2014 kpmg banking industry customer satisfaction survey

8/19/2019 2014 KPMG Banking Industry Customer Satisfaction Survey

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ISSUE EIGHT

2014 Nigeria BankingIndustry CustomerSatisfaction Survey

kpmg.com/ng


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2 | Banking Industry Customer Satisfaction Survey 2014

© 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (‘’KPMG International’’), a Swiss entity. All rights reserved.

The Nigerian banking landscape continues to face significantheadwinds on its bottomline - both from the topline and costs.Our view is that the greatest opportunity to grow revenue willnot come from just new markets or products but rather from theability to deliver a high quality and differentiated customer experi-ence.

Hence, we are pleased to present findings from the 2014 Nigeria Bank-

ing Industry Customer Satisfaction Survey, now in its eighth year. Wehave again expanded the scope of the survey to cover 28 cities in 27states across Nigeria (up from 18 cities last year). In the process, wespoke to 20,770 retail banking customers, 3,500 SMEs and about 400corporate/ commercial organisations. The survey reflects the perspec-tives of customers on their preferences, levels of satisfaction andexpectations from their banks.

Since the commencement of the survey, the gap between the top andlowest ranked banks in the retail segment has never been closer. Thisis a reflection of the very competitive environment banks in Nigerianow operate. Our findings also reveal continued progress in effortsto increase customer adoption of alternate channels. Increases wererecorded in customer adoption across all alternate channels except thecontact centre which experienced a decline in usage.

Convenience and consistency in service quality were the resoundingthemes across the segments. Corporate customers are also increas-ingly looking for a clear demonstration of value in product features andexpect a commensurate reflection of pricing to value.

We hope our survey findings assist banks to better understand, serveand form valuable relationships with their customers. We welcomefeedback for next year’s survey.

Bisi LamikanraPartner & HeadManagement Consulting


Foreword


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4 | Banking Industry Customer Satisfaction Survey 2014 Banking Industry Customer Satisfaction Survey 2014 | 5

In reading this report, you should bear the following factors in mind:

1. This is a perception study• This survey focuses on the perceived quality of customer service delivery by

banks from the customer’s perspective across the Retail, Corporate/Commercialand Small & Medium Sized Enterprises (SME) segments.

• This survey does not represent the opinion of KPMG on the skills, capabilities orperformance of any of the banks covered.

•KPMG is responsible for defining the survey questionnaire administered to therespondents.

• KPMG conducts the survey, but findings represent the opinions of the custom-ers of each bank.

This survey does not seek to establish any absolute facts, but it reports the feelingsand broader perceptions of customers with respect to services provided by theirbanks. The rankings are solely based on the customers’ feedback received from thesurvey.

2. Perception is neither balanced nor fair, but the study always has a represent-ative sample sizePerceptions are by definition subjective; as a result, they are neither balanced norfair. Banks rated in the survey vary by size, service offerings and customer profile.However, the minimum number of respondents required for each bank in the surveyguarantees that the results reflect the opinion of a representative customer group ineach segment.

MethodologyThe Customer Satisfaction Index (CSI) was used in this survey to determine cus-tomer satisfaction. CSI is simply a weighted score that assigns importance ratingsof service measures to the satisfaction ratings of those measures as provided bycustomers on the service delivery of their banks. Respondents in the survey wereasked to rate their banks on the following customer service factors discussed inmore detail below. More details about the survey can be found on page 32.

Customer Satisfaction Index (CSI) Customer Service Factors

Convenience

C on ve nie nc e C us to me r C ar e

Transactions,

Methods &

Systems

Products &

Services

Pricing

Measures accessibility and quality of servicefrom delivery channels

Measures interaction of bank staff withcustomers

Measures customer support processes/systems & turnaround time

Measures customers’ perception on fees,charges and rates on products

Measures product range and appropriateness tocustomers’ needs

Customer Care

Transactions, Methods &Systems

Pricing

Products &Services

© 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (‘’KPMG International’’), a Swiss entity. All rights reserved. © 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (‘’KPMG International’’), a Swiss entity. All rights reserved.

CSI Formula(S x I)

SI

About the survey ContentsOverall findings 6

Reasons for maintainingbanking relationships 8

Opportunity awaits bankswho claim PFM turf 12

Convenience remains keyto satisfact ion 14

Internet banking: An underratedopportunity? 20

Cybercrime: A growing challengefor banks 22

Customer care: Consistencymatters 26

Product relevance: do you get it? 28

The turnaround time challenge 29

Key takeaways 30

Demographics 32


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Banking Industry Customer Satisfaction Survey 2014 | 7

© 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (‘’KPMG International’’), a Swiss entity. All rights reserved.© 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (‘’KPMG International’’), a Swiss entity. All rights reserved.

This year, there was an improvement inthe CSI across the three major customersegments which reflects banks’ contin-ued investments towards enhancing ser-vice quality and creating better customerexperiences. Notably, the gap betweenthe top and lowest ranked banks in theretail segment – at 7 percentage points –has never been closer. This is in compari-son with 12 percentage points last yearand nearly 19 percentage points in 2009.

All banks excluding last year’s top three(Zenith, GTBank and Stanbic IBTC) re-corded varying levels of increases in theiroverall CSI values with a consequent risein the industry satisfaction index valuefrom 71.9% to 72.8%. The ATM contin-ues to remain a key channel for retail

customers with 96% of them highlight-ing cash availability as one of their mostimportant service measures.

For the second consecutive year in theretail segment, Zenith Bank emerged asthe most customer-focused bank closelyfollowed by Diamond Bank who movedto second (from last year’s fourth place)with GTBank in third place.

In the SME segment, Zenith Bank movedfrom second position last year to be-come this year’s most customer focusedbank, followed by Diamond Bank andStandard Chartered Bank in third place.There was a similar narrowing of the CSIgap - from 9.3 to 7.7 percentage points -in this segment.

