2007 KPMG Nigeria Banking Industry Customer Satisfaction Survey

Banking Survey Issue 1
© 2007 KPMG Professional Services. All rights reserved
2007
Banking
Industry
Banking Survey
Recognising Nigeria's Foremost Customer-Focused Banks February 2007
Customer Satisfaction Survey

Banking Survey
Contents
Foreword 3
Methodology 4
Beyond the Hype 5
The Customer Speaks 7
Conclusion 11
The views and opinions expressed in Section 4 of this survey report are those of the survey respondents and do not necessarily
represent the views and opinions of KPMG Professional Services. Unless otherwise stated in this publication, we have not sought to
establish the reliability of the information obtained from sources outside of KPMG. We therefore cannot provide any assurances or
guarantees that the survey findings represent an accurate view of the banking industry. There may be material differences between the
findings of the survey and the actual state of the industry. No one should act upon the survey results or other information contained
in this publication without appropriate professional advice after a thorough examination of the particular situation.
KPMG accepts no liability or responsibility from the reliance of any party on the contents of this publication.
KPMG Professional Services, a partnership registered in Nigeria, is a member of KPMG International, a Swiss cooperative.
© 2007. All rights reserved. Designed & printed in Nigeria by the Marketing, Knowledge & Communications unit.

The Nigerian banking sector is undergoing a fundamental reform, especially post
the 2005 industry consolidation, which reduced the number of deposit-money
banks from 89 to 25. Confidence in the sector has clearly improved, and Nigerian
banks have attracted increased attention, as the market structure and practices
inch gradually towards international norms.
In the evolving post-consolidation industry landscape, the challenge of
maximising shareholder value has further deepened the competitive play among
banks. As banks seek ways to gain market share, improve performance and
distinguish themselves, service quality is an important differentiator.
Recognizing the nexus between customer satisfaction and shareholder value,
KPMG, in collaboration with BusinessDay, embarked on a survey of corporate
and commercial customers of Nigerian banks.
The survey canvassed the opinions of over 160 businesses on the quality of
service delivery by Nigerian banks, providing an answer to key questions: Who
are the leading customer-
focused banks in Nigeria? Which Nigerian banks are
achieving pre-eminence for product innovation, flawless delivery and customer
responsiveness? What areas of opportunity exist for banks to further delight and
enthuse the corporate and commercial customer?
Corporate and commercial customers are a major revenue generating segment
for banks in Nigeria, currently accounting for over 90% and 70%, of risk assets,
and gross earnings respectively. Therefore, their perception of service quality and
depth are a key success factor for banks.
This report presents the key findings of the survey, and identifies the key
customer service challenges that Nigerian banks must address to be successful.
We hope that this initiative will contribute to the efforts of Nigerian banks to
further enhance and improve customer experiences.
Adebisi Lamikanra
Partner and Head, Business Advisory Services
Foreword
1
“Unless you have
100% customer
satisfaction…you
must improve”
- Horst Schulze
3

Methodology
2
Figure 1 - Analysis of Responses by
Location
Company Turnover
Industry
The survey targeted the corporate and commercial customers of banks
The survey elicited the opinions of over 160 corporate and commercial banking
customers in the key commercial hubs of Lagos, Abuja and Port Harcourt.
Respondents included companies in a variety of sectors with national and
multinational ownership structures.
Survey participants were selected randomly from the 2006 edition of the Top 500
Companies in Nigeria (GoldStar Publications). A deliberate attempt was made to
ensure that the respondents included the biggest companies in each sector. For
example, the survey participants included two (2) of the major telecommunications
companies, and two (2) of largest upstream oil & gas companies in Nigeria.
The survey questionnaire was administered over a period of ten (10) weeks
between November 2006 and January 2007
.
Feedback was obtained via interviews with each organisation’s Chief Finance
Officer (CFO), Treasurer or other personnel playing a major role in the banking
relationship interface.
All the 25 Nigerian banks were rated using a standard framework to derive
the Customer Satisfaction Index (CSI)
The CSI derived is therefore a measure of the overall level of satisfaction of
each respondent organisation with the service quality of the rated bank(s).
Figure 3 - Approach to Calculating the Customer Satisfaction Index (CSI)
4

