Report presents the results of the 5th edition of the annual customer experience survey conducted by KPMG.

1. Alternative Channels:
Building an optimal channel
delivery strategy
2011 Banking Industry
Customer Satisfaction
Survey

2. Contents
Foreword
Scope and Methodology
The Customer’s Experience
The Alternative Delivery Dilemma
Conclusion
1
2
4
10
13
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.

3. Be everywhere, do everything, and
never fail to astonish the customer.
I am delighted to welcome you to the 2011 and 5th edition of the KPMG Banking
Industry Customer Satisfaction Survey.
As banks are undergoing a dramatic shift in their governance and operating models in
order to align with regulatory demands and competitive realities, new technologies are
quickening the pace of change, allowing financial institutions to embark on a journey
towards integrated delivery channels. For the serious industry players, the addition of
powerful customer knowledge systems will provide the much needed impetus that
will facilitate the consistency of the customers experience across the various delivery
channels available to banks customers.
Against the backdrop of the recent regulator-led reform interventions, Nigerian banks
continue to grapple with multiple regulatory compliance issues. These issues,
occurring amidst the struggle for survival on the “war on recoveries”
, seem to have
moved customer service to the backburner.
This year, our results show a decline in the overall customer satisfaction index across
all customer segments which may be indicative of the perceived reduced attention
that customers received from their banks. In this edition of the survey, we have once
again expanded the scope of the survey by increasing the number of respondents
across all customer segments and locations in Nigeria (i.e. about 8,000 retail, 1,100
SME and 450 commercial/corporate respondents across ten (10) locations nationwide)
and have gone a step further to assess the satisfaction levels of banking customers in
Ghana.
In conclusion, it is pertinent to note that this year (as in previous years), financial
stability and the bank’s image and reputation continue to feature as the key reasons
why customers maintain banking relationships.
We hope that this initiative will continue to spur Nigerian banks to go the extra mile in
their quest to render superior customer service.
Adebisi Lamikanra
Partner, Performance and Technology
1 Foreword
Macy's Motto
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Page 1
Banking Survey Issue 5

4. The 5th edition of the KPMG Banking Industry Customer Satisfaction Survey (BICSS)
focuses on assessing the performance of banks in providing value and satisfying their
customers, particularly through the use of alternative delivery channels.
In this year’s survey, to ensure a more refined assessment of customer satisfaction overall
and provide respondents with a wider range of response options, the rating scales used to
measure satisfaction and importance levels were increased from a 5 point scale to a 7
point scale and from a 4 point scale to a 5 point scale, respectively.
As is the usual practice, selection of respondents in the Commercial/Corporate segments
was driven by the need to ensure the inclusion of the leading companies in each of the
major business sectors. Sampling was based on KPMG’s internal database of formal
business establishments as well as the most recent copy of the top 500 Companies in
Nigeria (2010 Goldstar Publications).
For the Retail and SME segments, in determining the respondents to be sampled,
important factors like the commercial activity and location were considered. For these
segments, customers were sampled across ten (10) locations country-wide; Aba, Abuja,
Benin, Ibadan, Kaduna, Kano, Lagos, Maiduguri, Onitsha and Port-Harcourt.
In each of these locations, Retail/SME respondents were randomly selected from high
density/ traffic areas like shopping malls, markets, university campuses, residential areas,
state and federal secretariat complexes, business offices, etc.
The survey targeted a minimum respondent number/ size for each of the 24 banks; and as
a result of inadequate responses, four (4) banks were excluded from the ranking.
A similar survey approach was also adopted for assessing the customer satisfaction level
of corporate customers in Ghana.
Figure 4: Corporate Respondent Demographics: Analysis by Industry
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
2 Scope and Methodology
N250m-N1b
24%
Greater than
N10b
13%
N5b-N10b
7%
Less than
N250m
29%
N1b-N5b
27%
LimitedLiability
Company
25%
NonGovernmental
Organisation
9%
Sole
Proprietorship
53%
LimitedLiability
Partnership
11%
Others
2%
Civil/Public
Servant
27%
Private
Sector
Employee
23%
Self-
Employed
24%
Student
25%
Others
1%
Figure 3: Corporate Respondent
Demographics: Analysis by Turnover
Figure 2 SME Respondent distribution-
Analysis by Establishment Type
:
Figure 1: Retail Respondent distribution -
Analysis by Occupational Category
Page 2
Banking Survey Issue 5
No of Respondents
8
13
15
15
20
21
22
24
25
26
31
31
32
41
48
69
0 25 50 75
Agriculture
Embassies/Multilaterals/Foundations/NGOs
Conglomerates
Trading
Real Estate and Construction
Media and Publishing
Airlines and Hospitality
Healthcare and Pharmaceuticals
Food, Beverage and Tobacco
Educational Institutions
Services (Professional, Engineering e.t.c)
Transport and Logistics
ICT and Telecoms
Oil and Gas
Manufacturing
Non-Bank Financial Services Institutions