Top 10 most customer-focused banksService qualitymakes the difference

Corporate banking customers alsoranked Zenith Bank as the most custom-er focused for this year with GTBank andCitibank coming second and third respec-tively. The biggest gains were in the areaof convenience however the higher sat-isfaction levels recorded in this segmentwere driven more by the performance ofthe top five banks than for the industryas a whole. Completeness and accuracyof information provided topped the list ofimportant issues for nearly all corporatessurveyed while the biggest area requiringimprovement remains knowledge of thecustomer’s business.

OVERALL FINDINGS

ZenithBank

75.67

ZenithBank77.61

ZenithBank77.37

DiamondBank

75.34

DiamondBank77.22

GTBank

75.94

GTBank

75.32

StandardChartered

77.16

Citibank

75.71

StandardChartered

74.55

GTBank

76.61

DiamondBank74.26

StanbicIBTC

74.20

FidelityBank75.35

StanbicIBTC73.36

FidelityBank

74.03

StanbicIBTC75.18

FirstBank

73.35

FCMB

73.48

FirstBank

74.96

FidelityBank72.42

FirstBank

72.58

FCMB

74.93

UBA

72.32

SterlingBank

72.50

Skye Bank

74.43

SterlingBank72.23

AccessBank

72.11

AccessBank74.40

Skye Bank

72.07

Retail

Small and Medium Scale Enterprises (SME)

Corporate/ Commercial

Source: 2014 Nigeria Banking Industry Customer Satisfaction Survey, KPMG

#1

#1

#1


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The primary reason for maintaining bank-ing relationships for retail and corporatecustomers remains excellent customer

service. For SMEs, financial stabilityremains prime as 32% of SMEs stillchoose to stay with their banks on thisbasis.

Whilst one might expect older retailcustomers to have a bias for financialstability, our findings show that excel-lent customer service and the quality ofcustomer experience is the resoundingfactor across all age groups for why cus-tomers choose to stay with a bank.

An overwhelming majority (92%) ofthose who reported excellent customerservice as their primary reason for main-taining banking relationships also rated

staff attitude as being important to theirbanking relationships – more than anyother service measure. With custom-

ers now having more choices than everbefore, a positive personal experienceor professional touch may often be thedifferentiator.

One customer who has operated acurrent account with his bank since thesixties still prefers to travel the 30kmjourney to his bank branch because ofthe quality of interaction he enjoys withthe bank’s staff. In his words, “the rela-tionships I have with some of the bankstaff I’ve met here still endear me to thebank. The little personal touches I receivesuch as receiving a text message on mybirthday is priceless.”

E xc el le nt c us to me r s er vi ce F in an ci al s ta bi li ty Ex ce lle nt c us to me r s er vi ce

Financial stability Excellent customer service Financial stability

Image and reputation Image and reputation Image and reputation

10% Proximity of branches 10% Proximity of branches

7% Employer requirements4% Quality of relationship with

bank representative7% Quality of relationship with

bank representative

7% Bank’s support of business

Retail RetailSME SMECorporate/ Commercial Corporate/ Commercial


Service trends and innovations in otherindustries like Retail, IT and FMCG con-tinue to raise customers’ expectations

of service quality. Majority of the banksare rising up to this challenge, evidencedby the increase in the number of serviceimprovement initiatives rolled out bybanks. However, for these initiatives torecord lasting successes, they must bepart of the bank’s ongoing journey oftransformation.

Of the four-in-ten customers who havemultiple bank relationships, fewer cus-tomers (7% in 2014 compared to 10%last year) expressed the willingness tochange their banking relationships. Overhalf of those who will switch banks willdo so because of service quality issues.

Overall, we found a largely loyal bankingpopulation – 55% of customers will‘absolutely’ recommend their banks to

others. Interestingly, loyalty trends didnot vary when viewed by the durationof the banking relationship. However,as expected, satisfied customers weremore likely to recommend their banks.

1%

Reasons for maintainingbanking relationships

Absolutely Will Often Will Sometimes Will Abs olutely Will Not No Respons e

Q. Will you recommend your bank?Q. What is your primary reason for choosing to maintain your banking relationship?

1%

55%

21%

21%

21%10%15%

6%3% 5%

26%

64%47%

3% 2% 1%

Excellent customer service and

the quality of customer experi-ence is the resounding factoracross all age groups for whycustomers choose to stay witha bank.

Source: 2014 Nigeria Banking Industry Customer Satisfaction Survey, KPMG Source: 2014 Nigeria Banking Industry Customer Satisfaction Survey, KPMG

36% 32% 27%27% 27% 22%12% 10% 7%


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Rewarding loyalty

From gifts during holiday seasons tofrequent reward-themed promotions(promos), customers have a wide rangeof opinions on the manner and frequencyof reward by their banks.

The problem with loyalty initiatives ofthis kind is that they often focus on cus-tomers whose attachment to the bankis no more than the latest save-and-winpromo. For the save-and-win schemes inparticular, these customers are typically

able to move funds from bank to bankto meet the short term deposit raisingobjectives common to these giveawayschemes. To properly reward customerloyalty, banks need to be able to identify

and focus on customers who presentclear potential for long-term and mutuallybeneficial relationships. In the final analy-sis, this class of customers cost less toserve and are less likely to defect.

Reasons for switching banks (Retail)

Quality of internet/mobile banking

Innovative products/services

Interest rates and fees

Proximity of Branches

Data security

Financial Stability

Proximity of ATM

Turnaround time for request and enquiries

Service Quality

53%

50%

60%

70%

40%

30%

20%

10%

0%

5%

5%

5%

2%

1%

8%

8%11%



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It is understandable that banks havenot raced to launch PFM tools, since itis a completely foreign concept to themajority of consumers. However, manyconsumers perform basic PFM tasks ona regular basis, from tracking discretion-ary spending to paying bills. With theproliferation of digital technology, PFMnow encompasses everything from cat-egorizing card transactions to receivinglow-balance alerts to prevent overdraft.

