATMs are becoming a vital part of Africa's banking system; 85 percent of respondents said they use ATMs, with half saying they use them on a weekly basis. And while other alternate channels have clearly demonstrated value in Africa (Point Of Sale (POS) in Botswana enjoys 69 percent usage while mobile banking in Kenya has topped 50 percent usage), this report shows that adoption has been slow in most markets.

PricingThese results show that when it comes to value for money, almost one in five of Africa's banking customers expressed dissatisfaction with the cost of maintaining their accounts while 15 percent said they were indifferent.

Respondents also said they would like their banks to be more proactive in notifying them of changes in interest rates, tariffs and terms and conditions. However, interest rates seemed to be the biggest pricing frustration for respondents in 12 of the 14 countries surveyed who said they were least satisfied with the rates they were offered for deposits and investments. The report concludes with an in-depth market-by-market analysis of the data that lays out the key challenges and opportunities for banks operating in each of the 14 markets surveyed and identifies the leading banks in each category of customer satisfaction.

The survey results reveal the dominance of branches and the ATMs over other channels in Africa. However, there are also exciting trends for adoption of alternate payment channels, such as in Botswana where nearly half of respondents use POS at least on a weekly basis, which may be partly attributable to the level of development of the country's banking sector.

'More than one in two institutional investors see Africa as the most attractive region to invest in the next decade, with one in three expecting to put at least five percent of their portfolios into the continent by 2016,' says Lamikanra. In a nutshell, whilst infrastructural challenges remain, many customers express willingness to carry out transactions such as withdrawals via the ATM, the report shows.

Unsurprisingly, the survey results have revealed that financial stability was the leading reason for maintaining banking relationships in 11 of the 14 countries surveyed. This is a reflection of the recent wave of regulatory interventions across the continent focused on the review of the new minimum capital for banks, thereby increasing the customer's awareness of the state of the industry, highlights the KPMG report.