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Banking

Africa Banking Industry Customer

Satisfaction Surveyapril 2013

kpmg.com

www.kpmg.com

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

1. This is a perception study

• Thissurveyfocusesontheperceivedqualityofcustomerservicedeliverybythebanksfromtheretailbankingcustomers’perspectiveacross14countriesinAfrica.

• ThissurveydoesnotrepresenttheopinionofKPMGontheskills,capabilitiesorperformanceofanyofthebankscoveredinthesurvey.

• KPMGconductsthesurvey,butfindingsrepresenttheopinionsofthecustomersofthebanks.

• KPMGisresponsiblefordefiningthesurveyquestionnaireadministeredtotherespondents.

Thissurveydoesnotseektoestablishanythingasanabsolutefact,buttoreportonthefeelingsandbroaderperceptionsofcustomerswithrespecttoservicesprovidedbytheirbanks.Therankingsaresolelybasedonthecustomers’feedbackreceivedfromthesurvey.

2. Perception is neither balanced nor fair, but the study always has a representative sample size

Perceptionsarebydefinitionsubjective;asaresult,theyareneitherbalancednorfair.Also,banksratedinthesurveyvarybysize,serviceofferingsandcustomerprofile.However,theminimumnumberofrespondentsrequiredforeachbankinthesurveyguaranteesthattheresultreflectstheopinionofarepresentativecustomergroup(seepage5forthemethodology).

Convenience Customer Care

Products &Services

Pricing

Transactions,Methods &Systems

CSI Formula(S x I)

∑I

Customer Service Factors

CSI = Customer Satisfaction Index; S = Satisfaction; I = Importance

Measures accessibility and quality of service from delivery channels

Convenience

Measures interaction of bank staff with customers

Customer Care

Measures customer support processes/systems & turnaround time

Transactions, Methods & Systems

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

Pricing

Measures product range and appropriateness to customers’ needs

Products & Services

BankingIndustryCustomerSatisfactionSurveyMethodologyTheCustomerSatisfactionIndex assignsimportanceratingsofservice theirbanks.Respondentsinthesurvey(CSI)wasusedinthissurveyto measures to the satisfaction ratings wereaskedtoratetheirbanksonthedeterminecustomersatisfaction. ofthosemeasuresasprovidedby followingcustomerservicefactorsCSIissimplyaweightedscorethat customersontheservicedeliveryof discussed in more details below:

Customer Satisfaction Index (CSI)

© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.

Contents

Foreword 2Executivesummary 4

Top5mostcustomer-focusedbanks 6Relationshipissues 10

Customercare 12Productsandservices 16

Channels 20Loyalty 26

Serviceexpectations 28Pricing 30

Countryhighlights 31Demographics 90

Acknowledgements 91© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.

Amidsttheglobaleconomiccrisis,severalAfricaneconomieshavecontinuedtorecordsignificanteconomicgrowthdrivenbyrisingcommoditypricesandstrongdomesticdemand.Inthesamevein,thefinancialservicesindustryiscontinuingtoexperiencehugegrowthasgovernmentsandregulatorsstrivetomeetfinancialinclusiontargets.Thebankingsectorinparticularhasbenefitedfromtherapidpenetrationofmobiletechnologyinrecentyearsacrossthecontinent–averygoodexamplebeingthesuccessofmobilepaymentsinKenya.Suchtechnologicaladvancementsarenotjustshapinghowpeopleinteractwithoneanother;theyarealsochangingthebehaviourandexpectationofbankcustomerswhoareincreasinglybecomingusedtotheimmediacyofferedbytechnology.

Wehavealsoseentheinfluxofinternationalplayersandpan-AfricanexpansionofAfricanbanksindifferentmarkets,asignoftheongoingliberalizationofmanyeconomiesaroundthecontinent.Assuch,thebankingindustryisbecomingevenmorecompetitiveandthiscanonlybenefitthecustomerasbanksstrivetomeettheirdemandsthroughthedevelopmentofvariousserviceinitiativestowintheirloyalty.However,intheracetomaximizemarketshare,andultimatelyshareholdervalue,itbecomesimperativeforbankstokeepthevoiceofthecustomerattheforefrontoftheirstrategies.Thus,theroleofsatisfiedandloyalcustomersinattainingprofitabilitycannotbeoveremphasized.

Withthisinmind,theKPMGProjectAfricaBankingteamchallengeditselfonprovidingaplatformtounderstandcustomerpreferences,levelsofsatisfactionandexpectationsfromtheirbanksaswellashowbankscanrethinktheirbusinessandoperatingmodels,wherenecessary,inordertoremaincompetitive.

Thus,IamverypleasedtointroducetheinauguraleditionoftheKPMGAfrica-wideBankingIndustryCustomerSatisfactionSurveyinwhichweprovideinsightsandresultsfromoursurveyofover25,000retailbankingcustomersfrom14countriesacrossAfricaincludingAngola,Botswana,Cameroon,Chad,Côted’Ivoire,Ghana,Kenya,Nigeria,Senegal,SierraLeone,Tanzania,Uganda,ZambiaandZimbabwe.

ThesurveyresultsrevealthedominanceofbranchesandtheAutomatedTellerMachine(ATM)overotherchannelsinAfrica.However,wealsoseeexcitingtrendsfor adoption of alternate payment channels, such as in Botswana where nearly half ofrespondentsusethePointofSale(POS)atleastonaweeklybasis,whichmaybepartlyattributabletothelevelofdevelopmentofthecountry’sbankingsector.

“MorethanoneintwoinstitutionalinvestorsseeAfricaasthemostattractiveregiontoinvestinthenextdecade,withoneinthreeexpectingtoputatleast5percentoftheirportfoliosintothecontinentby2016”.1

Foreword

Bisi LamikanraPartner,KPMGNigeria,TeamLead, ProjectAfricaBanking

1 Reuters,basedonapollofinstitutionalinvestorsbyEIU.

Over25,000retailbankingcustomersfrom14countriesacross africa including angola, Botswana,Cameroon,Chad,Côted’Ivoire,Ghana,Kenya,Nigeria,Senegal,SierraLeone,Tanzania,Uganda,ZambiaandZimbabwe.

2 |AfricaBankingIndustryCustomerSatisfactionSurvey


Whilstinfrastructuralchallengesremain,manycustomersexpresswillingnesstocarryouttransactions,suchaswithdrawals,viatheATM.

Perhapsunsurprisingly,financialstabilitywastheleadingreasonformaintainingbankingrelationshipsin11ofthe14countriessurveyed.Thisisareflectionoftherecentwaveofregulatoryinterventionsacrossthecontinentfocusedonthereviewofthenewminimumcapitalforbanks,therebyincreasingthecustomer’sawarenessofthestateoftheindustry.Respondentsinmanycountriesalsoexpressedchallengeswithtransactionturnaroundtimes.

However,thefeedbackisclearthatAfricanbankshavecomealongway,butthere isstillmuchfurthertogotomeettheexpectationsofcustomers.

Ihopetheinsightsinthisreportmakeacompellingreadand,onbehalfoftheteam,Iwouldliketoseizethisopportunitytothankallthosethatofferedtheirvaluabletimetocompletethesurvey.

AfricaBankingIndustryCustomerSatisfactionSurvey | 3


Executive summary


Africanbankingcustomershavebeenfairlyclearaboutwhattheyexpectfromtheirbanks.Andtheyhavebeenequallyclearaboutwhattheyarenotyetgetting.

Being strong yet approachable

Accordingtooursurvey,banksinAfricawillneedtofocusonmaintainingtheirfinancialstabilitywhilesimultaneouslysharpeningtheircustomerservicecapabilitiesiftheyhopetocaptureandgrowtheirmarkets.

Indeed,whilemorethanoneinfiverespondentssaidthattheirtopcriteriaforselectingabankwastheirabilitytoremainstable–anunderstandablerequirementgiventherashofbankingcollapsesaroundtheworldrecently–itwasattentiontocustomerservicethatseemedtoseparatetheleadersfromtherestofthepack.

Customercarefactorswereseenasbeingamongthemostimportantindicatorsformanyrespondents,leadingalmosthalf(43percent)tosaythattheywouldchangetheirbanksasaresultofpoorservicequality.Notsurprisingly,therefore,customerswerealsoquicktocallforimprovementsinthisarea;around16percentsaidtheywantedtoseefriendlierstaffwhile14percentsaidtheywouldlikefasterandmoreeffectivecomplaintsresolutionfromtheirbanks.

Improve it or lose itThesurveyalsohighlightsanumberofotherkeyareaswhereAfricanbankscouldmakeimprovementsinordertogainmarketadvantage.Oneinfiverespondentsprioritizedareductioninwaittimesfortransactionprocessingandrequestsastheirtopareaforimprovementwhile17percentsaidtheywantedtoseeimprovementsinthewayservicesaredeliveredthroughchannels.

Asouranalysisinthisreportsuggests,alternatebankingchannelsarenowstartingtogainafootholdinmanymarkets,creatinganotheropportunityforbankstodifferentiatethemselvesandbuildloyaltyamongcustomers.Already,morethansix percentofrespondentssaidtheywouldswitchbanksiftheyofferedmoreinnovativeproductsandservicesversuseightpercentwhosaidtheywouldswitchbecauseoftheproximityofbranches.

Ranking the banks

TogainaclearpictureofcustomersatisfactionwithAfrica’sbanks,weaskedrespondentstojudgetheirbanksacrossfivekeyareasthat–inourexperience–holdthegreatestinfluenceovercustomersatisfaction:

Customer care: Africanbankingcustomersoverwhelmingly(94percent)voted‘stafffriendliness’asthemostimportantfactorinfluencingtheirsatisfactionwiththeirbank.Yetwhileeightintenexpressedsatisfactionwiththiselement,resultsforothercustomercareelementswereratherweakacrossthecontinent:justthreeintencustomerssaidtheywereverysatisfiedwiththeirbankstaff’sknowledgeofbankingproductsandonlytenpercentindicatedthattheywereextremelysatisfiedthattheircomplaintswerebeingpromptlyaddressed.


Transaction methods & systems (TMS): When asked whatpartoftransactionmethodsandsystemswereimportanttocustomers, interestingly turnaround time for transactions processing and accuracy ofinformationprovidedbybankswereofequalimportance.However,theresultsrevealedhighersatisfactionwithtransactionturnaroundtime(81percent)comparedto71percentwhoweresatisfiedwiththeaccuracyofinformationprovidedbytheirbanksinaccountstatements,adviceslipsandbasisofbankcharges.

Pricing:Whenitcomestovalueformoney,almostoneinfiveofAfrica’sbankingcustomersexpresseddissatisfactionwiththecostofmaintainingtheiraccountswhile15percentsaidtheywereindifferent.Respondentsalsosaidtheywouldliketheirbankstobemoreproactiveinnotifyingthemofchangesininterestrates,tariffsandtermsandconditions.However,interestrates seemed to be the biggest pricing frustration for respondents in 12 of the 14countriessurveyedwhosaidtheywereleastsatisfiedwiththeratestheywereofferedfordepositsandinvestments.

Products and services: RespondentsacrossAfricawerekeentoseetheirbanksimprovetheirproductandsupportofferingswiththesuitabilityof product offerings being cited as the top factor in this category in nine of the 14countriessurveyed.Seventypercentsaidthattheydidnotfeelthattheyreceivedtheassistancetheyneededtounderstandtheirbank’sproductsandhowtoaccessthem;lessthan10percentadmittedbeingverysatisfiedwiththewaytheirbanksdeliveredtheirproducts.

Convenience: Itshouldcomeasnosurprisethat99percentofrespondentssaidthattheystillusebranches.However,itisclearthatATMsarebecomingavitalpartofAfrica’sbankingsystem;85percentofrespondentssaidtheyuseATMs,withhalfsayingtheyusethemonaweeklybasis.AndwhileotheralternatechannelshaveclearlydemonstratedvalueinAfrica(POSinBotswanaenjoys69percentusagewhilemobilebankinginKenyahastopped50percentusage),thisreportshowsthatadoptionhasbeenslowinmostmarkets.

Analyzing the data

Inthefollowinganalysis,ourAfricanbankingprofessionalshavedeconstructedtheresultsandemergingtrendstodeliverinsightsonmanyoftheotherkeytopicsraisedinthissurvey.ImranMoten,aprofessionalwithKPMGinSouthAfrica,offerslessonsfromhiscountry’sbanks;GoncaloTraquinawithKPMGinAngolaexaminesleadinginnovationsandcustomerfocusedstrategies;JimmyMasindeexplorestheexplodingsuccessofmobilebankinginhisnativeKenya.

Ourreportconcludeswithanin-depthmarket-by-marketanalysisofthedatathatlaysoutthekeychallengesandopportunitiesforbanksoperatingineachofthe14marketssurveyedandidentifiestheleadingbanksineachcategoryofcustomersatisfaction.



Top 5most

customer-focusedbanks

ThissurveywasconductedbetweenJuneandDecemberof2012withtheexceptionofNigeriaandZambiawhereitwasconductedearlierin2012.Over25,000respondentsweresurveyedinpersonacross

14 countriesinAfrica.Akeyconsiderationinselectingthesamplesizewasthebankingpopulationofeachcountry.Thesurveylocations in

eachcountrywereselectedbasedonthelevelofcommercialactivity anddensityofbankbranches.

Aquickglanceattheresultsrevealsthedominanceofbankswithmulti-countrypresenceacrossthecontinent.Someofthesebankshavesucceededinreplicatingthehighservicedeliveryperformanceestablishedintheirhomecountriesinothermarketstheyplayin.

Theirsuccesscanbepartlyattributedtostrongknowledgeofthelocalmarketandleverageontechnology.GTBank,ZenithandUnitedBank

forAfrica(UBA)appearintoppositionsandseemtodominatetheWestAfricancoastwhileStanbic,DiamondTrust,KenyaCommercialand

EquityBankshowastrongpresenceinEastAfrica.



67.2 Banco Privado AtlanticoBanco de Negocios ANGBanco Caixa ANGBanco BAI MF ANGBanco Espirito ANG

67.166.766.165.7

73.3 Bank GaboroneFirst National BOTStanbic BOT

Barclays BOTStandard Chartered Bank BOT

73.372.271.370.4

73.8 GTBankZenithUT BankCal Bank

Bank of Africa Ltd

71.170.970.669.0

68.3 Banque l’Agriculture (BFA) UBA – Cote d’Ivoire

Banque l’AfriqueEcobank CIVSGBCI CIV

66.565.665.465.4

BotswanaBankGaboroneandFirstNationalBankweretiedatthetopasthemostcustomer-focusedbank,withStanbiccomingthird.BankGaboroneisarelativelynewentrantintothemarketwithonlysixyearsinoperationwhilemostoftheothertopbanksaremoreestablishedplayersintheindustry.

CameroonBanqueInternationaleduCamerounisthemostcustomer-focusedbank,followedbyUBAandAfrilandFirstBankinsecondandthirdposition,respectively.

ChadCommercialBankTchademergedinthetopposition,followedbyBanqueSaheloandSociétéGénéraleinsecondandthirdposition,respectively.

Côte d’IvoireBanquepourleFinancementdel’Agricultureemergedinfirstpositionasthemostcustomer-focusedbank,withUBAandBanqueinternationaledel’Afriquedel’Ouest-Côted’Ivoirecominginsecondandthird,respectively.TheappearanceofBanquepourleFinancementdel’Agriculture(aspecializedbank)inthetoppositionshowsitscapabilityasastrongplayerinthecommercialbankingspace.

GhanaGTBankemergedinfirstplace,followedbyZenithBankandUTBank,respectively.Incontrasttothetoptwobanks,UTBankisanindigenousbankthatwaspreviouslyanon-bankfinancialservicesprovideruntil2008whenitacquiredamajoritystakeinanotherlocalplayer–BPIBank.Thetopthreebanksareallrelativelynewtothemarketandthushavebeenworkinghardtowinovercustomersfromtheolderbankswhilstalsotargetingtheunbankedpopulation.

AngolaRespondentsinAngolaselectedBancoPrivadoAtlanticoasthemostcustomer-focusedbankcloselyfollowedbyBancodeNegócios.BancoCaixaemergedinthethirdposition.

68.0 Banque Internationale

Afriland CAMUBA CAM

Société CommércialeSociété Générale

64.663.8

62.161.2

67.9 Commercial BankBanque Salelo

Société GénéraleEcobank

UBA (Chad)

65.561.360.4

53.0



68.8 GTBankUBAZenithFirst InternationalUnion Trust

68.367.667.467.3

75.3 StanbicAccessAkibaEximCRDB

74.674.574.174.1

82.5 Stanchart BankDFCU BankHousing FinanceCentenaryDiamond Trust

78.678.577.977.2

77.9 GTBankZenith

StanbicDiamondFidelity

77.776.175.775.0

SenegalBanqueIslamique,anichebank,emergedinfirstpositionwhileCBAOGroupeandBanqueInternationaleoccupysecondandthirdpositions,respectively.

NigeriaGTBankemergedasthemostcustomer-focusedbank,followedbyZenithandStanbicIBTCinthesecondandthirdposition,respectively.

Sierra LeoneTheresultshighlightvastchangesexperiencedinthebankingsectorwiththeinfluxofsub-regionalfinancialinstitutionsduetoliberalisationoftheeconomyinthepost-warera.SurveyrespondentschoseGTBankasthemostcustomer-focusedbankwhileUBAandZenithBankoccupythesecondandthirdpositions,respectively.

TanzaniaAccordingtorespondentsinTanzania,Stanbicisthemostcustomer-focusedbankfollowedbyAccessandAkibawhoseCSIwereveryclosewithapercentagepointdifferenceof0.1 percent.

