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Rising service expectations in developing markets 

By Bisi Lamikanra, Partner & Head Management Consulting, KPMG in Nigeria.

Good customer service is not only imperative among banks in mature markets, according to a report by KPMG in Nigeria that found rising customer demands in the developing local market. The 2014 study identified increasing expectations among consumers and a highly competitive and responsive financial industry.

Findings from the data may surprise anyone who thinks banks in emerging markets need only focus on launching a local presence, a visible brand and innovative products. In fact, based on interviews with over 20,000 respondents in 28 Nigerian cities, the 2014 Nigeria Banking Industry Customer Satisfaction Survey (PDF 1.95 MB) concluded that delivery of high quality and a differentiated customer experience are most critical to bank success in this growing market.

Focusing on the perceived quality of customer service provided by banks among retail, corporate/commercial and small & medium sized enterprise (SME) segments, the study found that customers’ highest priority was excellent customer service. It was also the biggest reason they were loyal to their current bank. For 92 percent of respondents, the most important service measure was bank staff attitude.

Even among older retail customers, excellent service trumped financial stability as the resounding reason that they stay with their bank – surprising, considering the history of financial volatility these customers have likely witnessed.

Priorities shifted somewhat for SME clients; financial stability was the top priority for these firms, followed closely by customer service excellence. Bank image and reputation placed a distant third in importance among retail, SME and corporate customers.

Nigerian banks responding to demand:

To the credit of Nigeria’s banks, they seem to be rising to customers’ demands. The survey showed an improvement in Customer Satisfaction Index scores across the three major customer segments, reflecting the banks’ continued investments in service quality and the customer experience.

All banks either increased or maintained their CSI value over last year and the gap between the top and lowest ranked banks in the retail segment has never been closer in the eight years KPMG in Nigeria has performed this research.

This translates into a very loyal banking population, with 55 percent of customers saying they would ‘absolutely’ recommend their banks to others (another 21 percent indicate they ‘often will’ do so). When asked why they would recommend their bank, the most frequent answers related to convenience and consistent service quality.

However there is room for improvement. The study revealed that long queues at branches and ATMs continue to annoy a majority of customers. There is also dissatisfaction with uptime and availability of ATMs and POS service, possibly relating to infrastructure and telecommunication challenges. SME and corporate clients also expressed concern about the poor speed of transaction processing and sought clearer demonstration of product features and value for price.

Despite the challenges of making continuous investment in delivery channels, training and systems, Nigeria’s established banks appear well placed to grow current customer relationships if they stay focused on the seemingly universal consumer desire for good customer service.

 

  • How do your customers truly rank customer service against other banking priorities?
  • Are you measuring and responding to the distinct ways your retail, SME and corporate clients define ‘excellent service’?
  • What are the top ‘quick win’ service improvements your organization could make to improve your CSI scores?

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