The trouble with banks

LAWRENCE SERETSE
Correspondent | Friday May 17, 2013 00:00

 

Bank Gaborone and First National Bank are tied at the top of the rankings for the most customer-focused banks in Botswana, the 2013 KPMG Africa-wide Banking Industry Customer Satisfaction Survey has shown. The two banks scored 73.3%, followed by Stanbic (72.2%), Barclays (71.3%) and Standard Chartered (70.4%). While Bank Gaborone is a relatively new player in the market after coming in six years ago, the others are more established names in the industry.

The yet to be released KPMG report provides insight and results from their survey of over 25,000 retail banking customers from 14 countries across Africa including Angola, Botswana, Cameroon, Chad, C™te d'Ivoire, Ghana, Kenya, Nigeria, Senegal, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe.

Image: The score The report shows that in Botswana, the main reason people change banks is the quality of service (43%), followed by interest rates (25.3%). The least reason is proximity of banks (5%). Contrary to the Africa-wide report, Batswana do not care much about the financial stability of the bank but would rather have quality service first and cheaper rates later. The survey shows that banks in Botswana need to seriously reduce their waiting times for transactions and requests to succeed.

'This simply means that people are more eager to get their hands on the money, issues about rates, interests, payments can come later. It is just desperation!,' says KPMG financial analyst, Kabelo Moyo.The independent survey still shows that 32% of Batswana use Point of Sale (POS) or swipe more than any other African country.

Mobile banking follows this at 26%, ATM 17%, branch 12%, mobile payments 7% and Internet banking at 6%.'But then if swiping is the most dominant, why is it that we still have long ATM queues from time to time?Well, in perspective, it could mean that most Batswana withdraw all their cash from the ATMs at month-end and the few that remain use POS from time to time,' Moyo says.

The report states that Botswana has shown notable resilience to the global financial crisis with all banks surviving the challenges that came with it. Although the relative position of the banking sector within Botswana's broader financial sector has not changed much over the past decade, banks have nevertheless been growing rapidly, supported by liberalisation measures undertaken during the 1990s. The report says over the decade from 1997 to 2007, the total assets of the banking system grew at an average annual rate of 21% while (nominal) GDP grew by 14% per year (on average) over the same period. The sector is expected to nearly double over the next decade, with growth from economic expansion alone expected to lift the sector to about US$6.7 billion in nominal terms by 2021.

After a period of rapid expansion and consolidation, Botswana's banking industry consists of 11 commercial banks and three statutory banks (2012). There are 96 commercial bank branches spread across the country, with most concentrated in the capital, Gaborone. Of the approximately two million people counted in the 2011 national census, 38% are bankable, 24% are banked and 14% are available as an entirely untapped market, the report reveals.

The KPMG report suggests that Botswana's banking sector suffers from challenges like high bank charges and overall lack of a credit reference system that allows banks to verify the amount of credit that individuals hold in each bank. There are also perceptions of a lack of competition, poor service and a lack of innovation. While some of these concerns are real, others may be misplaced, the report says.

For customer care, Bank Gaborone achieved the highest rating, followed by Botswana Savings Bank and Capital Bank. However, it should be noted that these banks are relatively small in terms of customer base and provide more personalised services, compared to the bigger banks.

The report shows that customers voted First National Bank as the most convenient bank, closely followed by Bank Gaborone, while Barclays and Stanbic tied in third place. 'It's not surprising that FNBB scored the highest in the categories of convenience and transaction methods and systems. They are widely viewed as the most innovative bank in Botswana, with ingenuity that has been instrumental in attracting and retaining customers by providing a wide array of convenient products and services, and transaction methods and systems,' says the report.

However, KPMG reveals that FNBB customers feel that they do not measure up when it comes to pricing. FNBB received a rating of 65.55 versus Botswana Savings Bank's 76.8% rating for pricing. It is worth noting that Botswana Savings Bank regularly achieves high ratings in this regard due to the nature of its business and operation.

The bank was established to meet particular national needs and is specialised in its operations with the purpose of providing avenues for the small saver segment and financial services for all Batswana. The report says Botswana customers want service improvement in two main areas: waiting times for transaction processing and requests, and more friendly, polite and proactive staff.

Customer loyaltyThe KPMG report states that customer loyalty and advocacy in Botswana is similar to the average of all countries surveyed (about 60 percent). Sixty percent of customers said they would absolutely do business again with their bank, while the same number said they would recommend their bank to others. Customer attrition is also low. Only one in every 10 customers indicated that they might change banks, citing service quality as the topmost reason for the change.

Channel usage and preferenceThe KPMG report says Botswana had the highest alternate channel usage of all the countries surveyed. Of the respondents who use their bank weekly, 32% use POS and only around 12% use the branch. At the same time, use of telephone banking is very low. Almost 80% of customers indicated that they do not use call centres for any transaction.

Of the preferred channels for performing various transactions, 69% of customers said they prefer paying bills via POS while 14% had a preference for the branch. For balance enquiry, 37 percent prefer using the ATM and 27% prefer using mobile banking. Although 66% of customers prefer transferring funds at the branch, a modest 24% use mobile banking, which is one of the highest figures among the countries surveyed.