UgandaStandardCharteredemergedinthetoppositionbyawidemarginaheadofDFCUandHousingFinance.

KenyaRespondentschoseCFCStanbicasthemostcustomer-focusedbankfollowedbyKenyaCommercialBankandEcobank,respectively.

76.1 CFC StanbicKenya CommercialEcobank KENCooperative KENPost Bank

74.474.474.174.0

63.8 Banque IslamiqueCBAO Groupe SenegalBanque InternationaleUBA SENSGBN SEN

62.362.061.160.9



67.2 BancABCTN Bank Ltd. FBC BankKingdom BankBarclays ZIM

66.166.065.264.8

ZimbabweBancABCisthemostcustomer-focusedbankwithTNBankandFBCBankcominginsecondandthirdposition,respectively.



Relationship issuesFinancial stability – Still the top reason for maintaining banking relationshipsTheemergenceoffinancialstabilityas the topmost reason for maintaining bankingrelationshipsisnosurprisecomingontheheelsofthefinancialcrisis that hit the world economy in 2008.Althoughtheimpactofthecrisiswas not as profound in africa as in EuropeandtheUS,therippleeffectswereenoughtoshakecustomers’confidenceintheirbanks.Despitetheinterventionofregulators,thesurveyresultssuggestthatmoreneeds to be done to restore customer confidenceintheindustry.Continuouscollaborationbetweenbanksandregulators is essential in ensuring that customers are correctly informed about

newregulatoryprovisions,aswellassignificantindustryevents.

Analysisofsurveyresultsrevealedthat21.4 percentofrespondentsrankedFinancial Stability as the most important reason for maintaining bankingrelationships,followedcloselyby Excellent Customer Service that had19.7 percent.Adifferenceof1.7 percentpointsbetweenthetoptworationalesformaintainingabankingrelationshipfromthecustomer’sperspectiveindicatesthevalueplacedonthesechoices.Thispresentsanopportunityforbankstodifferentiatethemselvesinbothareastoenablethemtostrengthentheircustomerbase.

Despite the intervention of regulators, the survey results suggest that more needs to be done to restore customer confidence in the industry.

Africa-wide rationale for maintaining banking relationships

Financial stability

Excellent customer service

Image and reputation

Proximity and accessibility of branchnetwork

Employer requirements

Proximity of alternative delivery channels

Pricing/cost of products and services

21.4%

16.0%

13.0%

10.0%

9.0%

19.7%

10.5%



Atthecountrylevel,customersfrom11outof14countriessurveyedchose‘financialstability’astheirtopreasonformaintainingbankingrelationships,whilerespondentsfromGhana,ZambiaandSenegalchose‘excellentcustomerservice.’Thebankingindustriesinthesecountrieshavebeenrelativelystable;asaresult,asignificantnumberofcustomersappeartobesatisfiedwith the security of their funds with

theirbanks.Ofthecountrieswithfinancialstabilityasthekeyreasonformaintainingbankingrelationships,Kenya,Côted’IvoireandNigeriahad the highest percentage of total respondents.Theresultshighlightcustomers’apprehensiontowardsbanksinKenya,especiallythesecondtierbanksthataremostlyfamily-owned,coupledwiththefactthatamajorbankrecentlywentunderreceivership.


Financial stability

Reasons for maintaining banking relationships across Africa

Senegal20%

Ghana17%

Sierra Leone17%

Côte d’Ivoire

28%

Nigeria27%

Chad18%

Cameroon17%

Uganda21%

Kenya28%

Tanzania20%

Zimbabwe18%

Botswana16%

Angola26%

Maintaining banking relationships: 11 out of 14 countries choose financial stability.

Top reason for –



Customercareisaveryimportantfactorinanyserviceindustry,moresoinbankingwherecustomersconstantlyrelatewithstaff.In8ofthe14countriesrespondentsselected‘friendlinessofstaffandtheirwillingnesstoassist’as the most important measure ofcustomercare.Thisshowsthatbeyondhavingpleasantandseamlessexperienceviatechnologicalchannels,customersalsodesiretohavethesameexperiencewhileinteractingwithbankstaff.Theresultalsofollowsfromthereasonsformaintainingbankingrelationship,where‘excellentcustomerservice’waschosenasthesecondmostimportantreason.Ofallthecustomercareelementsmeasuredinthissurvey,94 percentofrespondentsselected‘friendlinessandpolitenessofstaffandtheirwillingnesstoassist’asthemostimportantelementtothem;8in10respondentsexpressedsatisfactionwiththiselement.Staffknowledgeofthebank’sproductswasratedasverysatisfactory by 3 in 10 customers, while

Customer care“Don’topenashopunlessyouliketosmile” Chinese proverb

Only1in10areextremelysatisfiedwithpromptattentiontocomplaints.


Products &Services

Pricing


only1in10areextremelysatisfiedwithpromptattentiontocomplaints.

Providingexcellentcustomerservicefrom the time a customer steps onto thebank’spremisesuntilhe/sheleaveswouldgoalongwayinwinningcustomers.Thebranchiscurrentlythemost widely used channel in africa and also, the channel with most human contact.Banksneedtoensuretheircustomer-facingstaffunderstandthebankscustomercarevalues.Customer-facingstaffneedtopositivelyprojectthe brand and act as ambassadors by deliveringservicewithcourtesyandrespecttocustomers.

Excellentcustomerserviceshouldnotbelimitedtobranchvisitsalone,but must be carried out through to all otherdeliverychannelssuchascallcentresandinternetbanking.Ninety-one percent of respondents indicated thatabank’sunderstandingoftheirneedsandbeingproactiveinpresentingalternativesisimportanttothem,whichhighlightsthefactthatbanksneed to constantly be steps ahead of thecustomerbydevelopingvariouswaysofresolvingcustomerissuesandproblemsefficientlyandeffectively.

DevelopedeconomiessuchasAustraliaandtheUnitedKingdomhaveestablishedfinancialombudsmanservicesthatindependentlysettlecomplaintsaboutindividualsandbusinessesthatprovidefinancialservicestocustomers.WearewitnessingthesametrajectoryintheAfricanbankinglandscape,withthemostsophisticatedbankingsectorinthecontinent–SouthAfrica–alreadywithafinancialombudsman.Ontheotherhand, nigeria has made progress by putting forward a bill in parliament for the establishmentofafinancialombudsmanbytheCentralBank.Althoughthemajorityoftheothercountriescoveredinthissurveyhaveactiveombudsmanbodies,theyhaveyettoestablishonethatissolelymeantforthefinancialindustries.Thishighlightsthatontheregulatory end, more needs to be done withcustomercare.

Customer care: 8 of the 14 countries choose friendliness of staff.

Top reason for –



90.6%59.1

Angola

90.8%76.4

87.6%65.3Côte d’Ivoire

Kenya

84.2%64.1Senegal

86.3%68.8Ghana

89.4%74.4 Uganda

72.9%73.2 Tanzania

84.4%63.3 Chad

85.8%65.0 Zimbabwe

81.3%69.5Sierra Leone

94.8%75.5

Botswana

74.5%89.2

Nigeria

81.9%62.8

Cameroon

Importance

CSI

Customer satisfaction index and importance rating for customer care across Africa



Customer ‘moments of truth’

Asillustratedinfigure1,estimatesoftherevenuedifference between promoters and detractors in commercial bankingareintherangeof35percentto37percent.TheestimatedrangefortheSMEandmassaffluentsegmentsis13 to15 percentand12 to14percentrespectively.

ThebankingenvironmentinSouthAfricaremainsextremelychallenging.Competitive,economicandregulatorypressureshaveallcombinedtopreventbanksfromachievingthelevelsofrevenuegrowththatwasexperiencedbefore2008.TherelationshipsofsomeestablishedbankswiththeircustomershavebeenadverselyaffectedinSouthafrica, as in most parts of the world, due to product commoditisation and ‘productpush’strategies,inconsistentchannelaccessandservicelevels,together with successful new entrants withfreshcustomervaluepropositions.

Connectingwithcustomersinnew,meaningful and consistent ways has remainedelusive.Duetothehighvolumeofcustomerchoice,somebanksarefindingitincreasinglydifficultto engage with customers at an early stage of the buying process, in order toinfluencepurchasebehaviour.Also,customers are able to compare their bank’sofferingastheybecomemuchmorefinanciallyastute,asthroughtheuseofonlinetools/comparators.

Winningbanksmustcontinuallyfocus on transforming the customer experiencetogrowthetopline.Toachievethis,theymustconnectemotionally with target customer groupsatkeyinteractions–whatwecall‘customermomentsoftruth’.

Theresultofthisimpressiondirectlyinfluencesthenatureofthecustomer’ssubsequentrelationshipwiththebank.Thisrelationshipcaninfluencethecustomer’sdecisiontomaintaintheirbankingrelationship(ortaketherelationshipelsewhere)−letalonetheirwillingnesstogrowtheirproduct/serviceportfolio.

Forexample,throughdetailedinvestigation,aleadingSouthAfricanbankfoundpricingtobeasensitivetopicfortheaffluentsegmentontwofronts.Firstly,whenshoppingforabond,aspecificmomentoftruththatirritatedcustomerswasthebank’sinabilitytotakeintoaccounttheamountofexistingbusinessindeterminingwhatfeesandinteresttochargecustomers.Thecustomers’secondmomentoftruthcamewhenthebankofferedthemthe‘bestdeal’onlyaftermultipleroundsofnegotiation.Customersconsideredbothmomentstime-consumingandinconvenient.Thisrealisationhappeneddespitethebank’spreviousunderstandingthattheaffluentsegmenttypicallyhadlimitedtimeavailable.

Globally,leadingbankshaveidentifiedadirectlinkbetweencustomermomentsoftruthandservicedelivery,netpromoterscores(NPSs)andrevenueimpact.

ThesefiguressuggestabusinesscasetousemomentsoftruthtoenhanceNPSstodeliverasustainablenetrevenueuplift.Therevenueupliftisachieved

through higher balances and longer balanceduration,newcustomerrevenuestreams,reducedcosttoserve,andreducedcustomeracquisitioncosts.

35-37%

Commercial

13-15%

SME

13-14%

Mass affluent

Figure 1: Revenue difference (%) between promotersrelative to detractors

View point

Imran Motenassociate DirectorManagementConsulting,FinancialServicesE: [email protected]



mailto:[email protected]

Simplyput,amomentoftruthis an interaction between a customerandtheirbank,thatcanleavealastingpositiveornegativeimpressiononthecustomer.

Thekeytodefiningandaddressingspecificmomentsoftruthistoclearlylinkthebank’ssalesprocesswiththecustomer’sbuyingbehaviour(figure2).

Ouranalysisallowsforcustomermomentsoftruthtobeidentifiedacrossthreebroadcategories.Thecategoriesincludepurchaseexperience,fulfilmentexperienceandsalesexperienceservice.Deeperassessmentofthese‘painpoints’willexposetheleversthat need to be addressed to enhance customerexperience.Suchleversencompassfront-linestaffempoweredtoreversedisputedcharges,ortechnologyimprovementstobetterunderstandthecustomer’sbankingportfolio/history.

A‘BigFour’Australianbank,forexample,estimatedthat12percentofbondapplicantsoverathree-monthperiod became frustrated with the timeandefforttakentoapproveandfulfilabondfacility,andwithdrewtheirapplicationinfavourofanotherfinancialinstitution.Thebankidentifiedthe underlying business issues as convolutedapplicationandfulfilmentprocesses,andanineffectiveprocessownershipmodel.Theseissuesallowed

stafftorelinquishresponsibilityforactivitiesinthebondprocesschain.Havingunderstoodtherootcauseoftheproblem,thebankoverhauleditsprocessestobecomecustomer-friendly, reducing application processing timesfromanaverageof10.3to2.1workingdays.Furthermore,thebankintroducedinitiativessuchassendingSMSprogressupdatestocustomers,toimprovethecustomerexperience.

Forbankstoachievestep-changesuccessintheircustomers’bankingexperience,theymustembarkonatransformationjourneyultimatelyleadingtoaheightenedcustomer-centricmindset across the entire business – fromcustomer-facingteamstoback-officeoperations.Thosebanksthathavebegunthisjourneywilltestifytotheneedtorapidly‘stopthebleeding’.Thiscanbeachievedbyinitiallyfocusingonhighimpact/low-investmentinitiatives,whilesimultaneouslybuildingalong-term/strategic solution to address deeper issues.Doingsoiscriticalinwinningover

the hearts and minds of staff across the organisation,andaligningstakeholderstodeliverthebusinesscase.

Insummary,achievingastep-changeinthecustomerexperienceisamatterofidentifyingandaddressingkeycustomermomentsoftruththroughhigh-impactinitiatives.Thosebanksintheleadinthisspace can consolidate their customer baseandsubstantiallyuplifttop-linegrowththroughrevenuefromagreatersourceofpromoters.

Customerbuyingbehaviour

Momentsof Truth

Bank salesprocess

Initial Contact OriginationUnderwritingand fulfilment Ongoing servicing

Customer Care

Needs Identification

Purchaseexperience

Fulfilmentexperience

After Salesexperience

Search& evaluate Select Document Set-up Drawdown Repay/fees/

interest Maintenance Terminate

Figure 2



Customerswantlessgenericproductsanddesiremorebespokeproductsthatmeettheirneeds.Anessentialdeductionfromthisisthatbanksneedtoproperlyidentifytheircustomers’needsbasedontheirbehavioursandthuscreateproductsthatareflexibleenoughtomeettheirneeds.Effectiveproductinnovationandmanagementcouldbemadepossiblewitheffectivecustomersegmentation.Withcustomersegmentation,banksdividetheircustomer base into clusters with similar characteristicsinordertoprovidevalueandsalespropositionswhichareeffectiveanduniquetoeachsegment.

Customersegmentationcouldtakeintoconsiderationgeo-demographicparameters such as age, profession, income,etc.Personalpreferencessuchas access to channel, preferred payment

Productsand services

Tailoring products to customer preferences…

Effectiveproductinnovationand management could be madepossiblewitheffectivecustomersegmentation.


Products &Services

Pricing


How flexible are the banks’ products and services? Do they add value to the customer? Do the banks communicate in clear terms what the customer stands to gain from such products and services?

method and channel preference could alsohelpincustomersegmentation.Anotherkeyinsightisidentifyingfinancialpotentialofcustomersbasedontheirtransactionswiththebankanddevelopingproductsaimedatincreasingbusinesswithsuchcustomers.Thishelps the customer feel special and createstheimpressionthatthebankisforwardthinkingandalsowantsgrowthinhis/herbusiness.

Forbanks,itisnolongersimplytherange of products offered to customers butalsoaquestionofthesuitabilityoftheproducts.Only1in10respondentssurveyedwasverysatisfiedwiththeirbank’sdeliveryofproductsandserviceshighlighting the need for better product delivery.Oftheserespondents,7in10 indicated that they do not get the requiredassistancewithunderstandingtheproductsandhowtoaccessthem.also, 2 in 10 of these respondents indicatethattheproductsarenot‘easy-to-understand’highlightingcustomers’needsforsimpleanduser-friendlyproducts.Thisshowsthat,beyondofferingtailoredproducts,banksneedtoprovidesufficientsupporttomakeproductdeliverysuccessful.

Onthecountrylevel,customersfrom9ofthe14countriessurveyedidentifiedsuitabilityofproductsandservicesasthe most important measure under this customerservicefactorcomparedtothose from angola, Botswana and

Côted’Ivoirewhoindicatedeasyaccessto credit facilities as most important to them.Ontheotherhand,customersfrom ghana were most particular with the assistance they get from their banksinunderstandingtheproductandserviceofferings.Theseresultsrevealthatbeyondcreatingagreatproduct that suits customer needs, banksalsoneedtoprovidesupportwithawareness, easy access and assistance tocustomerstoensurethattheyderivesatisfactionfromusingtheproducts.

Customer service factor: 9 of the 14 countries choose suitability of products and services.

Top reason for –



Angola

Côte d’Ivoire

Uganda

Senegal

Ghana

Tanzania

Kenya

Chad

Zimbabwe

Botswana

Sierra Leone

Nigeria

Cameroon

Importance

CSI

Customer satisfaction index and importance rating for products and services across Africa

91.4%67.3

91.3%69.8

88.3%

55.1

89.2%

50.5

85.9%59.6

79.4%

69.1

91.3%

69.2

88.1%56.6

86.7%49.6

94.4%66.1

80.6%

59.0

87.3%63.6

85.7%54.0



Innovative, customer-focused channel strategies

Overthelastfewyears,financialinstitutionshaveadoptedsegmentedcustomermodels,toimprovethecustomerexperience,attractnewclientsandincreaseloyalty.

However,inordertoachieve‘segmentedandcustomer-focused’performance,onemustdefinetherelationship model in terms of two fundamentalrequirements:

1.Anexternalvisionoftherelationshipwith customers, aligned with their preferencesandneeds;

2.Aninternalvisionforthesupportinginfrastructure,linkingtheinstitutiontothesegmentation.

Whileitisimportanttodevelopaclearexternalvision,priorityshouldbeplacedonestablishingtheinternalvision,particularly in three main areas:

1. Value proposition

Tooptimizethevalueproposition,onemustdesignproductandserviceoffersbasedonthevalueoftheclientrelationship.Forexample,whendevelopingindividualizedproductsforspecificsegments,insupportofaspecificcommercialstrategy,itiscriticaltosatisfyaclearclientneed(e.g.savings,consumption,investing)attherightpointintheclientlifecycle.