Beyond
the Hype:
3The Challenge of
Creating a Customer-
centric Organisation
“Happy customer, happy bank”
,
“We say yes to your needs”
, “In
your own interest”
, “We are a
customer-oriented service
institution”…These and many
more are commonplace slogans
by Nigerian banks.These slogans
imply that the customer is at the
very heart of their businesses, the
critical DNA required to winning
the customer and gaining valuable
wallet share. Opinion is, however,
divided on the actual level of
service delivery by Nigerian
banks. Are Nigerian banks really
living up to their intentions? Are
Nigerian customers really thrilled
by the existing service levels?
This thought piece reviews some
of the ways in which banks can
develop distinctive, practical
customer strategies, highlighting
certain key ingredients on which
an effective customer-centric
business model can be built.
“Customers are no
longer willing to be
locked in.They want great
service, fair prices, and
innovative offerings. If
they don’t get these,
they’ll go elsewhere, and
they’ll tell the world”
- Patricia Seybold, The Customer
Revolution
Building a customer-centric organisation is a fundamental undertaking that extends
beyond sloganeering and persistent advertising. It entails reorganising or realigning
the entire business model to manage by and for customer value. It involves taking a
genuine interest in the customer, and translating this into a set of sincere and
coherent efforts embraced by all employees who have an abiding orientation to
consistently delight and excite the customer with a superior offering.
A unique customer strategy requires focusing on being best at what you do
to who needs you
Clearly, trying to be everything to every customer may spread the organisation’s
resources too thin. The key is to understand your organisation’s key strengths and
deliberately focus all efforts on maximising customer value through them.
Banks are in the business of financial intermediation, which in itself is broad-based
and diversified. There is a need to understand what the customer wants within the
context of a bank’s target market. In the 1990s, a newly established bank in Nigeria
demonstrated this clarity of purpose, thereby redefining the concept of service. It
identified fast turnaround time, ambience and personal touch as being critical to
customer delight. They practically brought to our consciousness what ‘customer
service’ was about. Today, this has been replicated by all other banks, in a ‘me too’
strategy, and has become the order of the day.
Listening for the customer’s voice is just the starting point. The next more
important step is to hardwire it1
In electrical work, hardwiring means creating a dependably wired pathway for electric
current. This way, any warning system attached to the path way e.g. fire alarm, will
naturally go off once it senses smoke. In the same way, it is not enough to invest
scarce resources in acquiring and storing customer data. The more important
challenge is what to do with the information gathered: dump it in the black hole, or
ingrain it in the bank’s circulatory system, accessible to all employees for necessary
action – hardwire it? Hardwiring customer information involves consistent, orderly
tracking of customer data and committing to making the actual improvements.
5
1
Customer Centered Growth – Five Proven Strategies for Building Competitive Advantage by
Richard Whitely and Diane Hessan ©1996 (the Forum Corporation)

Enthusiastic, not just satisfied, customers make the
difference
“Loyalty today is no longer a function of rote or duty, but
rather passion.You must do things so astonishingly well
that customers become no merely loyalists, but rather
outright apostles” – Skip LeFauve, Chairman, Saturn.
In 1982, General Motors (GM) was rapidly losing market
share to the Japanese brands, which made smaller, cheaper
cars. GM responded with the manufacture of the Saturn, a
relatively small and cheap car, just like the Japanese. The
real difference was that GM devised a unique, fun way of
engaging with its target customers - a radical departure
from the then industry norm where the customer interface
with sales was rather unremarkable. Saturn simply decided
to treat its customers intelligently and as friends. In the
year of launch, Saturn achieved the highest sale per retailer
in the global automotive industry.
To underscore its passion for the customer, Saturn, as part
of its 10th
anniversary, organised a free “homecoming” for
all Saturn owners in America, inviting them to Spring Hill,
Tennessee, the village where Saturn was originally
manufactured. In a carnival-like atmosphere, forty-eight
thousand cars drove over five thousand miles to Spring Hill
for the celebration, causing unprecedented traffic jam in
the village. The atmosphere was as emotional as it was
electrifying. Strangers voluntarily alighted from their cars,
hugged and shook hands, with some shedding tears in
sheer ecstasy. “The Saturn is a fantastic car” was a
common retort. When compared to other cars however in
term of defects and repairs, the Saturn is a VERY average
product.2
Underlying Saturn’s success was the company’s unwavering
commitment to its number one core value - customer
enthusiasm. This commitment rewrote the rules of
customer interaction in the American automotive industry,
helping to transform a very average product into a market
success. Clearly, Saturn made a soul connection with its
customers, who became fanatically attracted to the brand.
A winning strategy is not exactly coming up with
something entirely new but attaining relative
superiority in defined business areas over competition
The essence of a great strategy is to concentrate superior
strength at the market’s weakest point. The idea is to focus
less on competition but look inwards in order to concentrate
own strength on specific competitive products, services,
locations or delivery channels. Relative superiority is often
achieved through a combination of secrecy and surprise. To
think in terms of relative superiority is not to hurriedly launch
an auto finance product just like other banks but to consider
what it is you do better as a bank that you can build into your
own auto finance product to give it relative superiority in the
market place. To act in terms of relative superiority can be to
simply to concentrate more efforts on the delivery of a single
task as in the case of Saturn that much effort was
concentrated on customer interaction and caused a major
change in the entire industry.
It takes more than designing a good product.The
discipline to implement is the critical differentiator
Often times, companies are able to draw up fantastic
strategies but fail at the implementation stage, or the
carefully thought out strategy fails to deliver on the
originally intended need. The essence of time cannot be
underplayed in crafting and implementing a winning
customer strategy. Unwillingness to allow the factor of
time to have its due course in the process of crafting,
articulating and implementing a practicable customer
strategy is primarily responsible for the failure of many
otherwise profound strategies/products.
Today, most banks are introducing retail products in the
market. It is common place for banks to launch several
products simultaneously. Crafting products for customers is
not a one off event but an ongoing one that transcends
implementation.
Success is achieved in strategy articulation and
implementation when it is built for and around the
customer, when future needs of customers are duly
anticipated and prepared for, when the voice of the
customer is heard and sounds even louder than when the
customer speaks. It simply occurs when customers are
dealt with intelligently.
6
2
Customer Centered Growth – Five Proven Strategies for
Building Competitive Advantage by Richard Whitely and Diane
Hessan ©1996 (the Forum Corporation)