But older generations, unaccustomedto receiving such PFM services from

banks, have kept to chequebooks andspreadsheets to manage their finances –tools ill-suited to support the increasinglyweb-based financial lives of modern-dayconsumers.

Of course, few of these financial activi-ties are popular pastimes for the average

consumer, making it difficult to marketthem to consumers. There is limited funinvolved in managing one’s finances andmany do just enough maintenance toensure that they have spending moneyfor the month. On the other end of thespectrum, even the most disciplined con-sumers are susceptible to abandoninggood financial habits after one bad monthof spending.

Financial technology (‘fintech’) companieshave catered to those with PFM ambitionthrough web and mobile apps (e.g. Mint,

Personal Capital and BillGuard). Thesethird-party apps sync with a consumer’sdisparate financial accounts and providepersonalized guidance related to spend-ing and saving with minimal effort re-quired by the user. As opposed to static,offline tools, third-party apps inform con-sumers of upcoming bills, offer spending


comparisons and provide a snapshot oftheir overall financial health.

The independent nature of third par-ties has worked to their advantage inthe PFM space. According to JavelinStrategy & Research, roughly 49% ofconsumers in a 2013 survey indicatedthe desire to aggregate financial activityacross accounts provided by differentfinancial institutions (FIs). This findinghelps explain why only 8% of consum-ers leverage PFM products provided bybanks, which are often restricted to only

the bank’s portion of the customer’slarger financial picture.

However, FIs have clear advantages thatcould help them reclaim the PFM space.First, security concerns and lengthyconfiguration efforts associated withthird-party apps often push potentialusers away. Second, FIs are already theprimary owners of consumer financialdata and traditionally viewed as centersof trust, making it possible to includesample PFM insights on monthly state-ments.

The product of such PFM opportunityand inherent advantages held by thefinancial services sector has beenthe introduction of a new class ofFIs deemed ‘neobanks’. These banks

– which include Moven, Simple andGoBank – operate on PFM-centricmodels that are designed to optimizeconsumer engagement. In their shortexistence in the marketplace, neobankshave gained traction by enabling usersto source financial activity from externalaccounts and adding a social flavour totheir platforms.

With their established customer bases,traditional banks can quickly step intothe PFM mix by first making FI-agnostictools better available to the uninformed,financially-responsible customer. And byintegrating PFM offerings with newerservices like merchant-funded offers,banks can appeal to informed but disin-terested customers.

While PFM may be limited in opportuni-ties for direct revenue, an increasedlevel of engagement with customers

To most companies in the financial services sector, Personal Fi-nancial Management (‘PFM’) is just another buzzword that offerslittle opportunity for profits. But pioneering banks who explore thefrontiers of PFM may find potential they could tap, if they adoptthe right app.

can ultimately produce higher cross-sellvolume of standard bank products likecredit cards and investment funds. Andstill, PFM can be used to generate feeincome related to merchant-funded of-fers, bill pay, credit scoring and financialguidance.

The ongoing transformation in the finan-cial services sector and the proliferationof web and mobile technology has madeit the right time for banks to leveragetheir position in the financial servicessector to combat emerging apps and

establish a footprint on the PFM turf.

Opportunity awaits bankswho claim PFM turf

With their established customer bases, traditional banks canquickly step into the PFM mix by first making FI-agnostic toolsbetter available to the uninformed, financially-responsiblecustomer.


Mike [email protected]

This article was extracted from KPMG’s online customer and channel newsletter,Perspectives – www.kpmg.com/perspectives. Access the newsletter for morearticles and to subscribe to receive email alerts when new content is available.


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As banking services become ubiquitousand customers more sophisticated,convenience either via branches or ATMswill remain at the heart of customerinteractions. In the last year, the propor-tion of retail customers using the ATMincreased from 84% to 91%, whilebranch usage at 96% remained largelythe same. Six-in-ten customers visit theATM weekly compared to three-in-ten forthe branch.

With the majority of everyday transac-tions still cash based, cash availabilityat the ATM was the most importantservice measure for retail customers.The frequency of cash dispense errorsand downtime of ATMs were thereforeareas where customers reported lowsatisfaction. Remarkably, only ten of thetwenty-one banks surveyed had morethan 30% of their customers reportingstrong satisfaction with ATM uptime.

While banks continue to make significantinvestments in ATMs, spurred on by ahuge uptake by customers, the role ofthe ATM is becoming more central inthe bank-customer relationship equation,leading us to conclude that banks now

need to reconsider their ATM strategiesto achieve greater efficiency.

Since the last survey, there has alsobeen a further rise in adoption of otherchannels – internet banking (13% to

18%), mobile banking (10% to 14%)and mobile payments (6% to 8%). 27%of retail customers also reported usingthe POS compared to 15% last year.We believe there is greater potential forfurther growth in the usage of alternatechannels with better education of thecustomer population and resolution ofcurrent infrastructural challenges.The only channel that suffered a declinein usage (from 12% in 2013 to 10% in2014) was the contact centre. Aversionto call charges and the perception of thecontact centre’s inability to sufficientlyattend to customer’s queries were someof the key reasons for the comparativelylower adoption of this channel.

The POS still suffers a significant expec-tation gap with 95% of SMEs describingit as very important to their businessescompared to only 36% who were verysatisfied with availability and uptime ofthe terminals provided by their banks.While a lot of the focus on alternatechannel improvements has been tar-geted at retail consumers, addressingthe payment needs of merchants alsopresents win-win opportunities for banksto increase revenues from the use of

cards and POS terminals while at thesame time, enabling merchants to growtheir businesses.