Itisalsovitaltoadequatelyrepositionthefunctionofeachchannel(e.g.transactional,relationship-building),as well as complementary customer communications, including publicity, advertising,correspondence,etc.

2. Distribution strategy

Adistributionstrategyisrequiredthatclearlyreflectsthevaluepropositionestablishedforeachsegment.Itmust also include tactics designed tomaximizerevenues,marginsandefficiency.

Inthepresentmulti-channelcontext,andwiththeadventofnewtechnologies,customershavebecomemoresophisticatedanddemanding.Thishasforcedinstitutionstoreflectontheirinteractionstrategies,andquestiontheirown business and supporting models intermsofefficiencyanddeliveringtheoptimalcustomerexperience.

Consequently,thechannelstrategymust induce the desired customer behavioursforeachsegment.Todoso,itmaybenecessarytorefineorreorganizeexistingcustomercontactfunctions, or design new channels that arecustomizedtoeachsegment.

3. Commercial dynamics

Tooptimizesalesforceperformanceinacustomer-focusedstrategy,itis necessary to plan and monitor commercialactivity,periodicallyevaluateresults,andadapttheinitialplanasrequired.Toachievecommercialefficiency,onemust:

1.Standardizethesalesprocess,withone that is centred on the customer andguidedbysegmentation;

2.Increasethetimededicatedtosales,byplanningmanagers’timeand freeing them for sales and relationship-buildingactivities;

3.Ensurequalityinplanning,executionandevaluationofthecommercialcycles;

4.Materializebusinessopportunitiesthathavebeenidentified,and

5.MonitortheKPIsanddevelopawarningsystemtomaximizeperformance.

View point

Goncalo TraquinaSeniorManagerManagementConsultingFinancialServicesE:[email protected]

Goncalo Traquina is a Senior Manager, Management Consulting in Financial Services from KPMG in Angola




Goncalo TraquinaSeniorManagerManagementConsultingFinancialServicesE:[email protected]



Technologyischangingthewayandmannerweconductourbusiness.Therehasneverbeensuchatimeinhistory,likenow,whentechnologyhastransformedthefinanceworld,especiallybanking,leavingcustomersyearningformoreinnovativeproductsandservicesfromtheirbanks.Forexample,duetosignificantinvestmentsinATMsandPOSbybanksoperatinginangola, the country witnessed a sharp riseintransactionvolumeusingtheMulticaixanetwork–from3.6millionin2006to5.5millionin2010,monthly.2 Similarly,inKenya,mobiletechnologyhelpedincreaseaccesstofinancialserviceswiththe‘invisiblebank’,M-Pesa,having40,000servicelocationsvialocalagentsacrossthecountry3 in2010comparedtoonly840bankbranches.4TheincreaseintechnologicalsolutionsavailablehasbroughtaboutincreaseinpaymentsviatheInternetandmobilechannels.RecentlyinChina,which is fast becoming the epicenter of thepaymentsindustry,thegovernmenthas granted almost 200 licenses todomesticnon-bankthirdpartypaymentserviceproviderstoeffectivelyexpandthepaymentsecosystem.Thisrepresentsnewcompetitionforbanksasthesecompanieswoulddeveloppaymentsolutionsthatcouldtakeoutasizeablechunkofthebanks’margins.Thereis,therefore,aseriousneedforbankstoinnovate,intermsofproductsandservices,toenablethemtoplayinthisdynamicandchallengingmarket.

Globally,bankinghaschangedradicallywiththeadventoftheInternetand

smartphones.Bankshavekeptpacebydeliveringvariousalternatechannels.Customersareempoweredtoservethemselvesanytime,anywhereusingthesechannelsandconvenienceisattheheartofmakingthechannelsavailabletothem.TheAutomatedTellerMachine(ATM),inparticular,hasgainedtraction by establishing itself as the fastest growing channel in africa while other channels lag behind in terms of usagebycustomers.RetailBankingResearchpredictsthenumberofATMsinAfricawillhavegrownatarateabove90 percentby2015comparedtoonly12 percentinWesternEuropeand4 percentinNorthAmerica.

ThissurveyhighlightsthedominanceofATMsandbranchesoverotherchannelsinAfrica.Notsurprisingly,branchesremain the most used channel in africa at99 percent,followedbyATMsat85 percentwhileallotherchannelslagbehindwithratesbelow30 percent.ATMisthemostfrequentlyusedchannelwith5in10customersusingitonaweeklybasiscomparedtoonly2in10customersforbranches.Every5in10customersthatuseanATMonaweeklybasisareundertheageof30andevery3in10areprivatesectoremployeeswhichsuggeststhatthefrequentATMusersareyoungprofessionals.Ontheotherhand,frequentbranchuserscomefrom the more mature population with every5in10customersthatusethebranch on a monthly basis belonging to the31-55agegroup.

2 KPMG:AngolaBankingSurvey(2011)3 Safaricom(2012)4 Economist(2012)

ChannelsConnecting with customers anytime, anywhere…

Branches remain the most used channel in Africa at 99 percent, followed by ATMs at 85 percent while all other channels lag behind with rates below 30 percent.


Products &Services

Pricing




ApartfromtheATM,adoptionofotheralternate channels in africa remains relativelylow,reflectingtheirrecentintroduction or total absence in some ofthesurveyedmarkets.Forexample,ATMsoftenlackbillpaymentsorfundstransfercapabilitieswiththeexceptionofcountrieslikeNigeriaandBotswana;inSierraLeone,Internetbankingiscurrentlylimitedtobalanceenquiry.EventhoughATMsenjoythehighestadoption for alternate channels in Africa,theystillhavetheirchallenges–customersspecificallyexpressedtheirdissatisfactionwithcashavailabilityatthemachines,frequentdowntimesandsecurityofATMlocations.However,withsuccessstoriessuch

asthestrongadoptionofATMsinNigeria(82 percent),POSinBotswana(69 percent)andmobilebankinginKenya(52 percent),itisclearthatthesealternate channels hold a lot of potential forAfricanbanks.Asmobilepenetrationand access to technology continue to grow rapidly, the opportunity to provideservicesacrossthesechannelsbecomesevengreaternecessitatingtheneedforbankstomakecustomermigration to alternate channels a strategicpriority.Manyfactorsplaya role in successful migration of customers – literacy rates, physical and online security, resistance to change andenablinginfrastructure.

Mobile payments

Call centre

Mobile banking

Internet banking

POS

ATM

Branch

Weekly Fortnightly Monthly Rarely Never

Africa-wide frequency of channel usage

3% 3%

3%

3%

4%

4% 11%

4%

5%

5%

3% 9% 86%

68%

86%

75%12%

13%

41%

18% 16% 47% 19%

16% 13% 7% 24%

91%

1% 2%

2%

1%

1%

1% 1%



MobilepenetrationinAfricatodayishigher than that of the internet and is expectedtocontinuetorisefortheforeseeablefuture.Thecosttoserveisunquestionablylowerviamobilethananyotherchannel.Africahasayoungandvibrantpopulationthattendstobethe early embracers of new products andservicesandfinancialinclusionisatopagendaforAfricanpolicymakers.Giventhatalltherightmarketvariablesexist,banksneedtoconsiderhowtheyshouldoptimizetheopportunitiesthatthemobilechannelpresents.ArecentstudyofbankingchannelsintheUSrevealsthatthecosttoservecustomersviamobilechannelischeaperthanthedominantchannelsinAfrica(branchandATM)bywidemargins.5Itis45times

moreexpensivetoservecustomersviabranch than mobile and 10 times more expensivetoservecustomersviatheATM.Giventhesefacts,banksneedtorethinktheirstrategy,surgeforwardbytakingaboldstep(notwaitingforcriticalmass)toestablishleadingpositionsinthemobilebankingandmobilepaymentsspace.Althoughhighrisks/uncertaintiesexistforservicesthatcould be offered through mobile channel (especiallywithtechnology),therewardsurpassessuchrisks.Mobilebankingisessentialforbanksthatwanttobeidentifiedasinnovatorsandcustomer-focused.Mobilepayment,ontheotherhand, is a sure way of entering untapped areastogainmarketshareandestablishnewrevenuestreams.

5 TowerGroup,Fiserve/M-comData(2009)

Mobile channelMobile channel in Africa


Products &Services

Pricing


Branch Call centre IVR ATM Online Mobile

$4.0 $1.3 $0.9 $0.2 $0.1$3.8

Source: Tower Group, Fiserve/M-Com Data (2009)

Transaction costs by service delivery channel

Kenya is a clear leader in mobile payments.



Different countries are using different models for mobile payments that are bank-ledorTelco-led.KenyaisacountrythatusestheTelco-ledmodelwhilenigeria, on the other hand, recently adoptedthebank-ledaspioneeredbythecountry’sCentralBank.Withthebetter of the two models still unclear, thebestwillbeevidentastimegoeson.Currently,Kenyaisaclearleaderinmobilepayments.AlthoughcloselytiedwithBotswana(whichhasoneofthehighest mobile penetration rates in africa at78 percent)onmobilebanking,Kenyasurpasses the rest of africa by wide marginsonmobilepayments.Thisresultbacksthecountry’ssuccessstorieswithmobilepayments,particularlyM-Pesa,thatpresentanopportunityforbankstostudyandextrapolatekeylearningsfor promoting the mobile channel in marketsinwhichtheyoperatearoundthecontinent.

About33 percentofrespondentsinkenya indicated that they use mobile

paymentsand40 percentoftheserespondents,usethisserviceonceineverytwoweeksandthemajorityoftheseusersarehigh-incomeearners,withevery3in10respondentsinthiscategoryusingthischannelseveraltimesaweek.Surprisingly,47 percentofrespondentswithinthe21-30agegrouponly use mobile payments once a month comparedto37 percentofthosewithinthe41-55agegroupthatusethisserviceonceeverytwoweeks.Othercountries,includingSierraLeoneandChad,havenot yet introduced the mobile channel intotheirbanking sectors.

MobilebankinginAfricalackspopularityforsomebasictransactions.Forexample,only4 percentofrespondentsusemobilebankingforbalanceenquiryasopposedto60 percentthatdothisserviceviathebranch.Also,only5 percentofrespondentsprefertotransferfundsviathemobilechannelasopposedto86 percentthatwanttodosoatthebranch.Perplexingly,evenKenya

that leads on the mobile channel in africa enjoysadecentrateof16 percentforbalanceenquirycomparedto50 percentthatpreferdoingsoviatheATM.WithAfrica’slargeunbankedpopulationandthesignificantpenetrationofmobilephones, mobile technology, combined with other channels, presents a huge opportunitytobanktheunbanked.

Kenya Botswana Zimbabwe Uganda Senegal Ghana Tanzania Angola Côte d’IvoireNigeria

Mobile payments and mobile banking adoption rates

0%

10%

20%

30%

40%

50%

60%

33%

25%

15%

27%

13%10%

6% 6%6%

0.5% 0.2%1%

52%50%

37%

20%

14%

6%2%

12%

mobile bankingmobile payments

Only 4 percent of respondents use mobile banking for balance enquiry as opposed to 60 percent that do this service via the branch.



Mobile payments in Kenya

a large percentage of households in developingcountrieslackaccesstofinancialservices,whichimpedeseconomicgrowthanddevelopment.Ahugeamountofevidenceshowsthataccesstofinancialservices,andindeedoverallfinancialdevelopment,iscrucialtoeconomicgrowthandpovertyreduction.Inspiteofalltheevidence,insub-SaharanAfrica,onlyafifthofhouseholdshaveaccesstofinancialservices.In2007,overtwo-thirds(70 percent)ofKenyanhouseholdsdidnothavebankaccountsorreliedoninformalsourcesoffinance.as a way to get around this hurdle, africa hasturnedtotechnology,howeverrudimentary,toovercomethechallengeofaccesstofinancialservices.

Technologicalinnovationhasnowmadeitpossibletoextendfinancialservicestomillionsofpoorpeopleatarelativelylowcost.Aclassicalexampleisthemobiletelephonemoneytransferservicesthatallowmobilephoneuserstomakefinancialtransactionsortransfersacrossthecountryconvenientlyandatlowcost.Kenya’smobilepaymentservice,knownasM-PESA,aningeniouspaymentservicetargetingmainlytheunbanked,providedbythemainmobilephonecompany,SafaricominconjunctionwithVodafone,representsagoodexampleofhowlow-costapproaches that use modern technology

caneffectivelyexpandthefinancialservicesfrontier.Theword‘pesa’istheSwahiliwordforcash,whilethe‘M’isformobile.Shortlyafteritslaunch,Safaricomhadregisteredover20,000M-PESAcustomers,waybeyonditsinitialtargets.Thespeedytake-upwasaclearsignthatM-PESAfilledagapthathadexistedinthemarket.HereisasnapshotofM-PESA’scustomergrowth:

Currently,millionsofKenyansuseM-PESAtomakepayments,sendremittances and store funds for short periods.Manyofthosewithoutbankaccountsareabletousetheservice,atlowriskandminimalcost.Evidently,Kenya’sM-PESAisprobablythemostcelebrated success story of mobile bankinginadevelopingcountry,followingAfrica’s’mobiledecade.’

ThewholeconceptbehindtheM-PESAproductisverystraightforward:acustomercanusehis/hermobilephonetomovemoneyefficiently,thatis,quickly,securely and across great distances, directlytoanothermobilephoneuser.Thecustomerdoesnotnecessarilyneedtohaveabankaccount,butregisterswithSafaricom–astheserviceproviderforanM-PESAaccount.Customersturncashintoelectronicmoney(e-money)atSafaricomdealers,andthenfollowsimple instructions on their phones to

makepaymentsthroughtheirM-PESAaccounts;thesystemprovidesmoneytransfersasbanksdointhedevelopedworld.Theaccountisverysecure,PIN-protectedandsupportedwitha24/7customer-careserviceprovidedby Safaricom.

TheM-PESAconcepthasevolvedandhasbeenadoptedbyamajorityofthebanksinKenyaasonewaythroughwhich customers can access their funds and pay bills, as well as transfer funds directlyfromtheirbankaccounts.Inthelastquarterof2012,Safaricom,incollaborationwithCommercialBankofAfrica(CBA),adoptedabankingplatform where customers can borrow funds as well as deposit funds and earn interest on their funds through the mobileplatform.Initsshortexistence,M-PESAhaswonseveralaccolades,bothlocalandinternational.KeyamongtheseincludeBestMobileTransferServiceAward–GlobalMobileAwards,africacom awards, and World Business andDevelopmentAwards.

TheM-PESAconcepthasdramaticallychangedtheKenyanfinanciallandscapeinthelastfiveyears.First,thestiffcompetition in funds transfer from M-PESAledcommercialbankstorecognizethatloweringbarrierstoentry(norequirementsofminimumbalances

View point

Jimmy MasindeSeniorManagerManagementConsultingFinancialServicesE:[email protected]

Jimmy Masinde is a Senior Manager and the Financial Services (FS) Lead in Management Consulting in Kenya.




The total number of bank accounts in Kenya has increased from 2.3 million in 2006 to well over 12 million in 2012.

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Oct-06 Feb-08 Jul-09 Nov-10 Apr-12 Aug-13

Month – Year

Cu

sto

mer

nu

mb

ers

Customer growth numbers

inopeningbankaccounts)canincreaseretailaccounts.Banksalsorealizedthatlowering costs of transacting across otherbankaccountsattractsmorecustomerstoopenaccounts.Duetothesechanges,thetotalnumberofbankaccountshasincreasedfrom2.3 millionin2006towellover12millionasofDecember2012.Thishasalsoledtothefastgrowthinagencybankinginkenya, mainly supported by the mobile platform.

M-PESAiswidelypopularamongthelowmiddle-andlow-incomepopulation.Itisprojectedtocontinueits phenomenal growth as it powers Kenya’sgrowthastheleadingeconomyinEastandCentralAfrica.Currently,itisestimatedthat25percentofKenya’sGDPflowsthroughtheserviceandthisfigureisexpectedtogrowmoving forward.



6 Customercharged:TheKPMGApproachtoCustomerExperience7 Nielson,Alterian(2011)

Banksareincreasinglyrealizingthatitiseasiertoretainthanacquirecustomers.in a bid to retain customers, some banksnowsubstantiallyinvestincustomer relationship management and complaints resolution management tools asopposedtomoreexpensivemarketingdrivestoacquirenewones.Existingcustomers promote business growth, presentcross-sellingopportunitiesandalsocostlesstoserve.Customerloyaltynow goes beyond retaining customers to makingthemadvocatesforthebank.

ArecentstudyintheUKreveals‘hugedisparitybetweenbank’sadvertisingexpenditureandsourcesofinformationthatpeopletrust’.6Only4 percentoftheUKpopulationsaysthattheytrust

advertisingasopposedtoawhopping90 percentofpeoplethattrustrecommendationsfromtheirfriends.7 a clear demonstration of this has been witnessedintheevolutionofsocialmediawhichprovidesaplatformforpeople to connect in real time, air their viewsandregistertheirdispleasureonanyissuewithavastaudience.Thisposesachallengetobanksbecauseanunsatisfiedcustomercouldcauseuntolddamagetotheimageofthebank,leadingtocustomerattrition.Lowswitchingcostsisanotherkeydriverforcustomerattritioninthebankingindustry.