7
4 The
Customer
Speaks
Zenith Bank was
dominant in the
rankings in each
customer service
category
Zenith Bank tops the charts
Zenith Bank Plc emerged as the most customer-
focused bank in Nigeria with an
overall CSI of 83.30. In the second position was Guaranty Trust Bank Plc, followed
by Access Bank Plc, with CSI of 82.21 and 79.78 respectively.
The survey revealed that about 45% of Nigerian banks have a CSI of 75 and above.
While this implies a generally good level of satisfaction, it represents a significant
opportunity for the forward-looking banks to further enhance the overall customer
experience.
Zenith Bank was the most dominant bank in the rankings in each of the customer
service areas. The bank achieved the 1st
position in four (4) of the five (5) categories,
with Guaranty Trust Bank Plc “GTBank” coming 1st
in one category and 2nd
in the
remaining categories.
Figure 5 - Top Ten Customer-Focused Banks in Nigeria
Figure 6 - Ranking of Banks by Customer Service Factors

© 2007 KPMG Professional Services. All rights reserved 8
The number of ratings per bank was instructive
The survey was designed such that each bank had a high chance of being rated, to
ensure a complete coverage of all the 25 banks. While this objective was indeed
achieved, we observed that the frequency factor varied significantly among the
banks.
The frequency factor appears to be broadly indicative of the relative market shares
and footprint of the banks in the corporate and commercial segments.
Each bank had a
high chance of
being rated…
however, the rating
frequency varied
significantly among
the banks
Figure 7 - Top Ten Frequently Rated Banks
Customer satisfaction for many of the sectors was below the average
The survey results revealed that customer satisfaction scores across many of the
sectors were below the overall banking industry average. (The median CSI for the
industry stood at 76.5).
The Real Estate & Construction industry expressed the most satisfaction with the
quality of service of Nigerian banks, while the ICT and Telecom sector was the
least.
Figure 8 - Customer Satisfaction Rating By Industry

9
Why do businesses choose a bank?
Pre-consolidation, most Nigerian businesses were concerned primarily about the
safety of their funds. Interestingly, the survey demonstrates clearly that even after
the industry consolidation, financial stability remains the top criterion affecting the
decision of corporates regarding the choice of banking relationships.
Other reasons for the choice of a bank expressed by the respondent companies
included regional spread, relationship with offshore parent company and the
availability of electronic banking service capabilities.
What does the customer value?
Having contracted a banking relationship, what are the keys to building customer
loyalty and retention? What drives customer value?
The Satisfaction-Importance grid plots the relationship between the level of
customer satisfaction versus the importance attached to each factor by the
customer.
The survey revealed that transaction methods and systems is a critical satisfaction
driver for banks. On a total industry basis, customers expressed high levels of
satisfaction with the accurate processing of transactions and quality of account
information provided by banks.
Stability is the most
important reason
corporates choose
a bank
Figure 10 - Satisfaction-Importance Grid
Figure 9 –Key Considerations in
Selecting a Bank
Figure 11 - Legend to the Satisfaction-Importance Grid