Convenience remainskey to satisfaction

Channel usage trends

Only ten of the twenty-one

banks surveyed had more than30% of their customers report-ing strong satisfaction withATM uptime.

The branch and ATM areby far the most popularchannels amongst retailcustomers.

N

96%

91%

27%

18%

14%

10%

8%

Branch

ATM

POS

Internet Banking

Mobile Banking

Contact Centre

Mobile Payments

2013 - 95% | 2012 - 97%

2013 - 86% | 2012 - 82%

2013 - 15% | 2012 - 6%

2013 - 13% | 2012 - 7%

2013 - 10% | 2012 - 6%

2013 - 12% | 2012 - 5%

2013 - 6% | 2012 - 2%

Retail CorporateSME

Top three banks by CS I rating - Convenience

1. Zenith2. GTBank 3. FirstBank

1. Zenith2. Diamond3. GTBank




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Q. How often do you use social media forpersonal purposes?

Q. What is your preferred channel for carrying out the following? Q. How often do you interact with your bank viasocial media?

Weekly

Never

Rarely

No response

Once a month

At least once

every 2 weeksATM

Branch

Branch

Branch

Branch

ATM

80% 20%

96%

95%

79%

31%

92%

9%

60%

3%

1%

2%

6%

4%

1%

2%

3%

4% 1%

1%

3%

1%

3%

3%

Branch

Internet Banking

Contact Centre

Contact Centre

ATM

Branch

Contact Centre

Internet Banking

Internet Banking

Internet Banking

Internet Banking

Social Media

Mobile Banking

Mobile Banking

Mobile Banking

Social Media

POS

Contact Centre

Channel preferences Social media and banking

Balance enquiry

Bill payment

Financial advice

Making complaints

Buying financial products

Cash withdrawal

70%

71%

5%

6%1%

3%

14%

2%2%

7%

15%5%


Branch

Weekly Once every two weeks Once a month Rarely Never No response

ATM

Internet Banking

POS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Mobile Banking

Call Centre

Mobile Payments

32%

6%

6%

4%

1%

2%

63%

16%

2%

2%

1%

1%

27%

3%

4%

2%

2%

1%

7%13%

20%

8%

15%

6%

7%

5%

7%

2%

7%

70%

61%

75%

78%

80%

2%

2%

11%

12%

11%

11%

12%

Overall channel usage




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Q. What is the most important factor in your banking relationship?

Convenience also key to non-resident Nigerians

10%

10%

10%

8%

7% 7%

3%

23%

12% 11%

Ease of use/ navigationof internet banking

platform

Quality of card products

Excellent customerservice

Variety of features and transactionsoffered via internet banking

Reasonable transactionfees and charges

Internet banking security

Ease of access to customercare/ relationship manager

Image and reputationof the bank

Financial stability

Ease of funding your account

With an annual growth rate of 3% overthe past five years and $21bn inflow ofpersonal remittances in 20131, Nigeriais the fifth largest remittance receiverworldwide in terms of volume. Remit-tance to Nigeria accounts for 65.6% oftotal flows into Sub-Saharan Africa.

This presents some opportunity forbanks who may want to tap into theopportunities created by this class ofNigerians who wish to transact bankingbusiness using their local bank accounts.

In an online survey of 127 Nigerians resi-dent across 12 countries who maintainlocal banking relationships, conveniencewas the overwhelming driver of value.When asked for the most important fac-tor in their banking relationships, 44% ofthe customers selected the availability of

internet banking. In particular, customersidentified the ease of use of the internetbanking platform as the most importantfactor followed closely by the quality ofcustomer service.

Interestingly, 77% of those surveyedtransfer money through formal channels- banks (48%) or through other moneytransfer agencies (29%) - compared to19% who said they typically send moneyhome through less formal ways i.e. fam-ily and friends travelling home.

On the effectiveness of the contactcentre, the ease of complaints resolutionwas cited as a major area of dissatisfac-tion. More than 50% of customers whohave used their bank’s contact centrehave been dissatisfied with the prompt-ness of issues resolution and quality of

feedback. For example, one bank’s re-sponse to a customer facing some debitcard challenges was for the customerto wait until his next visit home, for hisquery to be resolved.




1 World Bank, 2013


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Yet for every Zainab who is able and will-ing to leverage the internet for financialtransactions, there are four Davids whoare very active on social media but donot extend this activity to performingfinancial transactions using the internetbanking portal.

The proliferation of mobile phones thatare internet enabled as well as increasingbroad band penetration would appear tosuggest that the internet may presentbanks with the opportunity for a widecustomer reach at a much cheaper cost.

However, from our survey for customersaged 30 and below, eight-in-ten custom-ers never use internet banking. In a cos-mopolitan city like Lagos, the statisticsare slightly better with about 50% ofcustomers under 30 never using internetbanking. When compared with custom-ers aged 31 – 60, internet banking usageis surprisingly more frequent.

Internet banking users are a potentiallyattractive customer group for banks andby increasing the rate of adoption ofinternet banking, banks may be able to


tap into this potential with far more preci-sion. However, to do so profitably, banksmust stay true to three key principles.

Keep it simpleSome of the frustrations of internet bank-ing users lie in the complexity of naviga-tion and visual design of the internetbanking portals. While 90% of internetbanking users rated ease of navigationas being very important to user experi-ence, only 38% reported strong satisfac-tion with the ease of use of the variousportals available.