Theresultsofthissurveyshowrelativelyhigh loyalty among customers on an Africa-widebasiswith6outofevery

10 respondentswillingtorepeatbusinesswiththeirbanks.Ninepercentreported that they absolutely will not repeatbusinesswiththebanksand31 percentoftherespondentssaidthey‘sometimeswill’.Theresultsforcustomeradvocacyarealsosimilartothisas60 percentsaidtheywouldrecommendtheirbanktootherswhile10 percentwillabsolutelynotdothesame.Banksshouldcontinuallystrivetomovecustomersuptheloyaltypyramid, thereby transforming them frommereclientsintoavidsupportersandpartners.Thiscouldbeachievedbyincreasingthebank’sresponsivenesstocustomer needs.

Loyalty“Merelysatisfyingcustomerswillnotbeenoughtoearntheirloyalty.Instead,theymustexperienceexceptionalserviceworthyoftheirrepeatbusinessandreferral.Understandthefactorsthatdrivethiscustomerrevolution.” — Rick Tate

30%Regular customers

10%Aggrieved customers

60%Avid customers

Loya

lty in

tens

ity

Would you recommend the bank to others?



Whencustomerswereaskedtoprovidereasonsforswitchingbanks,theycitedservicequalityastheirprimaryreason, followed by turnaround time for transaction processing and interest rates,respectively.Respondentsin12outofallthe14countriessurveyedselectedservicequalityastheirmain

reasonforchangingbankswithSenegalastheexceptionwithrespondentscitinginterestratesandfees.TheresultsrevealthatAfricanbankshavetomakequalityserviceatopstrategicfocalpointinorder to sustain and increase the current loyaltylevelstheyenjoyfromtheircustomers.

Turnaround times forrequests and enquiries

Interest rates and fees

Service quality

Innovative productsand services

Access to credit

Proximity of branchesFinancial stability

19.6% 17.2% 8.1% 6.5% 5.8%0.3%

42.6%

Customer switching: What is the primary reason for changing or planning to change your bank?



Banksneedtosolicitfeedbackfromcustomerstodiscoverserviceimprovementareas.Listeningtocustomers and responding with rigour totheirneedswillbeakeydifferentiatorforbanksinservicedeliveryexcellence.Whenaskedtorankthemostimportantareainwhichtheirbankscanimproveservicedeliverytothem,respondentsranked‘reductioninwaittimesfor

transactionprocessingandrequests’atthetop.GiventhedominanceofbranchesandATMsoverotherchannels,thisresultcomesasnosurprise.Longwaittimehasbeenapervasiveproblem in africa, especially with the largebanksthathaveahugecustomerbase.Bankinghallsareoftencrowdedwithlongqueues,andATMSarenowfollowingsuit.Diagnosingtheservice

deliverybottlenecksthatcauselongqueuesatbranchesisvitaltoensuringoptimal turnaround time for transaction processing.Alternativechannelsaregenerally seen as a solution that is both long-termandsustainable.ThiscallsforAfricanbankstoexertmoreeffortstoencourage customers to migrate and embracealternatechannels.

Tenoutofthe14countriessurveyedchose reduction in wait times as their mostdesiredserviceimprovementareawithUganda,Chad,ZambiaandCameroonemergingastheexceptions.RespondentsinUgandachosepricing

in the form of lower interest rates, feesandchargesastheirtopserviceimprovementarea.Thishasbeenatopicalissueinthecountry’sbankingindustryduetothehikeininterestrateswhileChadchosefriendly,politeand

proactivestaff.Whilenotatopreasonin any particular country, it is worthy of note that the second most important Africa-widereason–improveddeliveryofservicesthroughchannels–pullsgeneralconsensusaroundthecontinent.

Serviceexpectations“Thefirststepinexceedingyourcustomer’sexpectationsistoknowthoseexpectations.” — Roy H. Williams

20.0%

13.6%

Reduction in wait times for transactionprocessing and requests

Improved delivery of services through channels

Friendly, polite and proactive staff 15.8%

15.3%

16.8%

10.6%

7.9%

Competitiveness of interest rates, feesand charges

Fast and effective complaintsresolution

Availability of alternate channels

Seamless points of contact in the bank

Africa-wide top service improvement area



systemCrowd free branches

competitive interest ratestransaction

imageatm

eliminate queries

improve cash availability

reliable delivery channelsempower

uptimeassurance listen increased

simplicity

proactiveness

financial stabilityempathy branch network

excellent customer serviceaccuracy efficiency processing transparency

innovation

friendly polite staffcustomer centricity

reduced chargesspeed

product

access to loans

stable financial position

reputationreduced wait time

What do customers want?



Whenaskedthelevelofsatisfactiononthecostofmaintainingbankaccounts,19 percentofthosewhorespondedtothisquestionexpressedtheirdissatisfactionwhile15 percentindicatedtheirindifference.Notsurprisingly,70 percentofcustomersthatexpresseddissatisfaction with the cost of maintainingbankaccountsalsoindicatedthe same with interest rates on deposits andinvestmentsproducts.Whilebanksmay be constrained by pressures to delivershareholderresultsandmarketelements in their determination of rates offered to customers, they can help customersmakesmartchoicesintheformofadvisorysupportandimprovetheoverallcustomerexperience.Transparencyalsoemergedasacommon theme in the results in the area

ofpricing.Respondentswouldlikebankstobemoreproactiveinnotifyingthemofchange in interest rates, tariffs and terms andconditions.

Indeed,transparencyinthebankingsector has come to the forefront in recenttimes.Forexample,theindustryregulator in nigeria has established a consumerprotectiondivisiontoprovideaplatformthroughwhichbankcustomerscanseekredress.Similarly,theUgandanregulatornowpublishescommercialbankcharges to promote transparency and enhancecompetitionintheindustry.Inthesamevein,theregulatorinBotswanaundertakesawiderangeofpubliceducationactivitiesaimedatimprovingthe understanding of customers on moneyandbankingactivities.

Atthecountrylevel,respondentsfrom12outofthe14countriessurveyedsaidtheyareleastsatisfiedwiththeinterestratesondepositsandinvestments,whilerespondents from Botswana and nigeria expressedahighlevelofdissatisfactionwith the charges and fees from their banks.Basedonacross-boardanalysisofallareassurveyed,Ugandaappearstobethemostprice-sensitivecountry.CompetitiveinterestratesandchargesemergedasthetopserviceimprovementareaforUgandanrespondentswhileproduct pricing emerged as the third most important reason for maintaining bankingrelationship.Also,respondentschose interest rates and fees after servicequalityastheirsecondprimaryreasonforchangingbanks.

PricingCustomers want the best value for their money…

66.6 94.6%

Botswana

68.2 90.8%

Angola

70.0 90.6%

Uganda

52.0 89.1%

Senegal

55.0 88.3%

Côte d’Ivoire

63.6 87.3%

Nigeria

55.7 87.2%

Chad

51.7 86.8%

Zimbabwe

60.1 86.4%

Ghana

56.9 84.1%

Cameroon

59.3 81.3%

Sierra Leone

69.2 78.5%

Tanzania

Customer Satisfaction Index

70.5 91.3%

Kenya

Importance

Customer satisfaction index and importance rating for pricing across Africa


Products &Services

Pricing




ContentsCountryhighlights

angola 32Botswana 38Cameroon 42

Chad 46Côted’Ivoire 50

ghana 54kenya 58

nigeria 62Senegal 66

SierraLeone 70Tanzania 74Uganda 78Zambia 82

Zimbabwe 86© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.

WebelievethatAngola’seconomyshouldcontinuetopresenthighlyfavorablegrowthratesinthecomingyears.Thecountryhasbenefitedfromtheongoing

diversificationandtradeinvestment.Futureinvestmentswillalsobenefitthefinancialservicessectoringeneralandthebankingindustryinparticular.Thiscontinuedevolutionhascreatednewopportunitiesandbetterconditionsforthebankingsector,resultinginanincreaseinthenumberoffinancialinstitutionsoperatinginthemarket,from13banksin2005to23in2011.The sectorischaracterizedhoweverbyahighconcentration,inwhichfiveinstitutionsrepresent79 percentoftotalassets.

Regardingtheprofitabilityofthesector,thereturnonequityinaggregate terms, although high, decreased in comparison to 2010,standingat23.2 percentin2011.Followingthesametrend,the returnonassetsinaggregatetermsalsoshowedaslightdeclinecomparedto2010(2.5 percentin2011)dueinparttoadecreaseinthegrowthofbankrevenuedespitetheimprovementinthecost-to-income(49.7 percentin2011)ratio.

Overthelastfewyears,thenumberofbrancheshasincreasedwith their geographical dispersion throughout the angolan provincesincreasingsignificantly.Additionally,theavailabilityofnewelectronicchannels(e.g.ATMs,POS,mobilebanking)forthedistributionofproductsandserviceshasincreasedthecontactbetweencustomersandbankinginstitutions,offeringeasier,quickerandmorecomfortableaccesstothebank.

Forallthesereasons,theAngolanbankingpenetrationratecontinuestoevolvepositivelyhaving,accordingtotheAngolanCentralBank,evolvedfrom11 percentofthetotalpopulationattheendof2010to22 percentin2012.

AngolaSPOTLIGHT ON

32 |Countryhighlights


Major trends in the Angolan banking sector

Theevolutionofthesector,visibleattheregulatoryandsupervisorylevels,in alignment with international best practices, will continue to demand from thefinancialinstitutionsadynamicandarticulatedorganizationalmodel,guaranteeingtimelyandpracticableresponsesintermsofriskmanagement,internalcontrol,thepreventionofmoneylaunderingandthecombatagainstterrorismfinancing.Ontheotherhand,theinstitutionswilllikelycontinuetofocusontheinnovationandonthecustomerservicequality,aswellasthedevelopmentofbusinessopportunitiesresultingfromthenewlegislationrecentlypublished.

Inthiscontext,andgiventhecontinuingevolutionofthesector,therearesomechallengesthatKPMGAngolahasbeensharingitsunderstandingofwiththeAngolanfinancialservicessector,amongstwhichthefollowingstandout:

• StrengtheningoftheCorporateGovernanceandOperationalRiskManagementmodels;

• Improvementoftheoperationalefficiencythroughtheoptimizationofthedistributionchannelsandthereinforcementoftheefficiencyoftheback-andmiddle-offices;

• Reinforcementofthecreditriskmanagementthroughtheimplementationofcustomerriskmanagementproceduresingeneral,andcreditportfolioriskinparticular,proportionaltothecomplexityoftheissueandtotheforeseeableevolutionofthemarket;

• Implementationofacultureofinnovationandcustomerorientationthroughsegmentedstrategiesonproductsandservices,distributionchannelsandsupportinginfrastructure.

Customer orientation in the Angolan banks

ThechallengeofmarketsharelossbythelargestfinancialinstitutionsinAngola,asaresultofincreasedinternalcompetition,requirescontinuedinvestmentinthecustomersupportandservicesarea,thussecuringthecustomers’satisfactionandtherebyincreasingloyaltylevels.

Theseinstitutionshavebeengraduallyimplementingamorecustomer-orientedbankingapproachliketheonesfoundincountrieswithgreaterbankingmaturity,whereaneffortismadetosegmentcustomersallowinganindividualizedandpersonalizedmanagementpracticewhichtakesintoconsiderationtheirrequirements,preferencesandbehaviours.Therefore,inordertoimproveloyaltylevels,bankshavemadeasignificantefforttoimprovecustomerservice/experience,todelivercustomizedproductsandservicesforeachsegment,toadaptprocessesandsystemsforamoreeffectivecustomerexperience,toallowgreateraccesstotheinteractionchannels,andtoprovidemoretransparentandcompetitivepricingmodels.

AccordingtotheanalysisoftheCustomerSatisfactionIndex(CSI)fortheAngolanbankingsector,itcanbeconcludedthattheeffortstoimprovecustomerservicecarriedoutbythefinancialinstitutionshavegainedvisibilityandhavehadanimpactonthecustomersperceptionofthequalityoftheservicesrendered,butitisclearthatthereisstillalongwaytogoinordertoachievealevelthatsimultaneouslyoptimizestheinterestsofthefinancialinstitutionsandofthecustomers.

Banking institutions in Angola are beginning to implement a more customer-oriented banking approach like the ones found in countries with greater banking maturity.

angola | 33


BancoPrivadoAtlântico,Bancodenegócios internacional and Banco CaixaGeralTottaareperceivedtobe the institutions with the highest ’Orientationtothecustomer‘,thus presenting the highest customersatisfactionrates(Figure1–CustomerSatisfactionIndex–Top 10).

Duetothelowbankingpenetrationlevelsandmoderatefinancialsophistication of the angolan customer, there is little difference between the importance of factors that contribute to customer satisfaction.Consequently,allthe customer satisfaction factors areperceivedbythecustomersasequallyimportant.Thesurveyidentifiedsomeareasofimprovementinthe‘Customercare’,‘Processandsystems’,‘Convenience’and‘Productsandservices’areas.

Banco Privado Atlantico

Banco Caixa Geral Totta

Banco de Negocios Internacional

Banco Espirito Santo Angola

Banco Regional do Keve

Banco Angolano

Standard Bank

Banco Comercial

Banco Sol

Banco Angolano de Investimento

67.267.166.766.165.764.764.463.263.262.9

Customer Satisfaction Index – Top 10

Customer care.Themaindriverscontributing to the customer caredamageincludethedeficitinthetechnicalandbehaviouralcompetencies of the employees of the institutions, both at the commercialattendancelevel(e.g.understandingthefinancialneedsof the customer and presenting the appropriatesolutions)aswellasincustomerservice(e.g.managementandtreatmentofclaims).Inthisrespect,StandardBank,Bancodenegócios internacional and Banco PrivadoAtlânticopresentthehighestsatisfactionratesamongtheanalyzedinstitutions.

Despitetheimportantinvestmentsmadeoverthelastfewyearsinreinforcing‘Supportingprocessesandsystems’tocaterforthestronggrowth in the sector, there are stillrelevantinefficienciesareaswithsignificantimpactatthecustomersatisfactionlevel.Atthe

63.2

‘Supportingprocessesandsystems’level,respondentsevidenceddissatisfaction, in particular, with theexcessivetimetakentoexecutetransactions/orders,duetotheexistenceofoperationalinefficienciesevidencedintheback-officesoftheinstitutionsanalyzed.Inthisrespect,BancoPrivadoAtlântico,BancodeNegóciosInternacionalandBESAngolapresentthehighestlevelsofsatisfaction.

Convenience.Themaindissatisfactiondriversstated(Figure 2–Conveniencesatisfactionfactoranalysis)arethehigh waiting time of attendance at thebranches(e.g.longqueues)andthedistancetothebranchlocations.Overthelastfewyears,therehasbeen an increase in the number of branches,withasignificantincreasein the geographical dispersion of the branches.Despitetheimprovementareasidentified,BancoPrivadoAtlântico,BancoCaixaGeralTottaandBancoAngolanodeInvestimentospresentthehighestlevelsofsatisfactionamongtheanalyzedbanks.

(Numberofrespondents=440)



Convenience satisfaction factor analysis

Products and services satisfaction factor analysis

Call centre/Telephone banking – Absence of long hold/handle time

Call centre/Telephone banking –Politeness of call centre agents

Mobile banking – Balance enquiry

Branch – Absense of long queues at branches

Branch – Proximity of branches Call centre/Telephone banking – Issue resolution process

68.7% 66.9%94.8% 94.8% 67.8%94.2%

54.3% 57.9%93.9% 93.7% 70.8%93.3%

Importance Satisfaction

Easy of getting credit facilities: Loans Easy of getting credit facilities: Salary advance

Assistance with understanding the product/service and how to access...

Products and services that meet yourrequirement/needs

Funds transfer

Easy-to-understand products (e.g. account types)

Importance Satisfaction

56.9% 67.9%94.0% 92.9% 63.1%91.4%

64.2% 59.8%90.2% 89.2%

68.8%88.3% 57.1%85.4%

Easy of getting credit facilities: Overdraft

Easy of getting credit facilities: Mortage

64.9%90.8%

Easy of getting credit facilities: Other facilities

63.2%74.6%

Products and servicesTheeconomicgrowthofthecountryhasencouragedfinancialinstitutionstodevelopanddeliverproductsandservicesthatmeetthesavings,investmentandconsumptionneedsofthefamiliesandcompanies.

Accordingtotherespondents(Figure3–Productsandservicessatisfactionfactoranalysis),despitethe

evidenceofastrongevolutionoverthelastfewyearsatthefinancialproductandservicesmanagementlevel,the main challenges presented are the access to credit (e.g.consumptionandhousing)andeaseinexecutingthetransferoffunds.

angola | 35


The branch is among the most preferred channel of the Angolan customers

Themajorityoftheinstitutionsoperating in angola offer their customersseveralchannelssimilarto those offered in more mature Africanmarkets.Accordingtotherespondents(Figure4–Channelpreferencebycustomers),branchis the most widely used channel followedbyATMandlittleuseofnewer channels such as mobile or the Internet.

Despitetheevolutionintelecommunication infrastructure andthesignificantgrowthintheuse/availabilityoftheInternetinAngola,theuseofthischannelforbankingcustomersisstilllow.However,itisforeseenthat,likeinotherAfricancountries, this channel will gradually become one with the highest frequencyofuse,especiallybytheyouthsegmentofthepopulation.

With the increase in the number of Multicaixa(ATM)cards,boththe

numberofATMwithdrawalsandthenumberofPOSpaymentshaveincreased.Thisgrowthtrendhasbeennotoriousoverthelastfewyears,withPOSusagebeingevermoresignificant,reducingtheuseofcash.

AstheusageofPOSbytheretailersincreases,thecitizen’slevelofconfidencewithregardtheretoincreases, leading to a change in the profilebothofthetransactionsaswellasofthebankingcustomersthemselves.Thisbehaviourisconfirmedthroughapproximately80 percentoftherespondentsidentifyingPOSusage.

