Nigerian banks will need to re-define strategies, as the latest EY survey shows 34 percent of their customers strongly agree they are confused with all of the different financial products and services being pushed to them by financial institutions in the country.
The report, which examined the relevance of banks to customers, shows that customers have diminishing trust in their banks. Though 71 percent of customers of Nigerian banks said they had complete trust in their financial institutions as against 56 percent in South Africa, only 57 percent agreed the institutions would protect them in instances of fraud.
Similarly, only 38 percent strongly agreed that banks were completely transparent about fees and charges. Forty had moderate trust in banks in this area. A whopping 36 percent strongly agreed that banks could provide them with truly unbiased advice suited to their needs, while 48 percent had moderate trust.
Contrary to what might be assumed, the digitally savvy customers are more likely to engage a traditional bank for complex products. These individuals may lack the financial acumen needed to learn about and obtain these products and services digitally. The digitally savvy are more prone to managing finances through digital channels, but they still have a need for traditional bank interaction and may not be confident in how complex products are offered via digital channels, the survey by EY, global tax and advisory services firm, shows.
Sixty-four percent of digitally and financially non-savvy strongly agreed they needed a traditional bank for complex and important products like a mortgage (though it is okay to have some products with new types of financial services companies). However, 65 percent of digitally non-savvy but financially savvy strongly agreed to this, while 72 percent of the digitally savvy but financially non-savvy strongly agreed. Sixty-nine percent of digitally and financially savvy strongly believed this.
Also, 57 percent of digitally and financially non-savvy said they were excited about the emergence of new online only financial services providers that were competing with the traditional banks. Fifty-eight percent of digitally non-savvy but financially savvy gave a complete nod on this, while71 percent of digitally savvy but financially non-savvy agreed.
The survey shows most Nigerians customers (76 percent) are not opting for digital money transfer and payment solutions (ATMs, etc). Fifty percent want online banking while only 12 percent enjoy calling a bank or call centre.
“This means banks now need to rebuild trust, better understand customer attitudes and behaviour and re-think distribution channels and customer engagement,” said Colin Daley, partner in advisory services for EY.
“Digital innovation needs to be key in Nigeria today. Banks need to protect customers from data piracy and cyber threats, while eradicating errors and minimising lead times,” Daley said.
He advised banks to improve experience through innovation and convenience like financial technology institutions (fintechs).
Adedapo Adewole, director, advisory services for EY, said traditional banks need to partner fintechs as the latter is now taking a big global place.
“There are digitally-savvy customers who are not financial savvy. They are not worried about rates and are interested in fintechs. Fintechs are taking up a large share across the world and banks need to innovate and partner with them,” Adewole said.
According to Andy Bates, financial services leader, Africa, the report shows what customers are looking for when it comes to digital. Bates said it shows people want to do digital outside the banks, while they want banks to become places for value creation.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