An overwhelming number of corporate customers (95%) rated security of their online corporate solution as their mostimportant element of online banking, followed closely by the ease of use as well as the convenience offered by online bank-ing. When questioned specifically on their level of comfort with the quality of online banking security, only 50% of custom-

ers reported strong satisfaction levels, others were of the opinion that there was room for further improvements. For ChiefFinancial Officers (CFOs) and Treasurers of corporate organisations, banks will need to focus on two priority areas to furtherimprove user experience and meet the evolving needs of corporate users.

Reporting CapabilitiesCorporate customers i.e. CFOs and Treasurers want banks to recognize the changing nature of their roles and thereforeprovide appropriate support especially in the area of reporting. This specific class of customers desire greater flexibility andoptions for customizing financial reports. Typical complaints centred around lack of sufficient detail in reporting of transac-tions as well as the inability to see at a glance, a consolidated view of all banking transactions and accounts across differentbanking relationships.

Integration and Real-time DataIncreasingly, real-time data is crucial to corporate planning, forecasting and decision-making. Thus, it is clear why corporatecustomers are demanding that banks provide reliable and accessible real-time data. A number of the corporate respondentssuggested that more banks should build capabilities to support integration between ERP platforms and banks’ proprietarye-payment solutions, thereby minimizing the need for manual intervention and ultimately reducing the risk of errors.

Online banking: Feedback from Corporates

A ew streets away rom the Marina, David can’t seem to stop chatting on any o his two mobile phones as he waits on a windingqueue to make a cash withdrawal at a nearby AM. He happily talks about his latest tweets as he approaches the AM. ‘I preernot to hold a lot o cash, I would rather use an AM or go to a branch to do my transactions’ he adds. On why he doesn’t perormhis banking transaction using the internet banking portal, he responds ‘my riends tell me it’s not easy to use so I’ve never reallybothered, besides there’s too much hassle to sign up’.

Meanwhile, as 27-year old lawyer Zainab waited outside the courtroom or her colleagues, her smartphone beeped with the amiliar acebook message alert. Tat was another reminder or her to send money or her riend’s wedding aso-ebi (abric). ‘We’renot going to the market again afer this’, the message advised. Zainab quickly logged into her internet banking account and sentN13,000. While she was at it, she thought it wise to quickly order the pair o silver wedge shoes she had seen on one o the onlineretail stores. A ew years ago, Zainab could only have imagined being able to conduct her financial transactions online and withsuch ease.

Internet banking:An underrated opportunity?

Frequency of Internet Banking Usage (Under-30s)

1%1%

73%

10%

8%

5%

Rarely

Weekly

Once every 2 weeks

Once a month

Never

No response

Seemingly insignificant changes suchas simplifying the number of stepsrequired to complete a transaction willgo a long way in improving the overallcustomer experience. In addition, thevisual design of the internet bankingportal is also a critical aspect of userexperience. Make it relevantTo retain today’s savvy and time-conscious online banking custom-ers, banks need to offer more robustinternet banking capabilities. The best-in-class banks from our survey have

continued to add features and function-alities that help improve the overall cus-tomer experience. For example, offeringcustomizable dashboards and integratingpersonal financial management toolswith internet banking can potentially in-crease engagement with customers andaddress the underlying need of custom-ers to manage their finances.

Be their own advocateWhere better to start than internal users?It is not uncommon to find bank employ-ees who do not use their bank’s onlinebanking platform. Employees should be

the starting point for generating intereston the bank’s online capabilities.

Too many opportunities are missedwhen frontline staff fail to capitalize onthe opportunity to offer this channel tocustomers.



12/19



While the adoption of electronic bankinghas provided some measure of conveni-ence and ease to customers, it is difficultto ignore the resultant security risks thatmay face customers and financial institu-tions at large. The growing popularity andconvenience of electronic banking hasfurther presented enhanced opportuni-ties for cybercrime. There is a far-reach-ing scope of threats that range from lowdegree crimes to high volume and valuecrimes, all with the potential to impactlarge corporations and individuals.

Cybercrime is here to stayIn a survey1 conducted by KPMG in theNetherlands, 80% of the respondentsindicated that cybercrime is no hype andwill continue to be a highly challengingtopic. The survey showed that 49% of or-ganisations have experienced some formof cybercrime activity during the past 12months. That is not to say the rest havenot experienced an attack; they may nothave the proper detection measures inplace. Among the 49% that have experi-enced an attack, 10% indicated that theyhave been attacked more than 100 timeswithin the past year. Inadequate detec-tion procedures may conceal the real

number of cybercrime attacks. Only 50%of the respondents were able to detectattacks and only 44% of the organisa-tions felt comfortable that they were ableto respond.

Awareness needs continuous effortsSecurity awareness and understanding ofrisks is crucial in cybercrime defence. Asattackers understand the risks of people,processes and technology and how toexploit them, so should organisations. Asa consequence, organisations should ask

themselves whether they are aware andcapable of handling a cybercrime attack.From our survey, we found that 35% donot agree that their organisation is suf-ficiently aware of cybercrime, althoughthe financial sector respondents scoresignificantly lower. This would imply thatfinancial institutions are more aware ofcybercrime than other typologies. As pre-viously discussed, the full scale of cyber-crime implications is often overlooked.The biggest loss companies perceive isdisruption of business processes, but isthis true or is it a lack of awareness?

Understanding the motives is keyAttacks may come by various methods


The increasing frequency and magnitude of cybercrime incidents globally make it ap-parent that cybercrime is here to stay. The Central Bank of Nigeria’s report for the firsthalf of 2013 noted that there were 2,478 fraud and forgery cases involving Nigerianbanks valued at over N20 billion. This represented an 8% increase over the previousyear volume but a sign ificant increase in value of over 200% from 2012. In this year’ssurvey, 2% of retail customers indicated that they had experienced a fraud incident inthe last year and while this number appears small today, it may signify the start of apotentially disturbing future trend.