ThebranchandtheATMarethe channels most used by the customers.Thebranchcontinuestobe the channel that customers use mostfrequentlyandpreferformostfinancialservices,exceptfor‘Cashwithdrawal’and‘Balanceenquiry’forwhichMulticaixa(ATM)ispreferred.

ATM

Branch

Internet

Mobile

POS

3%

Buyingfinancialproducts

97%

Cashwithdrawal

67%

33%

2%

Billpayments

69%

18%

11%

1%

Makingcomplaints

94%5%

3%

Gettingfinancialadvice

97%

2% 1%

Balanceenquiry

65%

25%

7%

3%

Fundstransfer

84%12%

Channel preference by customers



Customer loyalty: Future challenges

Despitethelevelofcompetitioninthemarketandthestageofevolutionof the sector, there is strong evidenceforcustomerloyaltyinthesector.Themajorityofthesampleanalyzedpresentsahighlevelofloyalty,withapproximately75 percentof the respondents planning to remainwiththeirbankandwouldrecommendittoothers.

‘Financialstabilityandsolvability’and‘Imageandreputation’areidentifiedas the main reasons for maintaining therelationshipwithafinancialinstitution(Figure5–Topreasonsformaintainingbankingrelationship).However,anumberofreasonsare presented by the respondents as‘churn’drivers,namely‘Qualityofservice’and‘Timetoexecuterequests’.

Therespondentsindicatedaset of measures they consider criticalfortheimprovementofcustomerservicesintheAngolan

bankingsector.Themainareasforimprovementare‘Reductionofwaitingtime’,‘Claimresolution’andthedeficitin‘Humancapitalcompetencies’onthecommercialandback-officefunctions.

26.0%

21.0%14.0%

14.0%

11.0%

8.0%5.0%


Image and reputation

Employer requirements

Financial stability

Proximity and accessibility of branch network

Proximity of alternative delivery channels

Pricing/cost of products and services

Top reasons for maintaining banking relationship

Areas for future action to optimize customer satisfaction in Angola

Despite the continued economic growth in angola, the future sustainabilityofthefinancialinstitutionswillinevitablyrequireacustomer-orientedapproachthatoptimizesthevalueofthecustomerfortheinstitutionandviceversa.Tothisend,webelievethatgiventheevidencepresentedatthelevelofsatisfactionoftheAngolanbankingcustomer, institutions should act in three fundamental areas:

• Customer-orienteddistributionstrategy:understandthevalueleversofeachsegment(offer,channel,price)andreflectthoseontheinteractionsexperiencesmadeavailablethroughthevariouschannelsandquestiontheirownbusiness and supporting processes, soastostrengthenefficiencyandcustomerexperience.

• Efficiencyoftheoperatingmodel:implementa‘segmentedandcustomer-oriented’commercialstrategy,supportedbyaback-officemodelthatguaranteeslevelsofservicethatoptimizethecustomer’sexperienceandtheprofitabilityandefficiencyoftheinstitution.

• Strengtheningofhumancapital:implementanintegratedHumanCapitalManagementModel,capableofattracting,motivating,developingandretainingemployees,equippingthemtechnicallyandbehaviourallytocarry out their functions with themainobjectiveofprovidingexcellentcustomerservice.

angola | 37


1 EIU:BankinginSub-SaharanAfrica2020

73.373.372.271.370.468.767.567.367.2

65.7

Bank Gaborone

StanbicFirst National

Standard CharteredCapitalAfrican BankingSavingsBaroda

Building Society

Barclays

Top 10 most customer-focused banks

69.7

Botswana

Similar to other african countries, Botswana has shown notable resilience totheglobalfinancialcrisiswithallbankssurvivingthechallengesthatcamewithit.Althoughtherelativepositionofthebankingsectorwithin

Botswana’sbroaderfinancialsectorhasnotchangedmuchoverthepastdecade,bankshaveneverthelessbeengrowingrapidly,supportedbytheliberalizationmeasuresundertakenduringthe1990s.Overthedecadefrom1997to2007,thetotalassetsofthebankingsystemgrewatanaverageannualrateof21 percent,while(nominal)GDPgrewby14percentperyear(onaverage)overthesameperiod.Thesectorisexpectedtonearlydoubleoverthenextdecade,withgrowthfromeconomicexpansionaloneexpectedtoliftthesectortoaboutUS$6.7billioninnominaltermsby20201.

Afteraperiodofrapidexpansionandconsolidation,Botswana’sbankingindustryconsistsof11commercialbanksandthreestatutorybanksasof2012.Thereare96commercialbankbranchesspreadacrossthecountry,withmostconcentratedinthecapital,Gaborone.Oftheapproximatelytwomillionpeoplecountedinthe2011nationalcensus,38percentarebankable,24percentarebankedand14percentareavailableasanentirelyuntappedmarket.

Botswana’sbankingsectorsuffersfromafewchallengesincludinghighbankchargesandtheoveralllackofacreditreferencesystemthatallowsbankstoverifytheamountofcreditthatindividualsholdineachbank.Therearealsoperceptionsofalackofcompetition,poorserviceandalackofinnovation.Whilesomeoftheseconcernsarereal,othersmaybemisplaced.Indeed,therehavebeenimportantpositivedevelopmentsinthebankingsectorinrecentyears,withenhancedcompetition,innovationsinproductandservicedelivery,andgreaterchoicesforcustomers(especiallysavers)bothwithinandoutsidethecountry.

Fiveofthetop10banksrankedabovethe country’sindustryaverageCSIscoreof69.7.



Surveyhighlights– Botswana

Customer Care

>90% cite high

importance on all the customer care servicemeasures.

52%of customers werevery

satisfiedwiththestaff’sfriendlinessandpoliteness.

Convenience TransMethSyste

97% rate cash

availabilityatthe custome50

ATMasimportant. verysati

Manyrespondents the accu

expressedthe informati

need for lower denominations of

action ods & ms

Products and Services

Pricing

currencyinATMs.

% of

rs were sfiedwithracy of on.

40%were verysatisfied

with the turnaround time.

97%of custom-ers said

funds transfer was the most important product.

36%verysatisfiedwith

funds transfer service.

of those planning to change banks

saidtheywereverydissatisfiedwiththeinterest rates and fees offeredbytheirbank.

1

3

Bank Gaborone

(80.3) First National

(72.6)First National

(77.3)First National

(74.3)Savings

(76.7)

2 Savings

(79.7)Bank Gaborone

(71.0)Bank Gaborone

(75.7)Stanbic

(73.5) BancABC

(73.2)

Capital

(77.6) Barclays

(70.9) Stanbic

(75.3)Bank Gaborone

(73.1)Capital

(69.6)

Customer service factors

Rank

Customer Care

Convenience Transaction Methods & Systems


Pricing

36%

(Numberofrespondents=1,960)

Botswana | 39


Weekly channel usage in Botswana

Surveyhighlights– Botswana

Channel usage and preference

Botswana had the highest alternate channel usage of all thecountriessurveyed.Oftherespondentswhousetheirbankweekly,32percentusePOSversusonlyaround12percentthatusethebranch.Atthesametime,useoftelephonebankingisverylowwithalmost80percentofcustomers indicating that they do not use call centers for anytransaction.

Ofthepreferredchannelsforperformingvarioustransactions,69percentofcustomerssaidthattheypreferpayingbillsviaPOS,while14percentnotedapreferenceforusingthebranch.Forbalanceenquiry,37percentpreferusingtheATMand27percentpreferusingmobilebanking.although 66 percent of customers prefer transferring funds atthebranch,amodest24percentusemobilebankingwhichisoneofthehighestfiguresamongstthecountriessurveyed.

POS32% Mobilebanking26% ATM17%

Branch12% Mobile payments7% Internet

banking6%

Forcustomercare,BankGaboroneachievedthehighestrating,followedbySavingsBankandCapitalBank.However,itshouldbenotedthatthesebanksarerelativelysmallin terms of customer base and providemorepersonalizedservicescomparedtothebiggerbanks.

Onconvenience,customersplacedFirstNationalBankBotswana(FNBB)atthetop,closelyfollowedbyBankGaborone,whileBarclaysandStanbictiedinthirdplace.

It’snotsurprisingthatFNBBscoredthe highest in the categories of convenienceandtransactionmethodsandsystems.TheyarewidelyviewedasthemostinnovativebankinBotswana, with ingenuity that has been instrumental in attracting and retainingcustomersbyprovidingawidearrayofconvenientproductsandservices,andtransactionmethodsandsystems.Disappointingly,however,theircustomersfeelthatthey do not measure up when it comestopricing.FNBBreceived

aratingof65.5percentversusSavingsBank’s76.8 percentratingforpricing.Thatbeingsaid,itisworthnotingthatSavingsBanksregularlyachieveshighratingsinthis regard due to the nature of theirbusinessandoperation.Theywere established to meet particular nationalneedsandarespecializedintheir operations with the purpose of providingavenuesforsavingbythesmallsaversegmentandtoprovidefinancialservicesforallthepeopleofBotswana.



Service improvement area

InBotswana,customerswantserviceimprovementintwomainareas:waittimes for transaction processing and requests,andmorefriendly,politeandproactivestaff.


Improved deliveryof servicesthrough channels

Friendly, polite andproactive staff


Fast and effectivecomplaints resolution

Competitivenessof interest rates,fees and charges

18.6% 12.9%15.2%

Customers’ top service improvement area

18.3% 13.5% 12.8%8.7%

Availability of alternatechannels

Proximity of branches

Financial stability

25.3%

10.0%

8.0%

8.0%

5.6%

Turnaround time for requests and enquiries


Service quality

Innovative products & services

Top customer reasons for changing banks

43.0%

Customer loyalty

CustomerloyaltyandadvocacyinBotswanaissimilartotheaverageofallcountriessurveyed(about60 percent).Sixtypercentofcustomers said they would absolutely repeatbusinesswiththeirbank,while the same number said they wouldrecommendtheirbanktoothers.Customerattritionisalsolowwithonlyoneinevery10customersindicatingtheymightchangebanks,citing‘servicequality’asthetopmostreasonforthechange.

Botswana | 41


Cameroon’sfinancialindustryischaracterizedbyhighlevelsofexcessliquidityandheavyconcentrationsofloansanddepositswithinprivatecompanies

(accountingforsome65percentofalllending1).With15 bankscurrentlyactiveinthecountry,thesector’stotalassetsareexpectedtogrowataCAGRof13percent(fromaboutUS$3.5billionin2011toover$5.8 billionin20152)

Itisworthnotingthatrecentbankinginitiatives,suchasthecompulsorypaymentofcivilservants’salariesthroughbankaccounts,haveencouragedmoreCameroonianstoopenaccountswhiletherecentlaunch of a Deposit insurance Fund should also improveconfidenceinthesector.Microfinanceinstitutions are seen as a strong complement to thetraditionalbankingsectorandthegovernmentintends to strengthen them through consolidation, greatertransparencyandmonetization.Asisthecase in most african countries, some analysts believethatmobilebankingholdsthekeytobankingCameroon’sunbanked.

1 AfricaEconomicOutlook20122 EIU:BankinginSub-SaharanAfrica2020

68.064.663.862.161.2

57.7

Banque InternationaleUBAAfriland

Societe GeneraleSociete Commerciale

Ecobank


62.9

Threeofthetop6banksrankedabovethe country’sindustryaverageCSIscoreof62.9.

Cameroon



Surveyhighlights– Cameroon

Customer Care



Pricing

83% cite high importance to prompt

attentiontocustomers’enquiriesand complaints.

89%cite high importance

to accessibility of branches.

69%were satisfiedwith

proximityofbranches.

45% satisfiedwith the

overalltimelinessand turnaround time in processing transactions.

50%satisfiedwith the accuracy

and completeness of information providedbytheirbank.

60%satisfiedwith the ease

of understanding currentproducts.

65%satisfiedwith their bank’s

abilitytodeliverproducts that meet theirneeds.

Only

34%satisfiedwith the cost of

maintaining accounts withtheirbanks.

25%satisfiedwith the interest

rates offered on deposits and investmentproducts.

1

3

Afriland

(65.3)UBA

(70.2)UBA

(66.5)UBA

(65.5)UBA

(59.2)

2Société

Commerciale

(64.0)BICEC

(68.5)Afriland

(63.1)SGBCI

(65.1)Afriland

(56.8)

BICEC

(63.7)SGBCI

(67.2)

Société Commerciale

(62.8)Afriland

(64.9)Ecobank

(53.8)


Rank

Customer Care



Pricing


Only

44% satisfiedwith the promptness of attention and response to enquiriesandcomplaints.

Cameroon | 43


Weekly channel usage in Cameroon

Surveyhighlights– Cameroon


20.0%

5.7%17.1%

17.1%

17.1%22.9%

Turnaround time for requestsand enquiries


Financial stability

Service quality




Withlessthanonein10Camerooniansreportingtheuseofmobilebanking,internetbanking,POSorcallcenters,alternatechanneladoptionisclearlyverylow.Asurveyofcustomerswhoconducttransactionsweeklyrevealedthat64percenttendtousetheATM,20percentusethebranch,andfarfewerusemobilebanking(7percent),internetbanking(5percent),POS(2percent),ormobilepaymentsandcallcenters(1percenteach).

Thebranchlargelydominatesasthepreferredchannelforperformingtransactions,exceptforbalanceenquiry,wheremorepeopleusetheATM.DespitetheATMbeingthemostwidelyusedchannelinCameroon,morecustomerspreferwithdrawingcashfromthebranch(59percent)comparedwiththeATM(41percent).

Customer loyalty

CustomerloyaltyandadvocacyappearslowinCameroon.Whilea large number of respondents indicated they were willing to repeatbusinesswiththeirbankandrecommend it to others, only about 30percentexpressedthisinabsoluteterms.Elevenpercentofrespondentsindicated that they would change theirbank,citing’servicequality’asthetopreasonforchanging.

ATM64% Branch20% Mobilebanking7%

Internetbanking5% POS2% Call

centre1% MobilePayment1%





Whenaskedwhichareabanksneededtoimprovemost,Cameroonianrespondentssaidtheywantedtoseeimprovementsinwaittimes for transaction processing and requestsandmorecompetitivenessininterestratesandfees.



Improved deliveryof services through

channels


Reduction in wait timesfor transaction processing and requests


Competitiveness of interest rates,

fees and charges

21.0%17.0% 16.0%

16.0%

9.0%10.0%

10.0%

Cameroon | 45


asamemberoftheEconomicandMonetaryCommunityofCentralAfrica(CEMAC)monetaryunion,Chad’scurrencyispeggedagainsttheEuro.Thebanking

systeminChadismadeupofninebanks(mostofwhichareforeign)andischaracterizedbybothahighconcentrationofriskandanunder-capitalizationofbanks.Thesector’stotalbalancesheetwasestimatedatUS$1billionattheend of 20111.Interestingly,thecountryboastsmorethan200microfinanceinstitutionsandonly27 bankbranches, highlighting the low branch spread of commercialbankswithinthecountry.Asaresult,significantopportunitiesexistinSME,housing,ruralandmicrofinancingwithinthebankingsector.

1 AfricaEconomicOutlook2012

67.965.5

61.360.4

53.051.8

47.1

Commercial

Societe Generale Banque Sahelo

UBAOrabank

Banque Commerciale

Ecobank


58.1

Fourofthetop7banksrankedabovethe country’sindustryaverageCSIscoreof58.1.

Chad



Surveyhighlights– Chad

Customer Care



Pricing

89%consider staff attitude

as most important customer care measure.

56% of customers indicated that they were satisfiedwiththeirbank’sstaffattitude.

88% cite

high importance to accessibility of ATMs.

43%satisfiedwith ATM

availabilityuptime.

80%of customers consider

accuracy and completeness of informationprovided bybanks.


and completeness of information providedby theirbank.

44% satisfiedwith

assistancereceivedaround learning of bank’sproductsandservices.

22%satisfiedwith the access

tooverdraftfacilities.


the interest rates offered on deposits andinvestmentproducts.

39%satisfiedwith the cost of

maintainingbankaccounts.

1

3

BSSIC

(71.7)Commercial

Bank of Tchad

(67.5)

Commercial Bank of Tchad

(73.3)


(70.5) Ecobank

(65.9)

2 Ecobank

(67.6)BSSIC

(63.2)BSSIC

(68.6)BSSIC

(64.2)BSSIC

(58.3)


(65.9) SGBCI

(60.8)SGBCI

(67.3)SGBCI

(61.2)Commercial

Bank of Tchad

(54.8)


Rank

Customer Care



Pricing


Chad | 47


Weekly channel usage in Chad

Surveyhighlights– Chad

Service quality

Interest rates and fees31.8%

31.8%

22.7%

9.1%

4.5%






TheATMemergedasthemostfrequentlyusedchannelonaweeklybasis,followedbythebranch.ApartfromtheATM,alternatechanneladoptionisquitelow(fully98percentofcustomersindicatedthattheyhaveneverusedPOS,mobilebankingormobilepayments).Over90 percentofcustomerssaidtheypreferthebranchforalltheir transactions, which reinforces the fact that alternate channelshavesufferedfromfairlylowadoptionratesinChad.

Customer loyalty

CustomersinChadreportedlowcustomerloyaltyandadvocacylevels.Onlyabout15percentof respondents were absolutely willing to repeat business with their bankandrecommendittoothers.14 percentsaidthattheyareplanningtochangetheirbank,citing‘interestratesandfees’aswellas‘innovativeproductsandservices’asthetopreasonsforchange.

