Nigerian banks: Profiting from atrocious customer service!

Even as the economy slumps, Nigerian banks are reporting record profits after tax for 2023. Their declaration of self-evaluated “exceptional and impressive performance in all major indicators” makes it quite clear that customer service is evidently not one of their “major indicators”.

Even as billionaire bankers are being appointed to senior federal government economic advisory positions, it is important to point of that their financial success is predicated upon the exploitation of Naira depreciation and high-interest rates. By law, the relationship between banks and their customers is a contractual one in which banks are supposed to provide reasonable care with customers’ funds, treat their customers with respect and courtesy, and respond to enquiries and complaints swiftly and effectively.

Even as cases of fraud by bank staff are on the increase and banks are failing to secure funds in accounts, banks have become perennially poor providers of decent all-round customer service. Customers routinely complain of illegal deductions, hidden charges, inaccurate or failed transactions and general operational inefficiency.

In 2023 it was reported that complaints about services in the financial sector comprised one-third of all cases filed with the Federal Competition and Consumer Protection Commission (FCCCP) who themselves commented on the extraordinarily high volume of complaints. Although customers expect and deserve seamless, personalised, and convenient customer services the majority of banks happily continue failing to meet these expectations and entitlements.

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According to a KPMG Nigeria Banking Industry Customer Experience Survey, well over half of bank customers agree that banks don’t understand or appreciate their financial needs and preferences, let alone offer relevant solutions. The most common lamentations are long waiting times, rude or unhelpful staff, inaccurate or misleading information, failed transactions, illegal deductions and poor responsiveness to complaints.

Bank customers complain of routinely being made to wait weeks or even months for their issues to be resolved which causes many to simply give up trying to get their bank to refund their money from failed transactions.

Undoubtedly this adds immensely to profitable bank operations. The interminable delays in customer service will continue because it is a profitable practice. No bank employs people whose job it is to improve efficiency and reduce time wasted in customer service by monitoring exactly how long customers need to spend in a branch before being served. It is common to see customers waiting for hours while only one or two bank staff engage in customer service.

Bank managers appear oblivious to the fact that they only open on working days and it is a sign of disregard for the value of customers’ time they have to spend so long away from their place of work simply to rectify a complaint. These complaints are reflected in a plethora of daily social media posts expressing frustration over Nigerian banks.

 It’s paradoxical that even as banks declare record profits, their lack of transparency and accountability, frequent system downtimes, unconfirmed transactions, untimely reversals, and poor complaint resolution means that customers have lowering trust in them! 

A study by Emerald Insight stated that only 36 per cent of customers trust their bank to act fairly and honestly with them because most customers do not audit their bank statements and the bank’s duty to repay excess charges is only triggered by customer complaints. As a result, Nigerian banks feel no need to minimise burgeoning grievances by minimising pains, dispensing with frustration, fulfilling expectations and prioritising customer satisfaction. Unsurprisingly Nigerian banks are facing stiff competition from digital players such as e-wallets and payment platforms which offer far more convenient, affordable and customer-friendly service in areas of payments, transfers, and loans, and which also have streamlined complaint resolution and empathy built into their system.

There can be no disputing that banks play an essential role in the economy but they should be forewarned that their actions can have a weighty impact on the lives of their customers. In a situation in which customer loyalty is supposed to be the backbone for the success and sustainability of any business, banking loyalty is in steep decline in Nigeria. Citizens now operate accounts in more than one bank in order to ensure they can transact their business when a particular bank’s mobile app or internet system is “down” which is routinely the case with Nigeria’s major banks.

A recent report stated that even as banks prosper and declare record profits less than 50% of Nigerian bank customers would recommend their bank to a friend or relation because they are all equally as bad in terms of poor customer service! In Nigeria’s highly commercialised awards industry, bankers happily accept plaques engraved with “best bank in customer service” which ignore the truth that all Nigerian banks are substandard in this area and leave much to be desired!

Banks take advantage of the fact that the process for lodging a complaint against them is cumbersome and time-wasting. It requires submitting a letter to the Central Bank of Nigeria. The declaration of massive profits by Nigerian banks quite deplorably enforces the belief that collusion with the corrupt and disrespect for citizens who are not wealthy are key to operating successful businesses in Nigeria. Hence Nigerian banks will continue to maximize profits despite atrocious customer services!