What do Nigerians look out for in banks?

BusinessDay deployed a comprehensive survey to determine the pattern of behavior, age structure, expectations and preferences of Nigeria’s banking public. The survey was conducted in the six geopolitical zones of the country. 

The pattern of responses captures the traditional distribution of Nigeria’s banking public. Twelve percent of respondents are from the South-South and south-East; Fifty-eight percent from the South-West while the combination of North-East, North-West and North-Central make up 30% of respondents.

According to the National Population Commission, 167 million people live in Nigeria, of this lot 28.6 million adults have bank accounts, according to the 2012 EFInA Access to Financial Services report (39.7% of the adult population remains unbanked).

Clearly, Nigeria has the largest population of people who use banks in sub-Saharan Africa the country may also have the highest number of potential customers and there are potentials for growth.

Our survey brought to the fore the need to strengthen the traditional pillars of banking, as a vast majority of respondents drew attention to financial stability and trust as the basis of their choice of certain banks. Major factors which turn off customers include long queues (57%), non functioning ATM machines (27%), prohibitive charges (19%), etc (please see chart 1). Recommendations from friends, and accounts opened for salary purposes dominate the choice of banks which customers patronize.

 We asked respondents the question: “If you had a billion Naira, which bank would you keep it?.” A number of banks stood out from the pack, we then drilled further by asking why they chose particular institutions, 95% of respondents said they chose the banks because of security. While only 16% said they consider the interest element.

We believe that among other things, the element of stability and financial strength affect the psyche of Nigeria’s banking public, we therefore recommend the emphasis of stability in bank advertising, albeit with proof. We also see prospect for banks which can differentiate themselves by offering competitive deposit rates, both for fixed and saving deposits; though the constraints to banks are clear.

Through the data, we discovered that there is a preponderance of savings accounts in the banking system with fixed deposits representing a far smaller portion of accounts. Ninety percent of respondents have savings accounts while 63% have current accounts. Only 10% of respondents have fixed deposits with banks.

Most respondents who have current accounts also have savings account. Our conclusion is that the probability that a Nigerian who has a current account, also has a savings account could be as high as 0.8.

Preference for savings accounts may not be unconnected with the fact that these days, more savings accounts are assuming Current Account features while Current Accounts continue to maintain “prohibitive” charges (according to respondents). Respondents however stick to particular banks as their main banks.

A cloud view of the open ended question posed to respondents  shows that certain words standout, chief among these words are Customer, ATM, Friendliness, long queue an Internet banking. Some of the most pointed comments made by respondents listed below (they are repeated just as they were said):

• Please increase security for online transactions.

• Zenith Bank should focus more on customers’ satisfaction and efficient and quality service delivery, there is still a lot of catching up to do

• Communicate more on why your e-services should be used

• Banks should increase the number of their ATM machines and make available loans to public servants

• keep up the good work

• The recent First Bank upgrade is not working-always, no network. Do something before we change their name to no network bank

• Banks should always respect customers, no matter how rich or poor the customer may be

• General overhaul of the banking system, training for staff, better equipments and facilities, more ATM machines and branches

• better customer services

• give loans to small businesses especially to people like me who do business with little amount

• We need more banks in Numan, Adamawa state

• GTBank should improve more on their ATM, the so called e-transact centers are nothing to write home about. One or two machines will be working out of seven machines. They really need to buckle up on their ATM terminal. It is a good bank however; especially their online banking is superb.

• My main bank being First Bank, should wean itself of civil service mentality as well as the belief that they are doing small depositors like us a favour by keeping our money, since they have the multinationals and big depositors with them.

One thing is clear; Nigeria’s bank customers more than ever are interested in performance, security, service and quality. They demand better services. But most bank customers stick to their banks for period higher than 5 years and above. 

A comprehensive version of the survey responses is included in our banking report 2013 which is to be published next month.