53% 36% 9%Branch

1% Callcentre1%POS

ATMInternetbanking




Thesurveyfindsthatthecompetitivenessofinterestrates,fees and charges is where customers wantthemostimprovement,followed by seamless points of contactandareductioninwaittimes.








17.0%15.0%

13.0%


8.0%9.0%18.0%

21.0%

Chad | 49


inthewakeofapost-electioncrisisin2010,allbanksinCôted’Ivoirereporteddeclinesinyear-over-yearresultsand–tovaryingdegrees(dependingontheircashlevels)–revenuesandmarketshare.

Nevertheless,anoverallreturntonormalcyacrossthecountryhasresultedinanimprovedoutlookforthefuture.Despitetheharmfulimpactofthecrisis,IvorianbanksheldaroundCFAF4,000billion (US$8billion)incustomerliabilitiesin2011comparedtoapproximatelyCFAF3,000 billionin20101.

AsaformerFrenchcolony,Côted’IvoireenjoysstrongparticipationfromFrenchbanks.Thereare23banksinCôted’Ivoire,includinginternationalbanks,regionalbanksandprivatebanks.Moreover,giventhatbankingservicespenetrationratesinCôted’IvoireandtheWestAfricanEconomicandMonetaryUnion(UEMOA)isonly8percent,weseesignificantopportunityintheIvorianmarket.Andwhilethemarketisstilllargelydominatedbycashtransactions, the future trend is clearly leaning towards the adoptionofelectronicservices.

notwithstanding these challenges, the country has enjoyedasignificantincreaseinthenumberofaccountsfrom879,478in2008to1,847,837in2011(anincreaseof110percent).Forthemostpart,thisperformancecanbeattributedtothepositivegrowthoutlookfor2012and,likely,for2013.

1 NationalBankingAssociation

68.366.565.665.465.465.364.864.564.063.3

BFA

BIAOUBA

SGBCIBNIBank of AfricaBanque AtlantiqueSIBBHCI

Ecobank


64.6

Côte d’Ivoire

Sevenofthetop10banksrankedabovethe country’sindustryaverageCSIscoreof64.6.



Surveyhighlights– Côte d’Ivoire

Customer Care



Pricing

56% satisfiedwith the prompt

attentiongiventoenquiriesandcomplaints.

79%satisfiedwith the staff’s

knowledgeandtheir understanding ofthebank’sproducts.

92%

importance score forcashavailabilityatATMsbycustomers.

23%very satisfiedwith

cashavailabilityatATMsdespiteits importance to customers.

90%

of respondents rankturnaroundtime for transaction processing as the most important measure,however.


turnaround time for transaction processing.

51%satisfiedwith the ease of

gettingloans.

73%satisfiedwith the bank’s

abilitytoprovidesimple products that are easy to understand.


rates offered on deposits andinvestmentproducts.


charges on maintaining accounts.

1

3

BFA

(68.8) SGBCI

(68.2)BFA

(73.3)BIAO

(66.6)BFA

(65.3)

2 UBA

(68.2) UBA

(67.6)UBA

(68.1)BFA

(66.2)UBA

(60.7)

BNI

(67.3)BFA

(67.5) Bank of Africa

(67.1)SGBCI


(59.5)


Rank

Customer Care



Pricing


Côted’Ivoire | 51


Weekly channel usage in Côte d’Ivoire

Surveyhighlights– Côte d’Ivoire

34.6%

31.3%

22.1%

4.3%3.4%2.4%1.9%



Financial stability

Service quality


Access to credit




Alternatechannelusageisalmostnon-existentinCôted’Ivoire.Indeed,around90percentofrespondentsindicatedthattheyhaveneverusedanalternatechannel(suchasPOS,Internetbanking,callcenters,mobilebankingandmobilepayments)exceptforATMs.Asaresult,aboutfiftypercentofcustomerssaytheyusethebranchonceamonth,and28percentuseiteverytwoweeks.

Highuseofbranchesandlowonlinebankingservicesmaybeexplained,inpart,bythefactthatfewhouseholdsownapersonalcomputer.However,safetyandtrustissuesstillremain.Simplyput,manyIvoiriansdon’tfeelcomfortableusingacomputerforbankingoperationsforfearofcompromisingtheirsecurityandprivacy.

Thatbeingsaid,mobilebankingisenteringtheIvorianmarketatapromisingrate.Highmobilephoneadoptionrates(particularlyamongyoungadults)inCôted’Ivoireseems to support the rise of this new distribution channel andmayeventuallychangetransactionsmethodsformanyconsumers.Already,billpaymentandmoneywiresareeasilydonethroughamobilephone.Threemajorbanks,operatingonaregionallevel,competewithinthisnewsegment.BIAOandBICICIhaveestablishedapartnershipwithOrange,oneoftheleadingmobileoperatorsontheIvorianmarket,whichhelpedlaunch‘OrangeMoney’.SociétéGénéralefollowedsuitbypartneringwithMTNtooffer‘MTNMobileMoney’.

Customer loyalty

CustomersdemonstratedvariousdegreesofloyaltyandadvocacyinCôted’Ivoire,thoughratesstillfallbelowtheoverallaverageofallcountriessurveyed(60percent).Forty-fivepercentwillabsolutelyrepeatbusinesswiththeirbank,while46percentsaidtheywouldabsolutelyrecommendtheirbanktoothers.Fifteenpercentofcustomersplantochangetheirbank,withservicequalitybeingthetopreasonforchange.

Branch43% ATM40% Mobilebanking12%

Callcenter3% 2% Internet

banking




Respondentsselected‘reductioninwaittimesfortransactionprocessing’astheirtopserviceimprovementareaforIvorianbanks.







16.5%16.3%


14.4%


5.6%8.0%17.1%

22.2%

Côted’Ivoire | 53


ghana’sbankingsectoremergedfromtheuncertaintygeneratedduringtheglobalfinancialcrisisinarelativelystrongposition.However,someuncertaintyarosefromthefactthatexternalborrowingbylocalbanks

hadbecomelowwithheavyrelianceondomesticdeposits.TheGhanaianbankingsectorhasatotalassetbaseofaboutGHC25billion(US$13billion)as of 20121.Thesectoralsoenjoysapositiveoutlookwithitsbankingassetsexpectedtogrowataround18percent(CAGR)fromapproximatelyUS$9.2 billionin2011toalmostUS$18billionby20152.

Followingthefinancialstructuraladjustmentprogram(launchedaspartoftheeconomicrecovery),competitionwithintheGhanaianbankingindustryhassurgedthroughoutthepastdecade.Theindustryhaswitnessedtheentryofnewbanks–localandforeign–whichhastranslatedintoenhancedproductdevelopmentbymostplayers.Indeed,bytheendof2012,Ghanaboasted26registeredcommercialbanksand889bankbranches.Bankingpenetrationcurrentlysitsatabout30percentoftheGhanaianpopulationofabout25million.Therelativelylowpenetration is attributable to a myriad of reasons including the multiplicityofbankchargesoncustomeraccountsandthelackofproductsthatdirectlymeettheneedsofthebulkofthepopulation.

Withrisingdemandsinbanking(duetotheemergentupstreamoilandgasindustry)andthesomewhatinadequatebalancesheetsofbanks,webelievethattheindustrywillsoonseearecapitalizationwithanincreaseintheminimumcapitalheld.Itisalsoexpectedthatgrowingcompetitionamongbankswillgraduallycreateabankingsystemthatputstheneedsofthepopulationattheheartofproductdevelopment.Superiorcustomerexperiencewillthereforebekeytodifferentiatingofferingsinthemarketplace.

1 BankofGhana:MonetaryPolicyCommitteeReport(Q2,2012)2 EIU:BankinginSub-SaharanAfrica2020

73.871.170.970.669.068.768.368.368.368.2

GTB

UT BankZenith

Bank of AfricaFidelitySG-SSB BankUBAPrudentialStandard Chartered

Cal Bank


57.8

Allofthetop10banksrankedabovethe country’sindustryaverageCSIscoreof57.8.

Ghana



Surveyhighlights– Ghana

Customer Care



Pricing

76% satisfiedwith the attitude

ofstaffatGhana’sbanks.

69% satisfiedwith the ability

ofthebank’sstafftoprovideusefulfinancialadvice.

90% attached high

importance to cash availability,securityand uptime of the ATMs.

75%said they were

satisfiedwiththeavailabilityofcashand the security of ATMs.

64% satisfiedwith

the timeliness in transaction processing.


and completeness of information (suchasbankstatements and adviceslips).

70%indicated that they were

satisfiedwiththecurrent products and servicesofferedbytheirbank.

73%found banks’products to

beeasytounderstand.

57%said they were satisfied

with the cost of maintainingbankaccounts.

30%of customers that plan

tochangebanksindicated that they wereverydissatisfiedwithbankchargesontheiraccounts.

1

3

GTBank

(77.8)GTBank

(74.1)GTBank

(78.5) GTBank

(78.5) GTBank

(68.5)

2 UT Bank

(77.3)UT Bank

(71.0)UT Bank

(76.8)Zenith

(71.4)Zenith

(64.2)

Zenith

(76.0)Zenith


(74.9)Cal Bank

(70.9)Bank of Africa

(64.0)


Rank

Customer Care



Pricing


ghana | 55


Weekly channel usage in Ghana

Surveyhighlights– Ghana

36.0%

22.9%

12.0%

16.3%

11.6%

1.2%



Financial stability

Service quality





AdoptionofalternatechannelsisquitelowinGhana,althoughhigherthansomeotherAfricancountriescoveredinthissurvey.Fifty-sixpercentofrespondentssaidthattheyusetheATMweekly,makingitthemostwidelyusedchannel.Tenpercentuseinternetbankingweeklyand8percentusePOSterminals.Eightoutof10customerssaidtheyneverusemobilebanking,while74percentadmittedthattheyneverusetheInternetforanyformoftransaction.

Notsurprisinglytherefore,85percentofcustomerssaidthat they conduct fund transfers through the branch, comparedtoonly8percentthatusetheinternetforthesamepurpose.Fifty-sixpercentofrespondentschecktheirbalancesatthebranch,38percentusetheATMandonly3percentusethemobilebankingplatform.Branchuseremainshighwithsixoutof10respondentssayingthattheywithdrawcashusingthebranch,and83percentsayingthattheyalsopaybillsatthebranch.

Customer loyalty

CustomerloyaltyandadvocacyforGhanaianbanksisbelowtheoverallaverageofallcountriessurveyed.Forty-fourpercentofrespondentsagreed that they would absolutely repeatbusinesswiththeirbank,while a similar number said they wouldrecommendtheirbanktoothers.Fifteenpercentofthecustomerssurveyedexpressedthelikelihoodofchangingtheirbank,citingservicequalityasthetopreasonforchanging.

56% 27%ATM 8%Branch

6% Callcentre

Mobile Banking 2% POS

Internetbanking

1%




Ghanaiansurveyrespondentsreported that the area where they mostwantedtoseeimprovementwas the reduction in wait times for transactionprocessingandrequests.








20.0%18.0%

15.0%

15.0%15.0%

11.0%5.0%


ghana | 57


LocalbanksinKenyaemergedrelativelyunscathedfromtheglobalfinancialcrisis,andgrewstronglyastheeconomyrebounded.Sectorpre-taxprofitsincreasedby16.9percent,fromUS$400millionin

2010toUS$462millionin2011.

Thesectorisexpectedtodoubleitsassetsinthenextdecade,largelyfromeconomicexpansiondrivenbyseveralinterrelatedforcesincludingbriskgrowthinthewidereconomy,ariseinhouseholdincomeandconsumersophistication,andthespreadofbankingtoalargeproportionofthepopulation(bankingpenetrationroseto35 percentin2012).Economicexpansionalonewillliftthesectorto aboutUS$33billion(innominalterms)by20201.

Anemergingcontributortobanks’profitsistheincreaseduseofthemobileplatformtodeliverfinancialservicesthroughpartnershipswithmobileserviceproviders.FollowingtherecentsuccessfullaunchofM-Shwari–amobilebankingproductofferedthroughastrategicco-operationbetweenVodafone,SafaricomandtheCommercialBankofAfrica(CBA)–morebankswillhavetorethinktheirmobilebankingstrategies.M-Shwariprovidesaccesstointerest-bearingsavingsaccountsaswellastheabilitytoborrow.


76.174.474.474.174.073.873.573.172.872.4

CFC Stanbic

EcobankKenya Commercial

PostEquityBarclaysFamilyNationalStandard Chartered

Cooperative


Twopan-Africanbanks(CFCStanbicandEcobank)emergedamongthetopthreebanks.CFCStanbicwasrankedasthemostcustomer-focusedbank,followedbyKenyaCommercialBankandEcobankinsecondandthirdpositions,respectively. FivebanksrankedabovetheKenyanindustry averageCSIscoreof73.9.

73.9

Kenya



Surveyhighlights– Kenya

Customer Care



Pricing

88% satisfiedwith the staff’s

knowledgeofbankproducts.

75%satisfiedwith how

quicklythebankresponded to their complaints and enquiries.

77%satisfiedwith ATM

availabilityand84%said they were satisfiedwithcashavailabilityattheATM.

83%satisfiedwith the ease

ofbalanceenquiryusing mobile payments.

85% of

respondents reported beingsatisfiedwiththe accuracy of informationprovidedbybanks.

77%satisfiedwith the overall

timeliness in processing transactions.

87%are satisfiedwith

the suitability of products and servicestotheirneeds.


assistanceprovidedon how to access andusetheirbank’sproducts.


interest rates and deposits.

71%were satisfiedwith cost of

maintaining accounts withtheirbanks.

1

3

CFC Stanbic

(79.7)Ecobank

(75.9)CFC Stanbic

(81.3)Post Bank

(75.0)National Bank

(72.1)

2 Post Bank

(77.8) CFC Stanbic

(75.7)Standard Chartered

(78.0)Family Bank

(73.7)Post Bank

(71.9)

Ecobank

(77.5)Kenya Comm.

Bank

(75.3)Barclays

(77.6)Kenya Comm.

Bank

(73.1)Equity Bank

(70.7)


Rank

Customer Care



Pricing


kenya | 59


Weekly channel usage in Kenya

Surveyhighlights– Kenya

Financial stability

36.7%

23.2%

10.6%

7.7%

17.4%

4.3%



Service quality





Apartfromcashwithdrawalandbalanceenquiry(wheretheATMhasbecomethemostpreferredchannel),Kenyanrespondents indicated a high preference for using the branch.Sowhile75percentofcustomerssaidtheyprefertheATMforcashwithdrawals,and50percentsayingtheyalsoprefertheATMforbalanceenquiry,morethaneightintensaidtheyprefertoperformfundtransfers,makecomplaintsandpaytheirbillsviathebranch.

Bankshavealsorolledout‘agencybanking’followingtheenactmentofagencyguidelinesbytheCentralBankofKenya(CBK).Agencybanking,whichisconsideredabranchchannel,sawhugeexpansionin2011,andisprojectedtoleadtoincreasedcustomerbaseandtransactions.Coupledwiththeincreasedadoptionofbancassurance(aservicethatintegratesbankingandinsurance),thesefactorsseemto foreshadow strong branch usage in the foreseeable future.

TheATMalsoappearedasthemostfrequentlyusedchannelwithover47percentofKenyanrespondentsindicatingusageonaweeklybasis.Interestingly,mobilebankingisthethirdmostfrequentlyusedchannelafterthebranch.Fortypercentofcustomersthatusemobilebankingonaweeklybasisarebetweentheagesof 31-40.However,morethan70percentofcustomersalsoadmittedthattheyhadneverusedinternetbankingorcallcentersforanytransaction.

Customer loyalty

CustomerloyaltyandadvocacyinKenyaissimilartotheaveragefromallthecountriessurveyed.Fifty-fivepercent of customers said they would absolutely repeat business with theirbank,while56percentwouldabsolutelyrecommendtheirbanktoothers.Elevenpercentofcustomerssurveyedindicatedtheymightchangetheirbankwithservicequalitybeingthetopreasonforchange.

47% 23%ATM 11%Branch

7% Callcentre

Mobile banking

6% POSInternetbanking3% 3%Mobile

payments




Kenyancustomerswantbankstoimproveserviceintwomainareas: wait times for processing transactions, and offering more competitiveinterestrates,feesandcharges.





15.9%15.0%



14.8%


8.8%9.3%18.0%


18.2%

kenya | 61


WhileNigeriamaybeAfrica’smostpopulouscountry,onlyabout20percentofthepopulationisbankedandtwo-thirdshaveneverbanked1atallbefore.

Thebankingindustryismadeupof20bankswithnearly6,000 branches, most of which are concentrated in the urbanareas(afactthatcontributestothelowlevelsofbankingpenetration).Nigeria’sbankingsectorisexpectedtogrowfromaboutUS$117billionin2011tomorethanUS$168 billionin20152(aCAGRofaround10percent).

Thesectorhasrecentlyexperiencedanumberofregulatorychangesincludingarepealofuniversalbankinglicensesand the promulgation of more stringent regulations by thecountry’sCentralBankwhichisaimingtoreducesoaringbooksofnon-performingloansandstampoutseverebreachesofcorporategovernance.However,withtheestablishmentoftheAssetManagementCompanyofNigeria(AMCON)topurchasetoxicassetsofbanksandrecapitalizetroubledbanks,some stability has returned to the sector leading ratingagencyStandard&Poor’s(S&P)toupgradethesectorin2012toapositiveoutlookduetothecountry’simprovedassetquality,capitalizationandcorporategovernance.

