Former Chairman of Advertising Practitioners Council of Nigeria (APCON) and CEO Prima Garnet Africa, Mr Lolu Akinwunmi, has called for a general simplification of the operating models of banks in Nigeria to reduce costs and meet rising customer expectations.
Akinwunmi who delivered a paper titled “Product Portfolio Management and Branding – The Future of the Retail Banking Ecosystem In Nigeria” at the maiden edition of BRANDish Meeting of Minds held at the White House Hotel, GRA, Ikeja.
The maiden edition which had as its theme, “What Nigerian Banks Should Do Differently” had in attendance senior players in the Nigerian banking and marketing communications industry as the first in what the promoters of BRANDish, led by Ikem Okuhu, envision to be a quarter event where serious issues affected the economy will be dissected.
Lolu Akinwunmi was worried that marketers of banking products today have a simplistic understanding of their customers and a vastly complex product set.
“They typically do not know their customers very well. Many still try to sell customers the same multiple product offers in the hope that something will stick. They struggle to join the dots internally and prepare bank-wide views of a customer relationship, let alone integrate external sources of data,” he observed.
Although he noted that historically, banks with the best and/or biggest branch footprint have dominated the business and have gained a disproportionate share in their markets, he cautioned that in future, much of today’s infrastructure will not be a competitive advantage as those who will lead in the future will offer an anytime/anywhere service, fully utilizing all banking channels in an integrated fashion.
The former APCON Chairman also frowned at what he described as the “staggeringly complex and costly business models” that have been developed by the banks over the years and called for their simplification to meet rising customer expectations, regulatory requirements and shareholder value.
“Rising customer expectations, increasingly active regulators and stagnant shareholder returns demand it. Efforts thus far have not been enough. Many financial institutions have been built over decades of acquisitions, and new product and channel development, typically with each development adding additional systems, layers, processes and costs. Few have tackled the difficult and expensive work of integrating, optimizing and simplifying their platforms,” he noted.
He advised banks and bankers to learn from other industries, saying most consumer products do not, for example, own the entire value chain but, on the contrary, focus on what makes them distinctive and contract much of the rest to third party specialists.
Noting the banking industry and the consumers they serve now generate exponentially more information than ever before, Akinwunmi believes this should be exploited by the banks to gain useful insights on customers for competitive advantage but regretted that only few banks are positioned to integrate, analyze and act on the insights from the massive data streams available today.
“In the future, leading players will exploit both structured and unstructured information — from traditional sources (such as credit scores and customer surveys) and from non-traditional sources (such as social media, and cross-channel bank customer interaction data). They will collect and purchase other behavioral data (such as mobile location and purchase data) — particularly as customers grow accustomed to surrendering privacy in a voluntary value exchange,” he said.
He also frowned at frequent situations where campaigns are ill-thought out and designed to please the egos of the bank executives and not to speak to the customer.
Noting that some banks have been mispriortizing by producing campaigns that do not speak to the target audience, he warned that high quality adverts and communications material produced abroad but which does not speak to the target is wasteful.
“There will be a need to critically define and pinpoint the real customers and where they are, so that specific products and services can be targeted at them. Banks will also need to diversify their portfolio of activities. Everyone is doing promos. Everyone is sponsoring one thing or the other. Banks are speaking to customers in vernacular and using English language jingles. There will be need for more detailed research into what specific customers need so that the appropriate communication can be developed for them,” he concluded.