Cybercrime: A growingchallenge for banks


and means. Organisations have experi-enced some form of ‘social engineering’attack such as phishing and compro-mised web applications according to33% of the respondents. The main mo-tives for attacks found are that organisa-tions are perceived as ‘low hanging fruit’for organised crime. Contrary to previ-ous trends, espionage is not a relevantmotivation for attackers, according to63% of the respondents. Since detectiveinternal control measures are currentlynot widely used by organisations, the

increased use of these internal controlmeasures might change the perspec-tive of organisations on the means andmotives of attacks. The financial sectorrepresents 67% of the attacks where theattacker’s motive was access to money.

When taking all sectors into account,consumer market companies are mostconcerned about disruption of busi-ness and production processes. Loss ofmoney, disclosure of intellectual propertyand other data are so far only recognisedas a cause of attack to a limited extent.

Technical areas at riskSome of the major technical areas athigh risk include email servers, webapplication servers, ERP systems,desktops, and unstructured data on file

systems (file servers). Mostly mentionedwere web application servers (38%),followed by file servers (16%) and mailservers (17%). Less frequent are attacksthat have penetrated ERP systems,desktops, and process control domains(


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heavily on and correlate with the budgetsthat have been made available. The dam-age from cybercrime attacks and budgetsallocated to cybercrime defence can besubstantial. Therefore, the way in whichcybercrime defence budgets are allocat-ed to prevention, detection and responsemeasures should be considered carefully.Approximately 19% of the organisationsin the survey spend more than 1.5 millioneuros on cybercrime prevention, detec-tion and response per year.

The damage caused shows that not onlydid financial organisations report almosthalf of all incidents resulting in damage,they were also the victims with the mostincidents in the highest damage bracket.Our survey results revealed that 75% ofthe over 1,500,000 euros attacks occur inthis sector. In general, our survey foundthat financial service organisations aremore aware of cybercrime than otherorganisations (80%).

How organisations should deal withthe challengeThe good news is that the survey revealsthat organisations are starting to givecybercrime the attention it deserves.More than 75% of respondents believe

that cybercrime should not just focus ontechnology. Furthermore, 90% believethat cybercrime should be discussed atboard level (55% strongly agree).

However, few organisations are well pre-pared. Only 20% say they can respondeffectively to an attack, but do not havean attack response plan in place. Approxi-mately 30% have forensic capabilitiesas a control and only 55% have centralincident and event monitoring. Thismakes it very unlikely that organisationsadequately respond to incidents. Evenif organisations have the capability toappropriately respond to an attack, howdo they ensure that the right informationis shared with management to activatethese response measures?

One of the findings of the survey is that – in general – preventive controls aremore popular than detective controls anddetective controls are mentioned moreoften than responsive controls. Further-more, the results indicate that there ismore emphasis on internal measuresthan on external measures. Proceduralanalysis is most popular, followed byfact finding (forensic) investigation andpenetration testing.

Key controlsDeveloping controls and an effectiveframework for cybercrime defence arefundamental to helping organisationsthink like a criminal to understand thethreat. In this respect, three fields ofaction – prevention, detection and re-sponse – deserve proper attention.

PreventionFirstly, prevention schemes start withgovernance and organisation. Relevantquestions are: Are responsibilities as-signed relating to cybercrime? Are thereawareness training programmes in placefor key employees in high risk areas?Secondly, cybercrime response testing(simulation) and regular scanning andpenetration testing are processes thatare used to assess the organisation’sdetection readiness. Lastly, actions suchas end-point workstation protection andcomputer network segmentation canhelp prevent attacks via technology.

DetectionLogging of critical events and monitor-ing central security incidents and eventswill strengthen the technology detectionmeasures. Monitoring and data miningis an excellent tool to detect strange

“My employer insists on remaininganonymous, but rest assured, he is quiteresourceful. He approached me a fewweeks ago with a job offer. The goal heset was quite ambitious: steal as manysecrets from the government as you can.Let me tell you about the steps I took.

First, I sat down to think about what Iknew about the government’s IT infra-structure. At a conference last fall, I hadmet an IT director of a ministry who hadtold me that all firewalls for the govern-ment were supplied by the same vendor,company Y. Hacking such a firewall wasa formidable task - not something I wasready to take on directly. Instead, I took amore indirect approach.

I logged in to LinkedIn and searched foremployees of software developmentcompanies who mentioned company Yas one of their clients on their LinkedInprofile. Many professionals mentionprestigious client names in their profile,even when company policy prohibitsname dropping. Shortly after, I foundmultiple software vendors which makeniche software and listed company Y asa client. I visited the vendors’ websitesand scanned their externally reachableIP addresses until I found one which hadan unpatched vulnerability in their webserver: company X. After a day’s work, Iwas inside their network.

Company X is a small organisation andthey do not feel they need network seg-

mentation, so I was able to reach all ma-chines on their internal network throughthat web server. After some more work,I was able to elevate my privileges todomain administrator, which meant I hadfull access to all of their systems.

This was where I hit a bump. I intendedto change the source code of theirproduct in such a way that it would allowme to connect remotely to the systemof anyone who installed it, but I hadnever done that before. I then decidedto log on to a hacker forum and posted arequest for help. I offered 10,000 eurosreward for a job well done. After a while,I was approached by someone who waswilling to help me. I asked around to con-firm his reputation in this field. I enlistedhis help in modifying the source code ofthe main product of company X.

The security policies of company Y werevery strict: only the system administra-tors can install software on the worksta-tions, and both incoming and outgoingtraffic goes through a proxy server. Luck-ily, the virus which my associate hackerhad written communicates throughDNS, which was not actively monitoredor filtered. The software from companyX was updated on a regular basis, andafter three weeks I received a messagewhich indicated that I had access to theirworkstations.