Nigeria

1 Efina20102 EIU:BankinginSub-SaharanAfricato2020

77.977.7

76.175.7

75.074.8

74.473.9

73.473.1

GTBank

StanbicZenith

FidelityStandard Chartered

FCMBFirst bank

SterlingAccess

Diamond


Allofthetop10banksrankedabovethe country’sindustryaverageCSIscoreof72.1.

72.1



Surveyhighlights– Nigeria

Customer Care



Pricing

85% satisfiedwith the staff’s

friendliness, politeness and willingness to assist customers.

79%satisfiedwith the prompt

attentiongivento customer complaints and enquiries.

87% were satisfied

withcashavailabilityattheATMs. Satisfactionlevelswith mobile banking,Internetbankingandcallcenterserviceswere rated comparativelylow–inthehigh50sandlow60s.


and completeness ofbankstatements,adviceslips,etc.

80% satisfiedwith the overall

timeliness and turnaround time in processing transactions.

85% were

satisfiedwithsuitabilityofbanks’productsandservicestotheirneeds.

85% were satisfied

with funds transfer services.

67%satisfiedwith the cost

of maintaining accounts with theirbank.


rates offered on deposits andinvestmentproducts.

1

3

GTBank

(80.6) Zenith

(79.0)Zenith

(79.5)GTBank

(78.3)GTBank

(71.2)

2Standard Chartered

(80.5) GTBank

(77.5) GTBank

(79.4) Zenith

(77.0)Stanbic IBTC

(67.5)

Zenith

(79.6)Diamond

(76.3) Stanbic IBTC

(79.2) Fidelity

(75.3) FCMB

(67.3)


Rank

Customer Care



Pricing


nigeria | 63


Weekly channel usage in Nigeria

Surveyhighlights– Nigeria

53.2%

12.0%

9.4%

10.8%

8.4%

5.9% 0.3%

Turnaround time for requestsand enquiries


Financial stability

Service quality


Access to credit




WithATMsbecomingalmostubiquitousinNigeriancities, it is not surprising that it has been the fastest growingchannelinrecentyears.Almosteightin10customerssurveyedusetheATMandnearlytwothirdsofthesepeoplevisitanATMonaweeklybasiswithcashwithdrawalandbalanceenquiryamongstthemostcommontransactionscustomersperformviatheATM.

However,despitetheproliferationofnewchannelsinrecentyears,ourfindingsshowthatadoptionofotheralternatechannelsisstillcomparativelylowwithveryfewrespondentssayingtheyuseinternetbanking(7percent),POS(6percent),telephonebanking(5percent)andmobilepayments(2percent).Indeed,oftherespondentsthathadusedinternetbanking,athirdwereprivatesectoremployeesand15percentwerestudents.However,whilecustomerssaytheywouldliketousesomeofthesealternate channels for transactions such as bill payments andgettingfinancialadvice,uptakeisstilllowwithmanyconsumersoblivioustothevaluepropositionthatthesechannelsprovide.

Thatbeingsaid,thesignificantandrapidadoptionoftheATMsuggeststhat–onceinternetbankingandmobilepaymentstakeroot–greatpotentialcouldberealized.

Customer loyalty

Nigeria’sbankingindustryhasexperiencedanextensiveandongoingshiftinconfidencewhich,inturn,hasimpactedloyalty.Customerawareness has increased, leading customers todemandhigherlevelsofpersonalizedservices.Interestingly,whilemostcustomersexpressedawillingnesstocontinuewiththeirbank,abouthalfofthosewhowouldliketochangetheirbanksaidtheywereremainingprimarily because of their perception of the bank’sstability.Thismeansthat,ascustomerconfidenceinthebankingindustrybeginstorise,thereislikelytobeanincreaseincustomer switching rates and the associated costsofacquiringandretainingcustomers.

Morethan70percentofNigerianrespondents indicated that they would repeatbusinesswiththeirbankandrecommendittoothersatdifferentlevelsbutonlyhalfexpressedloyaltyandadvocacyinstrongterms.

ATM65% Branch29% Internetbanking3%

Mobilebanking2% POS1%




Whenaskedhowtheirbankcouldimproveitsservices,manyNigerianrespondentsidentifiedadesiretosee a reduction in wait times for transactionprocessingandrequestsasaprimaryareaofimprovement.

Customerswouldalsoliketoseemorefriendly,politeandproactivestaffwithintheirbanks.








19.7%17.7%

15.1%

13.9%13.6%

12.1%7.8%


nigeria | 65


Senegalesebankswerebarelyaffectedbytheglobalfinancialcrisisand,asaresult,bankingsectorassetsareexpectedtogrowataCAGRof14 percentfromUS$4.6billionin2011toapproximatelyUS$7.8billion

in20151.Withthisgrowthisexpectedtocomegreaterdiffusionofincomeand,thus,increaseddemandforbothconsumerandSMEbankingservices.

Asofthetimeofwriting,theSenegalesebankingsectorhad19banksinoperation, broadly falling into two categories: historical players and new entrants.ButwhilehistoricalplayerssuchasSociétéGénérale,CBAOGroupeAttijariwafaBank,Ecobank,Banquedel’habitatandBICISrepresentaroundthreequartersofthemarket,newplayersarebeingattractedtothemarketbygoodprospectsofeconomicgrowth,politicalstability,ahousingboomandlowerpenetrationofbankingservices.

Whilesomeconsiderthatthemarketisnowsaturated,andsuggestthataconsolidationprocessisinevitableinthefuture,itmustbenotedthatthebankingpenetrationratesitsataround20percent(includingmicrofinanceinstitutions),providingmuchroomforgrowth.OtherencouragingsignsalsoexistsuchastheapprovalofanewlawrequiringpaymentofsalariesofmorethanXOF100,000(US$202)bybanktransfer.

TheoutlookfortheSenegalesebankingsectorseemsstrong,buoyedbyananticipatedincreaseinbankingpenetrationrates,betteradoptionofbankingproductsbycustomers,improvedwealthmanagementservices,andsoon.



RespondentsinSenegalrankedBanqueIslamiqueasthemostcustomer-focusedbank,withCBAOGroupeandBanqueInternationalealsoachievinghonorablementions.Sixoutofthetop10banksrankedabovetheaverageindustryCSIscoreforSenegalof60.3.

60.3

63.862.362.0

61.160.9

60.860.259.158.8

53.8

Banque Islamique

Banque InternationaleCBAO Groupe

SGBNEcobank

Banque AtlantiqueBank of Africa

Credit du SenegalCaise Nationale

UBA

Senegal



Surveyhighlights– Senegal

Customer Care



Pricing


responsegiventocustomers’enquiries/complaints.

78% satisfiedwith

staff’sattitude.

39% satisfiedwith

absenceofqueuesatbranches.

76% satisfiedwith

cashavailabilityattheATM.


of information providedbytheirbank.

54% satisfiedwith the turnaround time for transactions processing.

Only

13%verysatisfiedthat

products and servicesmettheirneeds.

10% verysatisfied

with the assistance providedinunderstanding the bank’sproducts.

26%of customers satisfied

with the interest rates offered on deposits andinvestmentproducts.

61%of customers who plan

tochangetheirbankwereverydissatisfiedwith the cost of maintaining an account withtheirbank.

1

3

Banque Islamique

(67.7)

CBAO

(63.6)Banque

Islamique

(64.7)

Banque Islamique

(66.5)

2 BICIS

(66.0)

Crédit du Sénégal

(62.1)

BICIS

(64.6)BICIS

(62.8)

Banque Islamique

(58.0)&

UBA

(58.0)

SGBN

(65.4)

Banque Islamique

(62.0)

Crédit du Sénégal

(64.5)UBA

(61.4)Ecobank

(53.4)


Rank

Customer Care



Pricing


Senegal|67


Weekly channel usage in Senegal

Surveyhighlights– Senegal

Financial stability



Service quality




35.8%

24.1%

23.5%

6.2%5.6%

5.0%


AlternatechannelusageinSenegalwasreflectiveoftheaverageresultsfromallthecountriessurveyed.Onaweeklybasis,52percentofcustomerssaidtheyusetheATM,27percentusethebranchand10percentusetheinternet.Ninein10respondentsindicatedthattheyhaveusedneithercallcentersnormobilepayments.

For channel preference in conducting transactions, 52 percentindicatedthattheyprefercashwithdrawalthroughtheATM,while89percentsaidtheyprefertousethe branch for funds transfer and 62 percent prefer to use thebranchforbalanceenquiry.

Customer loyalty

CustomerloyaltyandadvocacyinSenegalwasbelowtheaverageofallcountriessurveyedwithjust46 percentsayingthattheywouldbeabsolutely willing to repeat business withtheirbank.Fortypercentsaidthey would absolutely recommend theirbanktoothers,whileonein10 respondentsreportedtheymightchangetheirbank,withthetopreason for changing being interest ratesandfees.

ATM52% Branch27% Internetbanking10%

Mobilebanking8% POS2% Call

centre1%




RespondentsfromSenegalweresplitontheirtopneedsforserviceimprovementwithreductionsinwaittimesandmorecompetitiveinterestratesbothgarneringvotesfromaroundonefifthofcustomers.


Availability of alternatechannelsImproved delivery

of servicesthrough channels





19.1%

19.1%

17.3%

15.6%11.6%

10.4%6.9%


Senegal|69


TheSierraLeoneanbankingsectorhasevolvedquicklywithinthelastdecade,markedbyapost-warinfluxofsub-regionalfinancialinstitutions.Priortothestartofthecivilwarintheearly1990s,SierraLeonedepended

heavilyonthreemajorcommercialbanks:thestate-ownedSierraLeoneCommercialBank;BarclaysBank(whichwasreplacedbyRokelCommercialBankafteritceasedoperations);andStandardCharteredBank.However,withtheendofcivilwarcamealiberalizationofthenationaleconomycharacterizedby‘friendly’investmentpolicieswhichattractedverycrediblesub-regionalbankingandfinancialinstitutionsintothecountry’sfinancialmarket.

Thepresenceofthesebanksinthebankingindustryhasincreasedcapitalizationandcreatedstiffcompetitionformarketshare.Asaresult,bankingproductshavebecomeveryaccessibleandaffordablewhileaccesstopersonalloanproductshasincreaseddramatically.Indeed,SierraLeoneanconsumersarebeingbombardedonadailybasiswithcommercialadvertisementsencouragingthemtosaveandtotapintothevariousloanproductsonthemarket.

Thatbeingsaid,theSierraLeoneanbankingsectorcontinuestofaceanumberofchallenges.Thepaymentsystemisstillinitsinfancyandlargelyunder-developed;transactionswithinthecountryaremainlycash-basedwithlimiteduseofalternatechannels;andthecountrylacksanelectronicpaymentsystemforlarge-valuetransactions.Despitethesechallenges,thecapital-assetratioofthebanksis17percent,furtherreinforcingthepotentialforgrowthinthefinancialsector.

68.868.367.667.467.3

66.866.666.466.165.9

GIB

ZenithUBA

Union TrustSkyeRokelStandard CharteredSL CommercialAccess

First


66.2

GTBankemergedasthemostcustomer-focusedbankfollowedbyUBAandZenithBank,highlightingtherisinginfluenceoftheregionalbanksinthetop10rankings.Eightoutofthetop10banksrankedabovetheindustryaverageCSIscoreforSierraLeoneof66.2.

Sier ra Leone



Surveyhighlights– Sierra Leone

Customer Care



Pricing

80% satisfiedwith staff

friendliness and politeness.


attentiongiventotheircomplaints.

87% consider

accessibility of branchesasveryimportant.

47% satisfiedwith the absence

oflongqueuesatbranches.

82% cite high importance

to transactions turnaroundtime.



80%satisfiedthat current products

andservicesmeettheir needs with the currentproducts.

73%satisfiedwith the assistance

providedwithunderstanding the bank’sproducts.

82%rankedinterest rates

on deposits and investmentsasveryimportant.

40%of customers were

satisfiedwiththismeasure.

1

3

Standard Chartered

(74.2)GTBank

(70.6)GTBank

(70.7)

Standard Chartered

(68.6)GTBank

(61.9)

2 GTBank

(72.2)Zenith

(68.7)First

(68.4)Zenith


(61.4)

UBA

(71.2)First

(68.6)Skye

(68.3)UBA

(67.5)Zenith

(61.3)


Rank

Customer Care



Pricing


SierraLeone | 71


Weekly channel usage in Sierra Leone

Surveyhighlights– Sierra Leone

44.8%

12%

27.0%

12.0%

8.3%

4.5% 3.4%



Financial stability

Service quality





UseofalternatechannelsinSierraLeoneappearstobenon-existentascustomersindicatedthattheyneverusePOS,mobilepayments,internet,mobilebankingorcallcentersforanyoftheirtransactions.Notsurprisingly,therefore, the branch emerged as the most widely and frequentlyusedchannel,with58percentofcustomersindicatingthattheyuseitonceamonth.

ATMusagewasalsocomparativelylowatjust7percentweekly,althoughthismustlargelybeattributedtothefactthatATMswereonlyrecentlyintroducedinthecountryandareoftenunavailableduetodowntimes.

Ninein10SierraLeoneansalsoreportedabranchchannelpreference for performing transactions such as balance enquiriestobillpayments,reflectingthelowadoptionofalternatechannels.Again,availabilityimpactstheresults:inSierraLeone,billscanonlybepaidthroughbankbranchesandtheuseofPOS,mobileandcallcentershasyettobeincorporatedintothebankingsystem.

Customer loyalty

Despite the challenges faced in terms ofservicedeliveryandalternatechannel usage, customer loyalty in SierraLeoneisquitehigh.Sixty-fivepercent of customers said they would absolutely repeat business with their bank,while64percentindicatedthatthey would absolutely recommend theirbanktoothers.Tenpercentofcustomers indicated that they might changeorhaverecentlychangedtheirbank,citing‘servicequality’asthetopreasonforchange.

ATM79% Branch 18% Internetbanking1%

Mobilepayments1% POS1%




CustomersinSierraLeonearekeentoseeimprovementsinthewaytheirbanksdeliverservicesthroughchannels(notasurprisingresultconsidering the fact that almost all transactions are performed at the

branchinSierraLeone).Banksthatareabletoeffectivelyandefficientlydeploy alternate channels could achieveasignificantdifferenceincustomersatisfaction.





Reduction in wait times fortransaction processing

and requests



fees and charges

20.0% 14.0%12.0%23.0%

9.0% 5.0%


16.0%

SierraLeone | 73


75.374.6

74.574.174.1

72.972.971.871.5

68.8

Stanbic

AkibaAccess

CRDBDiamond TrustBarclaysNMBNationalPost

Exim

LikemanyotherAfricancountries,theoverallperformanceofthebankingsub-sectorinTanzaniahasbeenpositive,asthesectoreffectivelyweatheredtheglobalfinancialcrisisbyshowingstrongpositiveyear-on-yeargrowth.The

sector’sbalancesheetisexpectedtocontinueonthisupwardtrajectorywithtotalassetssettoincreaseataCAGRof18percent(fromaboutUS$6.3billionin2011tooverUS$12billionin20151).

Thereare32banksoperatinginTanzaniawithCRDBBankstandingasthecountry’slargestbank.Threebanks(CRDBBank,NationalMicrofinanceBankPlc(NMB)andNBCBankLimited)commandthemajorityofbankingbusinessinTanzaniaand,together,controlnearlyhalfofthesector’stotalassets,grossloansanddepositsaswellas41percentofthesector’stotalcapital.

NotwithstandingasinglebankcollapsethatwassupervisedbytheBankofTanzania(BOT)someyearsback,theTanzanianbankingsectorhasbeenrelativelystableandhasenjoyednormalgrowthamidstsomechallenges.Thatbeingsaid,thesectorisfacingincreasedpressurefromnewmobilebankingservices(suchasTigoandM-PESA)beingintroducedbythemajortelecomsserviceproviders.SimilartoitsEastAfricanpeers,ithasalsosufferedfromexchangeratefluctuationsforservicessuchascashdeliverywhichhasresultedininstancesofliquidityproblems.

Tanzania’sbanksmayfindmajoropportunitiesemergingfromamuch-expectedbankingsectorconsolidation,theexpansionofservicestounderservedsectionsofthemarketthroughmobilebanking(especiallythoseinruralareas),andthewiderparticipationofbanksinthedevelopmentoftheenergyandagriculturesectors.

1 EIU:BankinginSub-SaharanAfricato2020


RespondentsinTanzaniarankedStanbicasthemostcustomer-focusedbank,followedbyAccessandAkibainsecondandthirdpositions,respectively.FivebanksrankedabovetheindustryaverageCSIscoreforTanzaniaof73.

73

Tanzania



Surveyhighlights– Tanzania

Customer Care



Pricing


friendliness and politeness of the bank’sstaff.

55%satisfiedwith the time

takentorespondtotheirrequestsandenquiries.


accessibility of their bank’sbranches.


availabilityofcashatATMs.


precisionatkeepinginformation.

77% verysatisfiedwith the turnaround time in processing transactions.

78% satisfiedthat

products meet customers’needs.

88% rank

suitabilityofbanks’products and servicesasveryimportant.

17% dissatisfiedwithbank

chargessuchasCOTand other related charges.

20% dissatisfiedwith

the interest rate on deposits and investmentproducts.