5. © 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Page 3
Banking Survey Issue 5
HowYou Should Read and Interpret this Survey Report and its Findings
In reading this report, you should bear the following factors in mind:
1. This is a perception study
• This survey focuses on the perceived quality of customer service delivery by the banks from the
customer’s perspective (Retail, Corporate/Commercial and SMEs).
• This survey does not represent the opinion of KPMG on the skills, capabilities or performance of any of
the banks covered in the survey.
• KPMG conducts the survey, but findings represent the opinions of the customers of the banks.
• KPMG is responsible for defining the survey questionnaire administered to the respondents.
This survey does not seek to establish anything as absolute fact (as perceptions are by definition
subjective), but to report upon on the feelings and broader perceptions of customers with respect to
services provided by their banks. The rankings are solely based on the feedback received in the survey.
2. Perception is never balanced or fair, but the study always has a representative sample size
Banks rated in the survey vary by size, service offerings and customer profile. Respondents in the survey
are asked to rate their banks on a selection of key criteria; customer care services, product/service offering,
transaction methods and systems, convenience and pricing.
The minimum number of respondents required for each bank in the survey guarantees that the bank ratings
reflect the opinion of a representative customer group and not the opinions of individuals.
3. Banking Industry Customer Satisfaction Methodology
The overall methodology adopted in calculating the customer satisfaction index (CSI) remains the same as
with the previous editions and is as depicted in the diagram below.
Figure 5: Methodology for Computing Customer Satisfaction Index CSI
Pricing
Convenience
Transaction Methods & Systems
Product/Service Offering
Measures product range &
appropriateness to customers’ needs
Measures customer support processes/
systems & turnaround time
Measures accessibility & quality of
service from delivery channels
Measures fees, charges and rates on
products
Overall Score CSI
Customer Service Factors
Ratings -
Satisfaction (S)
& Importance (I)
Weighted
Score
Perceived
Value
S I (S x I)/

6. Figure 7: Top 10 Most Customer Focused Banks - Retail
Customer Satisfaction Index (%)
68 69 70 71 72 73 74 75 76
First Bank
Intercontinental Bank
Equitorial Trust Bank
Skye Bank
Access Bank
Diamond Bank
Fidelity Bank
Stanbic IBTC Bank
GTBank
Zenith Bank
69.38
The Customer's Experience
Interestingly, for the first time, Equitorial Trust Bank is featured in the top ten, as Skye
Bank returned to the list after dropping out last year. First Bank was the other entrant
to the list at 10th position, with a CSI of 69.47
.
On an overall basis however, there was a general decline in average customer
satisfaction levels from 71.91 (in 2010) to 69.38 this year. Although Zenith Bank secured
the top position this year, its overall CSI was 2.51 less than that of the industry leader
last year.
Industry Service Leaders
Retail customers nationwide assessed satisfaction levels with their banks along the
five key service areas of Customer Care. Transaction Methods & Systems, Product and
Services, Pricing and Convenience. Zenith Bank was ranked 1st in the Customer Care,
Transaction Methods & Systems and Convenience while GT Bank was ranked 1st in
the Product/Service Offering and Pricing.
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
This section analyses customers feedback based on their satisfaction with the service
delivery and performance from banks. Key questions that this year’s survey seeks to
address include: Will the performance of banks in the area of customer satisfaction this
year be significantly different from previous years? Which banks have continued to
provide the most consistent customer experience over the last 12 months? Are
customers satisfied with the banks’ service delivery channels? The answers to these
questions and more will have far reaching implications for banks as they create their
service delivery strategies.
The result of this year’s survey has been very interesting as new names have emerged
in the top 10 list across the various customer segments.
Zenith emerges as the most Customer Focused Bank in the Retail Segment
Zenith Bank, with a CSI of 75.76, has secured the top position, ending the 3 year reign
of GT Bank in the Retail Banking space. GT Bank came second with a CSI rating of
73.99, while new entrant Stanbic- IBTC rounded up the top three position, with a CSI
rating of 72.57
.
Location Bank
Aba Fin Bank
Abuja GT Bank
Benin Zenith Bank
Ibadan Zenith Bank
Kaduna Stanbic-IBTC Bank
Kano Zenith Bank
Lagos Zenith Bank
Maiduguri Stanbic-IBTC Bank
Onitsha Stanbic-IBTC Bank
Port-Harcourt GT Bank
Figure 6: M ost Customer Focused Bank by Location:
Retail
3
75.8
74.0
72.6
72.2
71.8
71.2
71.2
70.1
69.8
69.5
Page 4
Banking Survey Issue 5