I called on my associate hacker oncemore, but this time for a more advanced

task: reprogramming the firmware of thefirewalls which company Y produces. Heindicated that he needed the help of acontact who installed a backdoor in allfirewalls for another 20,000 euros. Now,all I needed to do was wait for the nextupdate of the firmware. I posted somefake security vulnerabilities for the currentversion of this firmware, to ensure thatthe firmware would be upgraded timely.And slowly but surely, I gained access toall internal networks of the government.

I could then route any traffic which flowsthrough any government network throughmy own computer. I can also read allemails which are sent between govern-ment employees internally. I can findvulnerable servers by scanning the net-works. In almost all the internal networks,I have found at least one server which Ican exploit. I installed backdoors on hun-dreds of workstations which allows methe ability to monitor email servers, soemails with interesting attachments canbe forwarded to me. Additionally, I haveobtained login credentials for almost allmajor government databases.

Every day, almost two hundred gigabytesof government secrets are sent to me au-tomatically. This amount is only limited bythe amount of bandwidth I can get, andthe number of hard disk drives I install.I’m being paid 100 euros per gigabyte ofinformation. I will leave it to you to calcu-late my hourly wage.”

Understanding the perspective of an attacker is essential for everyone involved in fighting cybercrime. For that reason,we interviewed one of our professionals – an ‘ethical hacker’. He relayed us an intriguing fictitious story. It is up to you to

judge how realistic this threat would be to your organisation.

An attacker’s perspective

patterns in data traffic, identify whereattacks converge and observe systemperformance. This way, information secu-rity becomes a continuous process andorganisations are enabled to proactivelyanticipate instead of reactively act onincidents.

ResponseMost organisations are not preparedfor an actual attack. The survey revealedthat only 25% have a cybercrime re-sponse plan, and 29% have performedcyber response testing. Organisationscan sharpen their governance and riskmeasures by organising a 24x7 standbycrisis strategy. In addition, procedures for

follow-up on security events will be help-ful in response to cybercrime. Responsemechanisms can be refined to focus onhaving forensic capabilities ready andavailable in the event an attack occurs.The forensic team will need a cybercrimeresponse plan to determine what ac-tions to take. Once an attack occurs, theorganisation should have the capabilityto promptly cut off all technology im-pacted. When developing a response andrecovery plan, it is important to consider(information) security as a continuousprocess, and not a ‘one-off solution’. Inci-dents cannot be precluded 100 percentof the time; this implies that detectionand response are equally important, and

often this is also the area with the biggestroom for improvement. Measures todetect and respond to cyber attacks arenot only important for the organisationitself. Rather, pro-actively notifying chainpartners of possible break-ins, along withinformation about the nature of the attackand possible motivation of the attacker,may prove crucial to breaking a chainedattack before it reaches its ultimate goal.


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Given that customers interact with theirbanks through a multiplicity of channels– 26%of customers use at least three

channels – the quality of experience inone channel is bound to impact expec-tations on others. As a result, a poorexperience with one channel can under-mine overall customer experience. Thus,consistency is key as customers shouldhave the same quality of experience nomatter which channel they choose.

For channels that encourage physical in-teractions with customers e.g. branches,our survey findings reveal that one-in-four retail customers reported staffattitude as the single most importantarea of improvement for banks. Despitea marginal year-on-year increase (43% to44%) in retail customers reporting strongsatisfaction with staff attitude, there isyet a considerable gap of expectation –94% of customers expect significantlyimproved customer service especiallyin branches. Overall, 70% of customersthat were dissatisfied with staff attitudeindicated their willingness to leave theirbanks.

While we acknowledge that there is no

“silver bullet” to changing the culture ofan organisation, organisations that suc-ceed do so by identifying and aligning allorganisational change levers to facilitatesustainable change. At the very least,banks looking to embed a strong ser viceculture should have the following:• Clearly defined standards: Are there

clear service standards? Where theyexist, are they clearly and consist-ently communicated, eliminatingambiguity on how employees ad-dress difficult customer scenarios?

• Executive-level commitment: therehas to be visible commitment andinvolvement at the highest levels to

promote a culture shift to excellentservice delivery. Banks and otherfinancial institutions have a lot tolearn from some other industriesthat have instituted a “Chief ServiceOfficer” role that ensures servicegets the right level of visibility in theorganisation.

• A structured approach to manag-ing people risk: is talent risk part ofthe bank’s wider risk managementframework? What are the criticalfunctions and roles – the areas ofthe organization with the biggestimpact on service delivery?

No doubt, banks continue to facerevenue pressures and an increasinglycompetitive marketplace but it is impera-

tive to strike the right balance betweenthe bank’s and the customer’s interests.More banks have to move away from asuperficial view of customers where therelationship manager is perceived as onlybeing interested in the next transaction.Indeed, relationship management needsto progress from being transaction-basedto forming genuine partnerships withcustomers where real conversationsabout the customer’s needs are held andprioritized above all else.

Customer care:Consistency matters

Retail CorporateSME

Top three banks by CSI rating - Customer Care

1. Zenith2. GTBank 3. Citibank

1. Zenith2. Standard

Chartered3. GTBank

1. GTBank 2. Diamond3. Zenith


Consistency is key as customers should have the samequality of experience no matter which channel they choose.


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Corporate customers continue to com-plain that banks need to invest a lot moretowards a deeper understanding of their

businesses and industry. That way, theyfeel that banks will be able to supporttheir needs in a more proactive and com-prehensive manner.

Some improvements have been notedin this area i.e. more customers haverated banks higher this year than inprevious years for satisfaction with thelevel of understanding of client’s busi-ness and industry. For example, a CFOcommented, “The nature of our conver-sations with our key banking partnershave changed. It appears they have goneahead to recruit people from our indus-try, that actually understand our businesscycles and funding requirements, to join

their team.” Another corporate customercommented: “it is clear that their abilityto leverage international expertise better

prepares them to design solutions thatmeet ou r needs”.

