Overcoming challenges of next phase in retail banking
As banking services become ubiquitous and customers more sophisticated, convenience either via branches or ATMs will remain at the heart of customer interactions.
In the last few years, the proportion of retail customers using the ATM increased significantly. With the majority of everyday transactions still cash based, cash availability at the ATM was the most important service measure for retail customers.
While banks continue to make significant investments in ATMs, spurred by a huge uptake by customers, the role of the ATM is becoming more central in the bank-customer relationship equation, leading to conclude that banks now need to reconsider the ATM strategies to achieve greater efficiency.
With the quest for financial inclusion and cash-less economy, where emphases are placed on banking the unbanked, improving the under-banked and reducing physical cash in circulation, it becomes a veritable tool, with its variety of product offerings, for seamless transactions.
In fact, the revolution in the nation’s payments system landscape as evident in the huge patronage of mobile money, agent banking and the use of other electronic channels in recent times has now become the driving force of retail segment in the industry.
Improved customer experience, technology and thorough exploitation of the emerging alternative markets in the non-oil sectors of the Nigerian economy are keys to growing emerging retail banking sector.
As the Nigerian retail banks customers become more sophisticated, it is now very important that retail banks determine the factors that are important and relevant to the customers’ retail bank choice decisions.
Interestingly, this presents an opportunity for banks wishing to tap into the possibilities created by this class of Nigerians who wish to transact their banking business using their local bank accounts.
Indeed, key drivers in the retail banking industry must strategically re-engage the retail banking function with better and superior knowledge.
This highlighted the need for banks in Africa, especially Nigeria to be more creative in their activities in the retail banking space.
First Bank, in its efforts to find more creative ways to tease value out of this space, especially in the light of strong and growing competition, including from non-bank actors, organized the West Africa International Retail Banking Dialogue 2015 held recently in Lagos where stakeholders in the financial industry listed some of the challenges militating against the growth of retail banking in Nigeria and other Africa countries and the way forward.
The highlight at the event was the need for local operators to stay ahead of trend and respond to the new dynamics of retail banking, especially in Africa in order to remain competitive in the global market.
The stakeholders submitted that for this to be achievable, enough traction, in terms of infrastructure endowments must be put in place to drive these process alterations.
Specifically, the Group Managing Director and Chief Executive Officer, First Bank of Nigeria Limited, Bisi Onasanya, described the continental retail banking space as ‘big and getting bigger’, adding that “There is no doubt that we would need to find more creative ways to tease value out of this space, especially in the light of strong and growing competition, including from non-bank actors.”
Onasanya explained that the major retail banking challenge, which service providers face across the continent, is one of building strong relationships across all customer segments and along each customer’s value chain.
To this effect, he explained that operators needed to strengthen the process for collecting, storing, and retrieving data, even as they should also identify cultural processes or values that may assist or hinder use of personal data to drive new levels of customer engagement.
The Executive Director, Retail Banking, South, First Bank, Roseline Asiegbu argued that is an established fact that retail businesses remain the focal point for the much desired economic development in Nigeria.
She added that if stakeholders in the retail space in the country could harness and explore the opportunities in the segment of the economy, there would certainly be improvement in the risk management structure of the business segment in Nigeria.
Also speaking, the Chairman Asian Banker, Emmanuel Daniel explained that retail banking performs an important function in mobilizing the financial resources of large populations, noting that retail banking help in assessing a strong deposit base cheaply in more developed countries,
Daniel maintained that Nigeria has to benchmark itself with other emerging markets of similar size and per capita GDP level, adding that “There is a lot to learn and there is a lot share with one another.”
He noted that a new entrant into retail banking would find the business very expensive because of competition and investments they have to make, while an existing bank with a strong customer loyalty would find acquiring customers much cheaper than a new entrant.
“Retail banking performs an important social function in mobilising the financial resources of large populations.