7. Customer Service Areas
(SME Segment)
Ranking
1 2 3
Customer Care
Standard Chartered
Bank
DiamondBank GT Bank
Product/Services Offering Stanbic- IBTC Bank
Standard Chartered
Bank
DiamondBank
Transactions Methods and
Systems
Standard Chartered
Bank
Stanbic- IBTC Bank Zenith Bank
Convenience Zenith Bank
Standard Chartered
Bank
DiamondBank
Pricing Stanbic- IBTC Bank GT Bank DiamondBank
Figure 12: Ranking of Bank Performance by Customer Service Areas -
Channels (Retail)
Ranking
1 2 3
ATM Zenith Bank GT Bank Skye Bank
Branch Zenith Bank Fidelity Bank Intercontinental Bank
Internet Banking Zenith Bank GT Bank Stanbic-IBTC Bank
Call Center Zenith Bank Stanbic-IBTC Bank GT Bank
Figure 9: Ranking of Bank Performance by Service Delivery Channels - Retail
Customer Service Areas(Retail
Segment)
Ranking
1 2 3
Customer Care Zenith Bank GT Bank Stanbic IBTC Bank
Product/Services Offering GT Bank Zenith Bank Stanbic IBTC Bank
Transactions Methods and
Systems
Zenith Bank Fidelity Bank GT Bank
Convenience Zenith Bank GT Bank Fidelity Bank
Pricing GT Bank Zenith Bank Access Bank
Figure 8: Ranking of Bank Performance by Customer Service Areas - Retail
Service Delivery Channel Champions
The assessment of service delivery channels was driven among others, by such factors as
proximity and accessibility, functionality and availability as well as overall quality of service
derived at the channel.
Zenith Bank led in service delivery, across all channels, with CSI ratings of 77
.02, 78.82,
75.54 and 73.88 for the ATM, Branch, Internet Banking and Call Centre, respectively.
However, there was also a notable decrease in CSI scores across the delivery channels
when compared to the CSIs from the previous year’s survey, which may be indicative of a
general decline in customer satisfaction and/or high expectations by customers.
2011 SME Focused Banks
About 1,100 SME customers were sampled across ten (10) locations, nation-wide.
Standard Chartered Bank and Stanbic-IBTC Bank demonstrated a good showing in the
SME segment across the five (5) key service areas (i.e customer care, products/service
offering, transaction methods and systems and pricing), a situation which is a reversal of
last year’s result where GTBank and Zenith emerged as the SME segment champions.
Zenith Bank and GT Bank
Lead across Major
Customer Service Areas
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Standard Chartered Bank
and Stanbic-IBTC emerge
as clear leaders in the
SME customer segment
SME
Page 5
Banking Survey Issue 5