However, when questioned on banks’ability and responsiveness towardsdesigning fit-for-need solutions, only 29%of corporate customers were very satis-fied with their bank’s ability and willing-ness to tailor solutions to their needs.Indeed, across all three segments,product suitability was rated as one ofthe most important service measures forcustomer satisfaction.

While the retail and SME customersegments reported slight increases insatisfaction with product suitability, there

Interest in Loans vs. Satisfaction

was no change in the corporate seg-ment. For corporates, there was someimprovement in satisfaction levels with

the quality of e-payments and collec-tions capabilities. In our estimation, wefeel that the issue may not necessarilybe that quality has declined — in manyinstances banks have made considerablymore investments — it is that customerexpectations have increased.

Access to credit facilities also continuesto remain a significant challenge for retailand SME customers. Despite majority ofcustomers in both segments expressinginterest in accessing loans, only abouttwo in ten customers are very pleasedwith the ease of access to credit facili-ties.


Product relevance:do you get it?

91%

Interest

22%

Satisfaction

78%

Interest

13%

Satisfaction

SME Retail

Retail CorporateSME

Top three banks by CS I rating - Products and Services

1. Zenith2. Citibank 3. GTBank

1. StandardChartered

2. Diamond3. Zenith

1. Diamond2. GTBank 3. Standard

Chartered

Across the three customer segments,more customers reported higher satisfac-tion levels with banks’ turnaround time

for processing transactions. In particular,speedy transactions processing wasthe most important service measure forSMEs and corporate clients with morethan 96% of these customer segmentsdescribing it as critical to their bankingrelationships.

Long queues at branches and ATMscontinue to remain a point of hassle for

customers. A majority of customerssurveyed were quite dissatisfied with thealmost habitual queues in bank bra-

nhces, even for performing transactionsconsidered to be routine e.g. checkingaccount balances and making depositsetc. Banks can alleviate these concernsespecially where they are unavoidable bysetting minimum wait time expectationsfor routine transactions.

Many leading practice examples aboundin other service oriented industries such

Retail CorporateSME

Top three banks by CSI rating - Transactions, Methods and Systems

1. Zenith2. GTBank 3. Citibank

1. StandardChartered

2. Diamond3. Zenith


as telecoms. For example, telcos leverag-ing queuing systems, set wait time expec-tations and at the same time allow custom-

ers to browse products while waiting.

For banks, reducing the number of screensand prompts at ATMs may reduce the aver-age transaction time and improve overalluser experience.

The turnaround timechallenge



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Key takeaways

30 | Banking Industry Customer Satisfaction Survey 2014

The quality of service and customer experi-ence is clearly shaping the competitive land-scape in the banking industry. While the gaphas narrowed in the retail segment, a fewbanks are clearly ahead of the pack in the cor-porate segment.

Our thoughts on what banks can do better include:

• Target delivery of consistent customer experience across allchannels by embedding a customer-centric culture across thebank.

• Continue educational initiatives to further drive adoption ofalternate channels with particular attention to clarity of lan-guage and communication.

• Ensure data and systems can provide a single view of thecustomer across channels to aid understanding of whatcustomers want, how they want to interact with the bank andhow to deliver the service.

• Continue to invest in enhancing knowledge of their custom-ers’ businesses, combining these insights with technology toimprove the quality of solutions to corporate customers.



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The survey was conducted between February and April 2014.Majority of the interviews were conducted in person acrosstwenty-eight major cities in Nigeria, targeting a minimum num-ber of respondents for a representative sampling across the 21banks.

We would like to thank all respondents who took part in the survey,particularly those who participated in in-depth interviews and providedimportant insights and contributions.

We are also grateful to Communications and Marketing ResearchGroup (CMRG), KPMG Nigeria partners and staff as well as GerbenSchreurs, Ladi Asuni and Mike Davidsen for sharing their insights.

The KPMG project team: Bode Abifarin, Wale Abioye, ChiamakaOguonu and Adeleke Okunlola.

AcknowledgementsSurvey locations

Sokoto

Katsina

Kano

Yola

Jos

Bauchi

Makurdi

EnuguNnewi

Owerri

Onitsha

CalabarUyo

Aba

Port Harcourt

Osogbo

Ilorin

Ibadan

Lagos Benin Asaba

AkureAbeokuta

Lokoja

Abuja

Kaduna

Minna

Ado Ekiti



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kpmg.com/ng

The views and opinions expressed herein are those of the survey respondents and do not necessarily represent the views and opinions of KPMG.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it isreceived or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after athorough examination of the particular situation.

© 2014 KPMG Advisory Services, a Nigerian partnership, member firm of the KPMG network of independent firms affiliated with KPMG InternationalCooperative (“KPMG International”), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate orbind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind anymember firm. All rights reserved.

Any trademarks or service marks identified in this document are the property of their respective owner(s).

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

Printed in Nigeria Publicationname: Banking Industry Customer Satisfaction Survey Issuenumber:8 Publicationdate: July 2014

Key Contacts

Bisi LamikanraPartner and HeadManagement ConsultingT: +234 704 527 6005E: [email protected]

Ngozi ChidozieManagement ConsultingT: +234 704 527 6024

E: [email protected]

Bode AbifarinManagement ConsultingT: +234 704 527 6485E: [email protected]

Marie-Therese PhidoMarketing, Knowledge & CommunicationsT: +234 704 527 6012E: [email protected]
https://twitter.com/KPMG_NGhttps://www.facebook.com/kpmg.nigeriahttps://www.linkedin.com/in/kpmgnigeria

2014 kpmg banking industry customer satisfaction survey

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