1

3

Exim

(75.2)Access

(76.0)Stanbic

(80.9)Stanbic

(78.8)Akiba

(74.9)

2 Barclays

(75.0)CRDB

(75.6)Diamond Trust

(79.2)Diamond Trust

(76.3)Access

(74.8)

Akiba

(74.9)Akiba

(74.6)Exim

(77.6)Exim

(75.5)Stanbic

(72.5)


Rank

Customer Care



Pricing

Tanzania|75



Weekly channel usage in Tanzania

Surveyhighlights– Tanzania



38.6%

24.3%

12.9%

11.4%

7.1%

4.3% 1.4%


Service quality

Financial stability



Access to credit


InTanzania,branchandATMchannelsdominatewith62 percentofrespondentsindicatingthattheyuseATMsonaweeklybasisand33percentsayingtheyusethebranch.However,apartfromtheATM,Tanzaniahasoneof the lowest alternate channel usages of the countries surveyedwith9in10customersindicatingthattheyhaveneverusedotheralternatechannels(includingmobilebanking,mobilepayments,internetandPOS).

Forperformingtransactions,47percentofTanzaniancustomerssaytheychecktheirbalancesusingtheATM,whileonly7percentsaytheyprefermobilebankingforthistask.Fundstransferislargelycarriedoutinthebranch,with92percentofcustomersreportingthattheypreferitaboveotherchannels.

Customer loyalty

While a large percentage of customersexpressedvaryinglevelsofwillingnesstoeitherincreasebusinesswiththeirbankor recommend it to others, only 55 percentsaidtheywouldabsolutelydoboth.Atthesametime,twelvepercent of customers indicated that theywouldchangetheirbank,citing‘servicequality’asthetopmostreasonforchanging.

ATM62% Branch33% 3% Mobilebanking

Mobilepayments1% POS 1%




RespondentsinTanzaniawouldliketoseeimprovementsintheattitudeof staff, a reduction in wait times and morecompetitiveinterestratesfromtheirbanks.








20.1%

17.7%

15.7%

13.9%12.5%

10.5%9.6%


Tanzania | 77


82.578.678.577.977.2

74.974.5

71.471.371.3

Stanchart Bank

Housing FinanceDECU Bank

Diamond TrustBarclays BankEquity Ltd

CraneStanbicKenya Comm

Centenary

Uganda’sbankingindustryhasexperiencedanumberofchallengesoverthepastfewyears,largelycausedbythewithdrawalofdonorfunds and the increasing potential for political instability which, in

turn,wouldhaveasignificantimpactonForeignDirectInvestment(FDI).

Facingachangingregulatoryenvironmentandadepreciatinglocalcurrency(whichhitanall-timelowinSeptember2011),theBankofUgandasteppedintoplayakeyroleinstabilizingthesectorbyputtinginplacemeasurestobothmitigaterisksaswellasimproveservicedelivery.Interestingly,whiletheCentralBank’sattempttocurbinflationthroughtightermonetarypolicyledtoarisingcostofcapitalforthebusinesscommunity,manycommercialbanksstillreportedprofits.

Morethan70percentofUganda’spopulationisunbankedwiththecountry’s25banks(asof2012)offeringservicesthrough381bankbranches(asof2010).UgandahasmovedtoimplementtheCreditReferenceBureau(CRB)aswellasraisetheminimumcorecapitalforbankstoUS$4.34million.

Andwhilethecountryisstillrecoveringfromthehighinflationratesthattopped38percentlastyear,thesector’stotalassetsarenonethelessexpectedtogrowataCAGRof19percentfromUS$3.9billionin2011toalmostUS$7.9billionin20151.

1 EIU:BankinginSub-SaharanAfricato2020



73.9

Uganda



Surveyhighlights– Uganda

Customer Care



Pricing


friendliness of their bank’sstaff.

73%satisfiedwith the prompt

attentiongiventocustomerenquiriesandcomplaints.

58% very

satisfiedwithcashavailabilityatATMs.

59% satisfiedwith

absence of long queuesatbranches.


the accuracy and completeness of informationprovidedbytheirbank.

44% verysatisfiedwith the turnaround time for transaction processing.

79% satisfiedwith

products and servicesmeetingtheirneeds.

83% satisfiedwith

the ease of understanding their bank’sproducts.

53% verysatisfied

with the cost of maintaining accounts andothercharges.

44% of customers

who want to changebanksweredissatisfiedwiththebankchargesonmaintainingaccounts.

1

3

Standard Chartered

(84.5)

Standard Chartered

(83.4)Diamond Trust


(82.4)Diamond Trust

(78.5)

2 DFCU

(81.0)Housing Finance


(82.8)Housing Finance

(77.8)DFCU

(78.3)

Housing Finance

(79.1)Centenary

(78.8)Kenya Comm.

Bank

(81.1)Centenary

(77.4)Centenary

(77.4)


Rank

Customer Care



Pricing


Uganda | 79


Weekly channel usage in Uganda

Surveyhighlights– Uganda


46.0%

31.0%

8.0%

8.0%

3.0%3.0%



Financial stability

Service quality



Likemostofthecountriessurveyed,usageofalternatechannelsinUgandawaslow,inpartbecausealargeportion of the population seems to distrust the internet forbanking.NinetypercentofcustomersindicatedtheyhadneverusedPOS,internetbanking,mobilebanking,callcentersormobilepaymentsforanytransaction.Onaweeklybasis,58percentsaytheyusetheATM,while36 percentreportusingthebranch.

Apartfromcashwithdrawal(forwhich76percentofcustomerssaytheyusetheATM),thebranchappearsto be the most preferred channel for performing all other transactions,furtherreinforcingthelowrateofe-channeladoptionbyUgandancustomers.

Customer loyalty

CustomerloyaltyandadvocacyamongstUgandanrespondentssitsalittleaboveaveragewithalarge percentage of customers demonstratingvariousdegreesofloyalty:64percentofcustomerssaid they would absolutely repeat businesswiththeirbank,while66percent said they would absolutely recommendtheirbanktoothers.Tenpercentofcustomerssurveyedindicated they want to change their bank.

ATM58% Branch36%Callcentre

2%Mobilepayments

Mobilebanking2%POS

1% 1%





Ugandancustomerswouldliketoseebanksimproveonthecompetitivenessoftheirinterestrates,feesandcharges.Thisresultisnot surprising as the interest rate was also the element of pricing they were leastsatisfiedwith.








22.8%

17.2%

14.5%

14.2%13.8%

9.6%7.8%


Uganda | 81


Upuntiltheearly1990s,Zambia’sgovernmentmaintainedextensiveownershipandadministrativecontrolsovermostmarkets,includingfinancialandbankingmarkets.However,followingamajorprogram

ofmarket-orientedeconomicandfinancialsectorreforms,Zambiaevolvedtowardsamarket-ledbankingsectorunderthestrictsupervisionofthecentralbank,theBankofZambia.Andwhileliberalizationinitiallyledtotheproliferationoffinancialinstitutionsinthefinancialsector,competitioneventuallybroughtaboutanumberofbankfailures,resultingintheclosureofninecommercialbankssince1995.

WhileZambiapresentlyhas18registeredcommercialbanks,themajorityoperatemainlyinthecommercialdistricts,whicheffectivelylimitsaccesstotheformallyemployed.Asaresult,financialsectorpenetrationisstillverylowwithonlyabout15percentofadultshavingabankaccount1.

Ingeneral,Zambianbankstendtoquicklymatchtheircompetitors’innovationsandservicesmakingitincreasinglydifficulttosustainproduct,costanddistributionadvantages.Withthisinmind,mostbankshaverealizedtheimportanceofconcentratingonservicequalityasawaytoincreasecustomersatisfactionandloyalty.

1 TowardsastrategyformicroinsurancedevelopmentinZambia-AMarket andRegulatoryAnalysis:2009

Zambia



Surveyhighlights– Zambia

Customer Care



Pricing

84% satisfiedwith

staff’sfriendliness,politeness and willingness to assist customers.

63%satisfiedwith the quick

response to complaints and enquiries.

67% satisfiedwith

theproximityofbranches.

65% satisfiedwith

cashavailabilityatATMs.



68% satisfiedwith the accuracy

and completeness oftheirbank’sinformation.

79%satisfiedwith how products

andservicesmeettheirneeds.

73% satisfiedwith

funds transfer services.

74% satisfiedwithCOT

and other related charges.


interest rates offered on deposits and investmentproducts.


Notsurprisingly,themostimportantimprovementareaforZambiancustomersisthereductioninwaittimesfortransactionprocessingandrequests.

Customer loyalty

Despite the challenges faced by customers with long queuesatbranchesandextendedturnaroundtimesintransaction processing, a large percentage of customers stillexpressedawillingnesstorepeatbusinesswiththeirbankandrecommendittoothersatvariousdegrees.However,onlyabouthalfofrespondentsexpressedloyaltyandadvocacyinstrongterms.


Zambia | 83


Preferred methods of conducting banking activities.

Surveyhighlights– Zambia


Despite the recent gains made in theadoptionofbankingservices,Zambiastillfallsbehindintermsoffinancialservicesaccess,especiallyinmoreremoteareas.LimitedATMinfrastructure means that most bankingservicesareaccessedatbankinghallsthroughpersonalcounterserviceswitheitherabanktellerorapersonalbanker.

ATMpenetrationisalsolow.InDecember2011,Zambiahadatotalof537ATMsacrossthecountryversusapproximately1.3millioncustomerswithbankcards,meaningeachATMfacilitywasexpectedtoserviceanaverageof2,530customers.

Regardless,Zambiancustomersreported that their most preferred

methodofmakingcashwithdrawalswasthroughtheuseofATMmachines(93percent),whilethebranchwaspreferredforbuyingfinancialproductssuchasloans(93percent),gettingfinancialadvice(80percent)andmakingcomplaints(74percent).ATMsandmobilebankingwerealsocitedaschannelsusedforbalanceenquiry.

Internet Banking Mobile Banking Call Centre/Telephone BankingBranch ATM POS

Buying financial products e.g. loans

Getting financial advice

Making complaints

Funds transfer

Bill payments

Balance enquiry

Cash withdrawals

80%74%

26%

59%

5% 6% 7%

20%

31%

45%

93%

3% 3%8%

4%8%

34%

1%7%

30%36%

93%

1% 1%6%

13%

4% 2%



Zambia | 85


67.266.166.065.264.864.863.861.260.357.2

BancABCTNFBCKingdomBarclaysNMB

Standard CharteredCBZStanbic

Metbank

Overthelast10years,Zimbabwe’sfinancialservicesindustryhasbeenseverelyaffectedbythedownturninitseconomywhichhasbeenlargelycharacterizedbyhyperinflation,lowfinancial

intermediation and shortages of cash in the local currency as well as other externalfactorsbeyonditscontrol.Thesuspensionofthelocalcurrencyandtheintroductionofamulti-currencysysteminFebruary2009helpedtorestorepricestabilityandrestartfinancialintermediation.

Moreover,theopportunitiespresentedbythemulti-currencysystemledtorenewedinterestinthebankingsectorbyboththelocalandforeigninvestors.However,theZimbabweanbankingmarketisprovingtobehardnuttocrackwithpeculiarchallengessuchaslowliquidityconditions,limitedaccesstooffshorelinesofcreditandtheprevalenceofcash-basedtransactionscreatinghighcompetitivehurdles.Itisworthnotingthat–aspartofitseconomicrecoveryanddevelopmentplan–Zimbabwewouldneedtointegratetheinformalsectorwhich,givenitssignificancetotheeconomy,shouldhelptoexpandgrowth.ThebankingsectorinZimbabweiscurrentlybeingservicedby16commercialbanks,twomerchantbanksandfourbuildingsocietieswithabankingpenetrationratethatstands at 60 percent1ofthecountry’spopulation.

1 FinScopeConsumerSurvey2012



61.5

Zimbabwe



Surveyhighlights– Zimbabwe

Customer Care



Pricing

33% verysatisfied

withstaff’sfriendliness and politeness.


the promptness ofattentiongiventoenquiriesandrequests.

29% of

customersverysatisfiedwithavailabilityofATMs.

60%

dissatisfiedwithease of transaction trackingviainternetbanking.


the timeliness and turnaround time in processing transactions.

29% verysatisfiedwith the accuracy of information provided.

28% verysatisfied

thattheirbank’sproducts and servicesmeettheirneeds.


funds transfer servicesoftheirbank.


cost of maintaining accounts.


interest rates offered on deposits and investmentproducts.

1

3

BancABC

(76.9)BancABC

(69.1)BancABC

(74.0)BancABC

(62.3)TN Bank

(62.5)

2 TN Bank

(71.3)FBC

(68.5)TN Bank

(72.2)NMB

(62.0)Kingdom Bank

(61.1)

Standard Chartered

(70.2)TN Bank

(68.0)NMB

(71.5)TN Bank

(61.5)Post Bank

(56.1)


Rank

Customer Care



Pricing


Only

Zimbabwe | 87


Weekly channel usage in Zimbabwe

Surveyhighlights– Zimbabwe

Financial stability



Service quality

Innovative products & services12.2%

6.1%8.5%

13.4%

59.8%


TheATMisthemostwidelyusedchannelonaweeklybasis(32percent)followedbythebranch(27percent).Elevenpercentuseinternetbankingweeklyand2percentusemobilebankingwhile17percentusethePOS.

InZimbabwe,thebranchclearlydominatesasthemostpreferred channel for performing transactions ranging from cashwithdrawals,balanceenquiry,fundstransferandbillpaymentswithmorethan80percentofrespondentssaying they prefer to use the branch for performing most transactions.

Customer loyalty

With only a third of customers indicating that they would absolutely repeatbusinesswiththeirbank,andjust32percentsayingtheywouldabsolutelyrecommendtheirbankto others, customer loyalty and advocacyinZimbabweisratherlow.Twenty-onepercentofcustomerssurveyedindicatedtheymightchangebanks,citing‘servicequality’asthetopfactorinfluencingtheirdecision.

ATM32% Branch27% POS17%Internetbanking

Mobilebanking11% 8% Call

centre3% MobilePayment2%





CustomersinZimbabwewantbanksto reduce wait times for transaction processingandrequestsandimprovethecompetitivenessofinterestrates,feesandcharges.



Improved delivery ofservices through channels


Reduction in wait timesfor transaction processing and requests



fees and charges

20.1%19.8%

17.4%14.2%

12.9%7.9%

7.7%


Zimbabwe | 89


34% 15%43%

Age

21-30 years 31-40 years 41-55 years

4%Above 55 years

4%Under 20 years

37%63%

Gender

Male Female

Employment status

3%Others

25%Public

26%Private

2%Retired

23%Self-employed

21%Student

Demographics

(Numberofrespondents=25,456) (Numberofrespondents=25,456)




Wewouldliketothankthefollowingpeoplefortheirinvaluablecontributiontothissurvey:

Allsurveyrespondents,KPMGPartnersandemployeesacrossAfrica.

TheKPMGProjectAfricasurveyteam,including:BodeAbifarin,RukaiyaMohammed,AdeyemiErjirinde,RichardOlatunji,WaleAbioye,DennisObigwe,GoncaloTraquina,KabeloMoyo,ZacharieBassong,Odette Aguie,PapeBocarGueye,DesmondKoomson,ChungaMafipe,JimmyMasinde,PeterArogo,PrincettaJones,MelodyGonyoraandSarahSaunders.

TheKPMGProjectAfricabankingresourcecentre:Marie-TheresaPhido,FemiAlabi,BodeAbifarinandRukaiyaMohammed.

Acknowledgements

Report contacts

West AfricaBode AbifarinSenior ManagerKPMG NigeriaT:+2347045276485E:[email protected]

East AfricaJimmy MasindeSenior ManagerKPMG East AfricaT:+254735336640E:[email protected]

South AfricaImran MotenAssociate DirectorKPMG South AfricaT:+27827181897E:[email protected]






Contact us

Bisi LamikanraPartnerKPMG NigeriaT:+2347045276005E:[email protected]

Ines FilipePartnerKPMG AngolaT:+351210110088E:[email protected]

Vitor RibeirinhoPartner KPMG AngolaT:+351210110161E: [email protected]

Gerard DevlinPartnerKPMG BotswanaT:+2673912400E:[email protected]

Rene LibongPartnerKPMG Cameroon and ChadT: +23733439679E:[email protected]

Olatounde De SouzaAssociate DirectorKPMG Côte D’IvoireT:+22520225753E:[email protected]

Mahesh PuniaPartnerKPMG East AfricaT:+254202806000E:[email protected]

Daniel S. AdoteyePartnerKPMG GhanaT:+233302766306E: [email protected]

Ndiaga SarrSenior PartnerKPMG SenegalT:+221338492727E:[email protected]

Vidal T. O. DeckerPartnerKPMG Sierra LeoneT: +232 22 22 2061E:[email protected]

Dumi TshumaPartnerKPMG ZambiaT: +260211372900E: [email protected]

Brian NjikizanaDeputy Senior PartnerKPMG ZimbabweT:+2634302600E:[email protected]

kpmg.com/socialmedia

TheviewsandopinionsexpressedhereinarethoseofthesurveyrespondentsanddonotnecessarilyrepresenttheviewsandopinionsofKPMG.

Theinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavourtoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactonsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.

©2013KPMGAdvisoryServices,aNigerianpartnership,memberfirmoftheKPMGnetworkofindependentfirmsaffiliatedwithKPMGInternationalCooperative(“KPMGInternational”),aSwissentity.KPMGInternationalprovidesnoclientservices.NomemberfirmhasanyauthoritytoobligateorbindKPMGInternationaloranyothermemberfirmvis-à-visthirdparties,nordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfirm.Allrightsreserved.

TheKPMGname,logoand“cuttingthroughcomplexity”areregisteredtrademarksortrademarksofKPMGInternational.

DesignedbyEvalueserve.

Publicationname:AfricaBankingIndustryCustomerSatisfactionSurvey

Publicationnumber:121597

Publicationdate:April2013













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