8. Customer Service Areas
(Corporate Segment)
Ranking
1 2 3
Customer Care Zenith Bank FCMB GT Bank
Product/Services Offering GT Bank FCMB Zenith Bank
Transactions Methods
andSystems
GT Bank Zenith Bank Standard Chartered
Convenience Zenith Bank GT Bank FCMB
Pricing FCMB Sterling Bank GT Bank
73 74 75 76 77 78 79
Skye Bank
UBA
Fidelity Bank
Diamond Bank
First Bank
Sterling Bank
Access Bank
FCMB
Zenith Bank
GTBank
Customer SatisfactionIndex (%)
73.71
Figure 12: Ranking of Bank Performance by Customer Service Areas - Corporate
Figure 11: Top 10 Most Customer Focused Banks - Corporate
GT Bank unmoved, retains leadership in the Corporate Segment
GT Bank emerged top on the list as the most customer focused bank of the corporate
segment, as it retained its position with a CSI of 78.07(a decline from last year’s CSI score
of 80.08) . In the same vein, Zenith Bank also maintained its 2nd position with a CSI score of
77
.74 (representing a 0.52 decline from its score last year). FCMB came closely behind
Zenith Bank to clinch the 3rd position with a CSI of 77
.41, equally retaining its last year’s
position
Sterling Bank and UBA made their debut into the Top 10 list for the corporate segment with
CSI’s of 75.16 and 74.33, respectively.
GT Bank, Zenith Bank and FCMB lead the pack across all service areas
GT Bank and Zenith Bank both led the pack in four different service areas. GT Bank led the
Products/Service offering and Transaction Methods and Systems areas while Zenith bank led
Customer Care and Convenience service areas. FCMB came 1st in Pricing.
Bank Ratings per Industry
This table summarises customer satisfaction ratings across different industries in the
corporate customer segment. Entities in the Airlines and Hospitality Industry appeared the
most satisfied, with a CSI score of 77
.8, while Non-Banking financial services institutions
seemed the least satisfied with a CSI of 71.2.
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
GT Bank retains top
position as most
customer focused bank
in corporate segment
78.1
77.7
77.4
75.2
75.2
74.9
74.7
74.6
74.3
74.1
Page 6
Banking Survey Issue 5

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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Figure 14: Rationale for Maintaining Banking Relationship: Corporate/Commercial
Figure 15: Rationale for Maintaining Banking Relationship: Retail/SME
Figure 13: Rating per Industry Corporate/Commercial
Reasons for Maintaining Banking Relationships
This year, “Financial Stability” emerged as the most important factor in deciding on the
choice of a bank. Financial stability displaced Excellent Customer Service as the key
rationale for maintaining banking relationship in the retail customer segment. Given the
recent turmoil in the industry it is not surprising that financial stability is now tops; it was
also a key factor after the last major point of inflection in the industry i.e. the industry
consolidation era.
8.4%
9.6%
10.2%
13.1%
16.0%
16.6%
5% 10% 15% 20%
Financial Stability
Customer Service
Image and Reputation
Proximity and Accessibility
Credit Processing
Full Range of Financial Services
Parent company Affiliate
Alternative Banking Channels
Pricing
Rating Frequency
Page 7
Banking Survey Issue 5
8.5%
8.7%
8.9%
Financial Stability
Image and Reputation
Customer Service
Access to credit
Proximity and Accessibility
Access to ATM and Other
Channels
Pricing
Rating Frequency
5% 10% 15%
Airlines and Hospitality
Manufacturing
Healthcare and Pharmaceuticals
Transport and Logistics
Conglomerates
Embassies/Multilaterals/Foundations/NGOs
Real Estate and Construction
Oil and Gas
Educational Institutions
ICT and Telecoms
Trading
Services (Professional, Engineering e.t.c)
Media and Publishing
Food, Beverage and Tobacco
Agriculture
Non-Bank Financial Services Institutions 71.2
72.6
73.1
73.9
73.9
74.8
74.8
75.7
75.7
75.9
75.9
76.2
76.8
77.0
77.4
77.8
68 70 72 74 76 78 80
10.9%
13.7%
Financial stability is the
primary reason for
maintaining banking relations
across all customer segments
11.0%
11.8%
12.2%
13.1%
13.1%