© 2007 KPMG Professional Services. All rights reserved 10
Customer preferences are grouped into eight categories which have been
identified as the key elements of good customer service. They include
professionalism/approachability of staff; depth of staff knowledge; convenience/
accessibility; quality of transaction processing; timeliness/ turnaround time; product
range and quality; product appropriateness to customers’ needs; and pricing.
The quality of transaction processing and convenience / accessibility are elements
of good customer service that most banks have paid particular attention to. This is
in fact true, given the level of investment that banks have made in technology in
recent times. It appears that this has translated to appreciable levels of customer
satisfaction in an area that is considered as important and should therefore be
consolidated.
Expectedly, the product range, quality and appropriateness to customers’ needs
were the least important elements to the corporate customers.
On the flip side, the elements of good customer service that are of utmost
importance to the customer but currently receive least attention from banks
include timeliness/ turnaround time and depth of staff knowledge. These elements
are perceived as critical to the customer and are potentially key differentiators i.e.
areas to build competitive advantage.
Banks have excelled
in transaction
processing and
providing customers
with convenience/
accessibility
Key differentiators
for banks going
forward will be in
pricing and faster
turnaround times

11
Customers want to see added value in service quality
As the Nigerian banking landscape continues to evolve, the place and role of the
customer becomes even more critical to the success of a bank. Keeping the
customer enthused by providing sustainable superior quality service has become
paramount in creating a competitive advantage for Nigerian banks.
From our findings, financial stability remains the predominant reason in the choice
of a bank by commercial and corporate customers in Nigeria. Next to this is service
quality. The recent industry consolidation has, to an extent, addressed the issue of
stability. We predict that, in the medium- to long-term, service quality will be a
paramount differentiator among banks.
The unfinished business
The survey reveals that banks need to address the following matters in order to
upgrade the customer experience and engender brand loyalty:
„ Deepen and upgrade the knowledge of personnel to enable them effectively
structure products and services to meet the needs of the corporate customers;
„ Transaction turnaround time and issue resolution; and
„ Competitive pricing of products/ service offerings.
The survey also shows that, while several banks have the critical mass of
customers to remain profitable, the quality of their service delivery is relatively low
compared to the leading banks. This may inhibit their ability to compete effectively
and maximise shareholder value, in the long term.
In the final analysis, attention needs to shift to those service drivers that are of the
most significant value to the customer.
The Next Level: Becoming customer-centric
This survey has highlighted the fact that banks have been able to do just enough in
focusing on the customer. However, only a few corporates have been provided
with that consistent, unique experience that maximises life-time customer value.
The key challenge for banks is being able to deploy distinctive and practicable
customer-
focused strategies enabled by customer-centric infrastructure.
Customer satisfaction is vital to banks in Nigeria and the world over. The quality of
the customer experience is fundamental in securing customer loyalty, and locking
in the customer into a long-term profitable relationship. Nigerian banks must invest
increasingly in the keys that drive that experience – from strategy to execution.
Retail banking is emerging as the next growth frontier for Nigerian banks. Given
the race to winning the retail customer, the subsequent edition of this survey will
focus on the retail segment.
Conclusion
Nigerian banks must
move from mere
rhetoric “the customer
is king” to investing
in the necessary
“infrastructure” and
imbibing the discipline
to execute flawlessly
This is a publication of the
Business Advisory Services (BAS)
Division of KPMG Professional
Services. BAS provides strategy,
business performance, project
management and human
resource advisory services.
Contacts
Seyi Bickersteth
234 1 462 0045
seyi.bickersteth@ng.kpmg.com
Bisi Lamikanra
234 1 461 3405
bisi.lamikanra@ng.kpmg.com
5
Kunle Elebute
234 1 269 5969
kunle.elebute@ng.kpmg.com
Yomi Sanni
234 1 463 0177
yomi.sanni@ng.kpmg.com
Ayo Othihiwa
234 1 269 5970
ayo.othihiwa@ng.kpmg.com
Dimeji Salaudeen
234 1 463 0297
dimeji.salaudeen@ng.kpmg.com

2007 KPMG Nigeria Banking Industry Customer Satisfaction Survey

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