Excellent Customer Service in the Nigerian Banking Subsector Post-consolidation Era

1.1 Background

On 6 July 2004, the Governor of the Central Bank of Nigeria kick-started the consolidation of the Nigerian banking system by revealing an agenda that aimed at reforming the Nigerian banking subsector. Items on the banking subsector reform agenda in was for banks to meet the minimum recapitalisation requirement of ^25 billion and for banks to consolidate through mergers and acquisitions. On 2 January, 2006, the Central Bank of Nigeria came up with the list of 25 deposit money banks that met this recapitalisation requirement all alone or through mergers and acquisitions.

After the momentum gathered by rush for recapitalisation and consolidation in the Nigerian banking system might have died down, Nigerian banks will face enormous and challenges that will make survival increasingly essential. This could be attributed to the foreseen competition among the 25 deposit money bank.  These banks will struggle to make profit and maintain increasing trend is earnings that will make returns on capital employed robust, meet shareholders’ expectations and maximise shareholders’ wealth.

If these banks are to survive and be successful providers of financial services, they should apply practical approach to customer services. The customer should be seen as king whose needs and expectations should form the centre-piece of banks’ activities. The excellent provision of these needs will guarantee customer satisfaction, good business performance and competitive advantage for the bank concerned.

During this post-consolidation era, the sophisticated and discerning bank customer will expect a good blend of the speed and personalised attention which the so-called ‘new generation banks’ are known for one hand, and the security and caution usually associated with the ‘old generation bank’ on the other hand. Excellent customer services in a bank will put in place, machinery that ensure effective, efficient and smooth banking operations while the provision of professional banking advice in investment, cash flow planning and decisions are guaranteed. This will also cause improved internal controls which will extensively reduce bank forgeries and fraud.

This paper examines the meaning of excellent customer services in banks from a practical point of view. It will look at the relevance of Total Quality Management (TQM) in the provision of financial services in addition to those rules and commandments in customer care which are all necessary for Nigerian bank survival after consolidation.

2.1    The Concept of Customer Service

According to the American Bankers Association, customer service reflects the total approach of a staff to a customer. It is regarded as the attitude of professionalism, friendliness and helpfulness that satisfies customers and leads to a repeat business or patronage. In banking, all staff should focus on efficient and effective customer service delivery which results into customer delight. None of the good plans can successful operationally without repeat business from customers.

It therefore goes from the above that for excellent service in a bank, every member of staff should be a marketer, strategic manager and a practitioner of total quality management. Empathy is an essential tool for excellent customer service. This implies that bankers should put themselves in the position of the customer, identifying with their needs and being patient in dealing with them while endeavouring to give error-free services.

3.1    The Concept of Bank Service

Bank services could be conceptualised by visualising it in four levels which will move banking the commodity mind-set to creating unique experiences for the customer at all times. These levels are:

      i.        Core bank Service:- This provides the basic and fundamental benefits which make the service to be of interest;

    ii.        Expected bank Services:- This gives the minimum set of expectation of customer;

   iii.        Augmented bank Services:- This about offering services that are over and above the expectation of the customer; or over what the customer is accustomed to;

   iv.        Potential bank service:- This is about everything which can be done with service that will be of utility to the customer.

The concept of customer service from the perspective of banking services provides a dynamic opportunity toward enhancing customer satisfaction by orchestrating bank services to create endless value for the customer.

4.1    Practical Strategies of Customer Service Delivery

We can group the practical strategies of customer service delivery into two. These are firm-based strategies and individual-based strategies.

4.2              Firm-based Strategies

These are what a bank as a firm, a corporate entity should fashion out in order to provide excellent customer service delivery. This is made up of four strategies pertaining to:

(a)       Cost price of service: The bank can use this to attract customers where the bank management would be required to develop competitive prices that will ensure the good returns on their investment. This is made possible under the current liberalised banking environment.

(b)       Time management of service delivery: Bank customers will always appreciate quick, prompt, efficient and effective service which they will regard as excellent service. In this regard, the bank is required to provide an appropriate environment conducive for service delivery and in which the customer feels wanted. Customers need enhanced time for transacting business with banks. The current practice of extending banking hours is a good           case in point.

(C)       Provision of error-free service: The implication of this is that banks must continually provide equipment that can improve service delivery excellently while training and retraining their staff to improve their capacities of service delivery. The acquisition of modern technologies and up-to-date management techniques are essential in this respect.

(d)       Customer delight: This could caused by total satisfaction of customers arising from excellent customer service. This should be the ultimate aim of bank management in service delivery. Customer delight can be ensured by the involvement of all bank staff in operationalising the marketing concept, total quality management in banking and sound strategic bank management. Bank staff should be motivated to give their best and be continually loyal to the bank’s vision and mission.