10. 64
65
71
72
91
98
148
191
208
209
50 100 150 200
FCMB
Skye Bank
Oceanic Bank
Intercontinental Bank
Diamond
Access Bank
UBA
First Bank
GT Bank
Zenith Bank
Rating Frequency
Figure 16
: Top 3 Customer Buyer Values by Segment
Figure 18: Top 10 Frequently Rated Banks: SME
Figure 19: Top 10 Frequently Rated Banks: Corporate
Customer Segment
1 2 3
Retail
Minimal transaction wait
time
Feedback resolution
system
ATM services
SME
Minimal transaction wait
time
Feedback resolution
system
Competitive interest
rates, fees and
charges
Corporate
Competitive interest
rate, fees and charges
Timely and accurate
transaction processing
Improved relationship
management
Service Expectations
To derive quick wins in satisfying retail and SME customers, banks need to focus on the speed of
their transaction processing as this segment of the market value speedy transactions and minimum
wait times. Corporate customers on the other hand, are cost conscious and therefore value
competitive rates, fees and other charges.
Key Buyer Values
GT Bank and Zenith Bank
emerge as the most
frequently rated banks in
Retail/SME and
Corporate/Commercial
respectively
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Frequency of Bank ratings per segment
The frequency of ratings per bank is an indication of the bank's market reach or share of the
customers mind. GTBank is the most rated bank by the retail and SME segments, while Zenith Bank
is the most frequently rated bank in the corporate segment.
GTBank
UBA
Oceanic Bank
First Bank
Intercontinental Bank
Bank PHB
Zenith Bank
Skye Bank
Diamond Bank
Fidelity Bank
200 400 600 800 1000 1200 1400 1600 1800
Rating Frequency
GTBank
First Bank
UBA
Oceanic Bank
Intercontinental Bank
Zenith Bank
Fidelity Bank
Diamond Bank
Bank PHB
Skye Bank
50 100 150 200 250
Rating Frequency
Page 8
Banking Survey Issue 5
213
209
205
168
143
128
84
83
78
67
17: Top 10 Frequently Rated Banks: Retail
Figure
1696
1346
1024
976
923
531
529
522
492
311

11. Page 9
Customer Service Areas
(Ghana)
Ranking
1
1 2
2 3
3
Customer Care CAL Bank
Merchant Bank
Ghana
UBA
Product/Services Off ering GT Bank Stanbic Bank Zenith Bank
Transactions Methods and
Systems
Zenith Bank UBA
Amalgamated
Bank Ltd
Convenience UBA Zenith Bank Stanbic Bank
Pricing Zenith Bank
Merchant Bank
Ghana
Stanbic Bank
70 72 74 76 78 80 82 84
Barclays
GCB
CAL
GTB
SCB
ECO
UBA
MBG
Stanbic
Zenith
Abbreviation Banks
Figure 22: Top 10 Most Customer Focused Banks - Ghana
Figure 20: Ranking of Bank Performance by Customer Service Areas- Ghana
Nigerian Banks lead service performance in Ghana’s Corporate Market
For the first time in the survey, the scope included banks in Ghana and addressed the
Corporate/Commercial banking segments only. Our results show a strong performance of
Nigerian banks across four out of five customer service areas. Zenith Bank, GT Bank and
UBA dominated the top 3 positions across the service areas, emerging on the list of Top
10 most customer focused banks for the corporate clients. Zenith Bank was 1st with a
CSI of 82.03; while UBA and GTBank clinched the 4th and 7th positions respectively.
Zenith, UBA and GT Bank
emerge in the Top 10 Most
Customer Focused Banks-
Ghana
82.0
80.7
80.4
79.1
77.3
76.0
75.9
74.4
74.1
73.0
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Figure 21: Abbreviation of Top 10 Most
Customer Focused Banks in Ghana
Zenith
Stanbic
MBG
UBA
ECO
SCB
GTB
CAL
GCB
Barclays
Zenith Bank of Ghana
Stanbic Bank
Metropolitan Bank Ghana
United Bank of Africa
Ecobank Ghana
Standard Chartered Bank
Ghana
GuarantyTrust Bank Ghana
CAL Bank
Ghana Commercial Bank LTD
Barclays Bank of Ghana
Banking Survey Issue 5

