Banks exist for a single purpose, which is to effectively mobilize funds from people in excess of them to those in deficit of them. Interestingly banks have steadily diverted attention from what they exist for to who they are in business for. Customer satisfaction has become the heart beat of not only survival in the banking sector, but a resounding ingredient in amassing growth in what seems to be a muscle-pull race. What this has done is to make customers feel like they are in control and most importantly that their needs are being aptly met. Banks have therefore convinced customers that convenience is what they should judge the relevance of their foothold that is laced into their lives. But first, it must be understood what this new buzz word means. The KPMG African Banking Industry customer satisfaction survey that was undertaken in April 2013 alludes to convenience as the ability of customers to serve themselves anytime, anywhere through the use of products and services made available to them by banks. The study surveyed over 25 000 retail banking customers in 14 African countries and its findings reveal what customers think of their banks. It gives an interesting finding that “there has never been such a time in history, like now, when technology has transformed the finance world, especially banking, leaving customers yearning for more innovative products and services from their banks.” What this means is that customers cannot enjoy accessibility as well as quality of service without the intelligence of technology.
What should now be explored is the different ways through which convenience is stringed into customers’ lives. The study found out that the use of branches and ATMs sunk deep into customers’ minds that they have overtime struggled to embrace other channels in the same light; “not surprisingly, branches remain the most used channel in Africa at 99 percent, followed by ATMs at 85 percent while all other channels (mobile banking, point of sale, internet banking) lag behind with rates below 30 percent.” According to the survey ATM use is the fastest growing channel whereas mobile penetration is higher than that of internet and is also expected to heighten in the future. Kenya’s unrivaled lead in mobile payments is said to have helped it increase access to financial services through its 40,000 M-Pesa service locations via local agents compared to only 840 bank branches across the country in 2010. The study likewise recognizes Botswana as one of the countries with the highest mobile penetration, which it estimates at 78 percent. Internet banking is on the one hand estimated at about 10 percent. It however surfaced that mobile banking in Africa has not yet honed its grip on some basic transactions, an example the study gives is that only 4 percent of respondents use mobile banking for balance enquiry as opposed to 60 percent that prefers to go to the branches.
Convenience is not without a price, but even so the cost must be such that it does not motivate a customer to switch banks. The respondents regard high bank fees as a discouraging factor, which is likely to influence a change of banks. The tower group/ Fiserve/ M-com Data (2009) as provided by the study disclose transactions costs of the different channels that are used as follows;
It is evident from the data that the most expensive service delivery is done through branches as opposed to mobile banking, which is the cheapest channel of delivery. The study advises that products and services should be offered to suit the specific needs of customers through recognizing customer segmentation; “with customer segmentation (example age, profession, income), banks should divide their customer base into clusters with similar characteristics in order to provide value and sales propositions which are effective and unique to each segment.”
Given that a solid foundation has been laid to understand the different dynamics of convenience, it is now fitting to zoom into the findings that are specific to Botswana (Number of respondents = 1,960). The study recognizes the progressive strides Botswana’s banking sector has taken with time; “indeed, there have been important positive developments in the banking sector in recent years, with enhanced competition, innovations in product and service delivery, and greater choices for customers (especially savers) both within and outside the country.” The statistics however show that there is room to transform Botswana’s banking sector into a flagship story with regard to financial inclusion. The study estimates that from the two million population, 38 percent of it is bankable, 24 percent is banked and 14 percent is available as an entirely untapped market.
Botswana’s figures describe it a diversified banking sector, which the study proves as having the highest alternate use of convenient products and services out of all the 14 countries surveyed. The use of point of sale (POS) particularly stands out as a preferred method of payment in comparison to using a branch, estimated at 69 percent and 14 percent respectively. The commercial banks apparently have a footprint of 96 branches in Botswana, with most situated in the country’s economic hub, Gaborone. 37 percent of the respondents check their account balance at the ATM compared to 27 percent that does it through mobile banking and when it comes to transferring funds, 66 percent take a trip to the branch whereas a mere 24 percent press a few buttons on the phone to do the transaction. This 24 percent is interestingly one of the highest among the countries surveyed.
Customers in Botswana wish to have the wait times for transaction processing and requests reduced, as well being helped by more upbeat and welcoming staff.
The respondents gave a pecking order of banks that they consider to have a keen interest in what they need. Bank Gaborone and First National Bank Botswana (FNBB) took the lead with a tie, with Stanbic coming third. The two oldest banks, Barclays and Standard Chartered made the rank, with Barclays scooping the forth position leaving Standard Chartered with the final spot. Bank Gaborone is the only new entrant among the old flock and is suspected to have clinched the top spot because of its ability to provide more specialized services compared to bigger banks and also given its relatively small customer base. However specifically relating to convenience customers gave FNBB an unsurpassed lead, with Bank Gaborone treading closely, while both Stanbic and Barclays sit on third position. FNBB has earned its dominance in the market through its wide array of game changing products and services.
It is now worth finding out what role commercial banks in the market have played, especially in channels such as ATMs, mobile banking and online which hold the opportunity for them to not only be identified as trend setters and customer-focused but also enable them to push the rigid growth boundaries. A few banks in the market pride themselves in having introduced a “first” into the banking space and do so with a bold and loud proclamation that innovation is weaved into their existence. A look at the “firsts” bring the following banks into this limelight;
On Wednesday 22 October 2014 Pan African commercial bank BancABC – with only 4 years in the retail space- introduced to the market a 24 hour “Help-my-card” SMS service, a first of its kind in Botswana’s mobile banking field. BancABC customers can now use their cellphones from any mobile network in Botswana, linked to their BancABC bank cards, to perform various actions such as to block, activate as well as to check the balance using an SMS short code. The blocking and activation commands are especially used in the case of emergency, for example when a customer’s card is either lost or misplaced. The advantage of the service is that it is free on the debit and credit cards, with the exception of a prepaid card which imposes a charge of 0.58t to check the balance. The charge is said to be an existing balance enquiry fee that is stipulated in the Bank’s tariff guide. The bank has put in place the 24 hour call centre service, which opened in December last year, as an alternative channel to use in case of a network failure or even when the cellphone is stolen. The call centre uses an intelleigent voice tool. The innovative mobile service is an effort of the bank’s commitment to empower customers over their card activities in the sense of bringing convenience to their fingertips.
FNBB dished into the market, on Wednesday 18 June 2014, the 24 hour ATM Advance with real time cash deposits, a first of its kind in Botswana’s ATM channel. The ATM Advance is the bank’s deliberate move to make the ATM appealing to its customers so as to reduce their heavy use of a branch. The advantage of this innovative service is that customers can now make deposits outside of normal banking hours, and its real time characteristic makes funds readily available to be used for other services such as paying bills. Businesses, especially small enterprises benefit from the service because they can now dedicate their time to more important business tasks during working hours, leaving outside hours to depositing their day’s takings. The service as the bank describes it is to make banking an efficient and pleasurable experience for its customers.
Standard chartered bank brought into the market the straight2bank, S2B, business internet banking service, a first of its kind on the Online channel. The bank took seriously the “business never sleeps” mantra, and even though internet use in Botswana is relatively low, the bank’s forward thinking has hooked businesses unto the convenience of doing business in just a click. S2B performs various real time actions. Businesses can link all their transactions into a single account that makes payments within the country and also across borders giving the efficiency of cash flow management. S2B further gives businesses global access through its foreign exchange actions. The advantage of S2B is that it gives 90 days of historical data on all transactions performed.