4.3              Individual-based strategies

These have something to do with what each bank staff must do in carrying out his/her job. It involves how staff presents themselves, communicate with customers and handle difficult customers. In this regard, bank staff must be conscious of their appearances by ensuring that they are smart, cute and neat. Courteous greetings give lasting impression on customers.

Bankers should be self-confident and be able to see the need to display facts in dealing with customers while showing competence. They should not be necessarily pedantic and overbearing. Practices like frowning while a customer waits, not maintaining eye contact or speaking too low and acting too familiar with a customer should be watched and improved upon. Bankers must learn how to handle the following group of difficult customers:

·         the impatient;

·         the insulting;

·         the angry

·         the complaining;

·         the confused;

·         the frightened;

·         the knowledgeable customers who will always claim his right.

In dealing with all these groups of customers, a golden rule should be applied; and this is that ‘the customer is always right’. In addition to these, empathy from the bankers should be applied.

5.1    Specific Strategies for Customer Care in the Banking Industry

If the concept of customer care is to be elaborated upon, it is necessary to highlight the key concepts relating to:

·         banking process;

·         granting of credit facilities;

·         deposit mobilisation;

·         the environment of banking operation;

·         other bank services.

For each of the above-mentioned strategies, the following steps are vital and important so as to ensure that bankers meet customers’ satisfaction:

·         identifying customers by group, segment and organisation;

·         determining customers’ requirements and expectations;

·         determining how to meet customers’ requirements and expectations;

·         anticipating customers’ needs;

·         gaining customers’ commitment;

·       meeting customers’ needs.

6.1    The Relevance of the Concept of Total Quality Management (TQM) to Customer Service Delivery

Total Quality Management (TQM) is the integration of all functions and processes within an organisation in order to achieve continuous improvement of goods and services; with the primary goal of customer satisfaction. Breaking down the acronyms TQM:

·         Total means every person associated with the bank and every activity.

·         Quality means ‘customer’ who may be internal customer or external customer. It signifies the excellence of products and services to meet customer expectations and requirements. Quality is the conformance to the requirements of the clients and customers now and in the nearest future, at a lower cost.

·         Management means the prevention of faults, errors or mistakes; and direction towards customer satisfaction. It does not include detection and/or correction of errors.

Total Quality Management (TQM) covers the overall aspects of quality service provided to the customer. It seeks to create competitive advantage through the involvement of all internal customers (employees) in the delivery of goods and services to the expectation of all external customers (buyers of the products, goods or services). An underlying principle of TQM is that it is not a programme but a continue process, which is an unending habitual improvement that continuously shifts toward the quality standard dictated by customers. The main objective of TQM is to delight customers by creating an enduring culture of securing superior customer service and an enduring culture for managing change through continuous and rapid improvement in cost, quality services, lead time and flexibility.

If properly implemented, the rewards of TQM are positive, substantial and pervasive. TQM will enhance the morale and sense of belonging of all employees. It will also result into effectiveness in teamwork, communication, productivity, customer relations, profitability and corporate image. The specific competitive benefits of benefits of TQM in terms of market share and customer loyalty are very significant.

A basic assumption and exciting discover in TQM is that the cost of doing business is lower when quality is high. Philip Crosby in his book titled ‘Equity is Free’ said that ‘you can eventually save more money through high quality as you can charge higher price, gain market share while avoiding fixing faults, customer rejection and complaints.

7.1    The Twelve Commandments of Customer Care

According to a Kenyan Professor, Henry M. Bwisa, caring for customer means being:

                      i.        Client friendly – cultivating friendly relations with customers.

                    ii.        Utmost good faith – relating faithfully with the customer.

                   iii.        Secretive – do not divulge customer’s secret.

                   iv.        Tolerant – tolerating all customers.

                    v.        Obligatory – making services to the customer, a duty and not a favour.

                   vi.        Memorable – developing relations that deserve remembrance.

                  vii.        Equity – treating all customers (big or small) equally.

                viii.        Righteous – striving to do what is morally right.

                   ix.        Charming – always wearing a charming face.

                    x.        Adorable – striving to be loveable by the customer.

                   xi.        Rhetorical – using persuasive and impressive language.

               xii.        Empathy – striving to share the customer’s feelings.

8.1    Conclusions

Many pre-consolidation banks in Nigeria were known to have taken the path of high quality and excellent service delivery. The breath-taking advances in electronic banking which is prevalent in industrialised economies are becoming features of many banks in Nigeria in the pre-consolidation era. Excellent customer services in the post consolidation banking scene will boost confidence, which is the major ingredient in banking business. This has an effect of improving the bottom line. Nigerian banks in the current scheme of things will have no choice than to embrace excellent service delivery in its practical sense if they must meet the global challenges and make good returns on the higher level of capital employed.

Published in Ondo State Banker – Journal of the Chartered Institute of Bankers of Nigeria, Akure Branch. Vol 2 No2, January 2006 – ISSN 0794-6171