13. © 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
“Excellent firms don't believe
in excellence – only in constant
improvement and constant
change”
Tom Peters
Article : e-Payment: Boosting transactions on PoS
terminals in Nigeria, By DAYO OKETOLA,Sunday, 16 Jan 2011
Economist Intelligence Unit.
I.
II.
Building an optimal channel delivery strategy
The Alternative Delivery Dilemma
Page 10
4
Banking Survey Issue 5
Twenty years ago, banking was generally brick and mortar based. The norm was the queue line by
the counter with convenience seating for the long wait to pay in the branches. There were over 90
banks providing largely wholesale banking services with fewer large retail banks. A few banks had
deployed ATMs, first of which was installed in 1989 for Societe Generale Bank. Today, that norm is
long forgotten. With the growth in retail banking and the consolidation in the banking industry,
customer service and transaction channels have crafted a new normal for customers expectations
of service.
The Evolution
The deployment of alternative channels by Nigerian commercial banks has grown astronomically
over the last five years. With just 500 ATMs in 2006, the numbers have grown to 9,000 ATMs and
13,000 POS by the end of 2010, supporting electronic transactions of over N81 billion monthly!
After the banking consolidation in 2005, and the accompanying explosion in customer acquisition,
most banks began to aggressively deploy branches in major cities to meet the banking needs of the
growing customer base. Today, escalating costs associated with securing the ‘right location’, setup
and maintenance, as well as the daunting task of obtaining approvals required for branch expansion
has led more banks to review their channel strategy with increased focus on customer migration to
alternative channels.
The clear logic behind this strategy is the continued need to drive down the operating costs
associated with more expensive channels such as brick and mortar branches as compared to lower
cost virtual channels like ATMs, POS terminals and internet banking. Furthermore, as customers
began to show a preference for ‘palace-like’ branches, and branches became swamped with long
queues and dissatisfied customers, banks had no choice but to further develop and redefine
alternative approaches to serving the vast customer base.
Commercial banks began deploying their ATMs outside bank branches to decongest the banking
halls. The ‘ATM expansion mantra’ extended to places where the retail customers spent money,
such as eateries, shopping malls, petrol stations e.t.c., among other off site locations. POS
terminals were also deployed to major merchants to promote non-cash payments, while the
internet banking portals with capability for account balance and fund transfers and account
notifications, became standard product offerings in the industry.
On the more revolutionary side, mobile banking has also been adopted, though not on a massive
scale, to facilitate payments, transfers and account transactions across banks. Banks are
increasingly refocusing their strategies on multi-channel banking architecture to cater to differing
customer segment needs as the more traditional services offered by branches have been
successfully duplicated using less expensive electronic channels.
Today, the alternative channel dilemma continues to stare many retail focused commercial banks in
the face. With huge investments in technology based channels including Contact Centres, a
swelling customer base and mounting customer dissatisfaction issues, banks need to more than
ever before, address the issues related to channels, decisively.
The fundamental question lingers….”How do we deploy the right channel mix for our
customers in the most cost efficient approach whilst providing a satisfying experience at
each point?”

