“At its core, banking is not simply about profit, but about personal relationship”….Felix George Rohatyn, retired Investment Banker with Lazard
Banking has evolved a lot in the past few years and stakeholders are alarmed at the rate of competition within the industry. Many changes have occurred in the industry world-wide and the Ghanaian terrain has had its first share of the ripple effects.
When Capitec Bank opened its doors in 2001 as South Africa’s first new retail bank in 20 years, it was unable to raise a R100 000 loan from financial institutions to buy a pool motor vehicle for its northern areas of operation.
However, due to simple but prudent ways of banking, it raised about R3 billion in surplus funds and invested with the very same institutions that saw Capitec as a non-starter within a shorter time. In having surplus funds, Capitec did not only show what poor judges the big institutions were, but also showed those banks the way they did business. Most importantly, Capitec was able to take the presumed high-risk, lower end of the income market and made it a success. So much so that people in the middle- and upper-income levels, fed up with the poor service and high costs of the Big Four, joined the Capitec wagon. Personal relationship was crucial in achieving that.
The banking industry in Ghana has metamorphosed in many ways and still undergoing diagnosis in other areas of operation. Regulatory compliance, Increase in Capital requirement, Robust Technology application, Diversified Talents, etc. have played a major role in changing the phase of the industry in Ghana.
The industry however, requires very prudent but simple ways of making service delivery better. If you want to make banking easy, you have to look at the complete relationship. When viewed in aggregate, how much are you asking people to do? E.g. get a debit card, a credit card, enroll in online banking, mobile banking, sign up for e-statements, etc.? How much time do all that take? How many different employees, forms and touchpoints are involved? A non-exhaustive checklist is required to simply do banking better.
- Processes – How hard is it to get a loan, open an account, or enroll in online banking? How many steps does it take? Are there unnecessary policies or complex procedures interfering with efficiency? How long does it take? Where are consumers frustrated by bureaucratic obstacles? What hoops do you make people jump through?
- Locations – Are your branches easy to find or are they in awkward locations, buried far from beaten paths? How accessible are your ATMs? Is it easy to get in and out of your parking lots? Once inside, do people intuitively know where to go and what to do?
- Online – How hard is it for consumers to find what they are looking for on your website? How far do they have to dig? How many clicks does it take? Is your site map counterintuitive? Is the interface confusing? Do you overwhelm visitors with links? Can people open accounts and apply for loans online? Can people ask you questions live online?
- Service Delivery – What could people do online that they can presently only do by making a trip to a branch? How many times is someone handed off before they get the information they need? If someone talks to three different people, will they get three different answers? What’s your automated phone system like?
- Products – Do you make it easy for consumers to compare products? Are your products easy to apply for and use? How much paperwork is involved? Can people easily access current account information via various channels?
- Choices – Do you offer too many? Are the differences clear? How do you make it easier for people to make the right decisions?
- Transparency – Are you upfront about how your products are structured? Are you honest, candid and straightforward? Are you clear about what the costs will be to each consumer? How complex are your disclosures? Do you bury conditions, or cloak them in confusing legalese?
- Image & Identity – What does your brand identity say about you? Does your logo, slogan, colours, etc., convey and reflect a “simple” way of doing business? Do you have multi-page brochures? Do you send new customers away with a folder full of printed materials?
The industry`s competition is becoming keener, and all players in it must work tirelessly to stay in competition. Banks in Ghana definitely want to achieve success but that can happen only with deliberate efforts by the institutions to make that possible. A great collaboration involving all stakeholders (especially the regulator, shareholders, board, management, employees) will make that happen.
“If banks cannot truly be customer intimate, they are doomed to be just dumb commodities, acting behind the scenes, like utilities” …..JP Nicols
The writer is a Banker & an Investment Analyst/Researcher. A candidate of the CGIA Institute.