14. Page 11
Banking Survey Issue 5
“The single most important
thing to remember about
any enterprise is that there
are no results inside its
walls.The result of a
business is a satisfied
customer.”
Peter Drucker
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
See King and Levine and Klapper, Laeven,
and Rajan
Balancing customer needs in retail banking distribution.
Thomas Andersson et al, McKinsey Quarterly/
III.
IV.
Having a clear channel strategy
Banks with significant number of retail customers need to define a clear channel strategy
which defines the approach, basis and methods of channel deployment and operations to
provide its customers with service. As with any strategy, it will necessarily include trade-offs,
expected results and approaches to address implementation issues that will surface. A clear
channel strategy will also clearly map the multiple channel interfaces to the service offerings
and provide a framework for uniform customer service experience across these channels.
Understanding the Customers ‘Hygiene’ Needs
One of the fundamental areas that might have been overlooked by banks is the basic ‘hygiene’
factor that drive customer behaviour. The ‘hygiene’ factor drives negative response, it is an
expected factor such that its presence might not drive improved satisfaction levels, but its
absence has significant impact on customer satisfaction.
Banks need to understand the mix of customers in their books. A basic approach would be to
dimension the customers based on age demographics. The older customers who were
familiar with the old ‘norm’ of traditional banking are generally less predisposed to migrating
to electronic channels such as ATM and internet banking. Such customers expect to continue
to use traditional branch channels to drive their banking relationships. The younger customers
however are more comfortable with electronic channels and also largely intolerant of long wait
times in branch queues.
This younger generation, however, have a lower tolerance for complex or unfriendly interfaces,
unstable systems or long loading times. This makes them lean to the channels that provide
speed, ease of use and reliability.
Seizing the Mobile Opportunity -The M-PESA Experiment
The advent of mobile banking in Nigeria has come a long way, but is now coming of age.
Unlike most other channels, the penetration of the mobile phone has unprecedented uptake
as there are more mobile phones in Nigeria than bank accounts! With over 75 million mobile
users and counting, its uptake has successfully crossed the age and geographic distribution
barriers that have limited other banking channels.
M-PESA, Kenya’s pioneer mobile payment service offered by Safaricom is a small-value
electronic payment and store of value system that is accessible from ordinary mobile phones.
It has seen exceptional growth since its introduction in March 2007
. It has already been
adopted by 9 million customers (corresponding to 40% of Kenya’s adult population). Within
about a year, Safaricom became the biggest ‘bank’ in East Africa. Customers can cash in and
cash out from their M-PESA account at any of 17
,000 authorized retail outlets in the country.
Today, customers can use their phones to pay for cab rides and electricity, to get money out of
ATMs without owning an ATM card or even having a traditional bank account, pay for water
(especially in rural areas where wells are installed for free, complete with an integrated cell
phone payment system), etc
M-PESA has prompted a rethink on the optimal sequencing of financial inclusion strategies:
rather than “credit-led” or “savings-led” approaches, the M-PESA experience suggests that
there may be a third approach – focus first on building the payment “rails” on which a broader
set of financial services can ride.

15. A new retail banking landscape is evolving with the hand held mobile device at its
centre. Discerning banks will begin to explore the inherent opportunities that exist in
harmonizing mobile banking solutions with other channels and ensuring early
partnership with the mobile banking platform providers to drive market penetration.
Crafting a multi channel strategy
Success in retail banking is largely dependent on expert management of distribution channels.
It is very important that banks manage customer needs and address the unfavourable cost
profile of traditional branch banking. However, with the number of alternative delivery
channels, this may seem a herculean task.
Key milestones towards creating a multi channel strategy include:
• Create distinct customer segmentation schemes based on customer activity on different
service delivery channels;
• Define distinctive value propositions for different segments;
• Continue to provide multiple delivery channel access; and
• Create performance evaluation metrics to benchmark progress.
Market place dominance will likely be realized by the bank that has a clear strategy on how to
improve the customer service value by aligning distinct customer segment value propositions
with the appropriate channel delivery mix.
There are no traffic
jams along the extra
mile".
Page 12
Banking Survey Issue 5
Roger Staubach
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.

16. 5
Keeping An Eye on the "Ball" in the midst of significant Industry changes
Conclusion
Conclusion
Page 13
Banking Survey Issue 5
© 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.
Evolving technologies and the changing landscape continue to raise customer expectations;
however the turmoil in the industry and the fight for survival have meant that the focus on
customers needs has somewhat taken the backseat. This is evidenced by the decline in
satisfaction scores across all market segments and customer service areas in this year’s
survey results. The customers' basic buyer values remain unchanged and still hovers around
the fundamentals: Minimal transaction time; improved feedback resolution; timely and
accurate transaction processing and; improved relationship management.
Despite the pockets of initiatives to improve service being implemented by the banks, the
results of the survey has shown that these initiatives are yet to yield the desired impact on
the customers, as the banks continue to fall short of their customers' expectations. Banks will
therefore need to adopt a holistic and coherent approach to service delivery in order to
address these deficiencies.
The retail distribution landscape is transiting from a branch dominated paradigm where service
is provided within the branch to one of integration and balance among multiple delivery
channels. The position of the branch is shifting from the main transaction center to a place
where only high value services and advice are provided. This integrated landscape is
necessary to serve different customer segments. Therefore, banks may need to rethink and
redefine the role of their branches.
Proactively understanding and defining the appropriate channel strategy/products/services is
key to winning the customer war. The banks who will be successful will have to effectively
juggle all demands in an ever-changing operating environment, while they keep their eyes on
the ball - the customer!

17. © 2011 KPMG Professional Services, a Nigerian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Nigeria.