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After Recapitalization, what next? …customer mindshare becomes the new battleground for Ghanaian banks.



Until a few years ago, Ghanaian banks enjoyed comfortable incumbency in the market, with modest expectations from customers in terms of their banking experience and loyalty based on a relationship-banking model. Ghana’s banking industry was inundated by an overwhelming number of 36 banks until the recapitalization exercise that has pruned the numbers to 23 banking institutions now operating in the country.

Before the exercise, most banks reaped the benefits of their extensive physical scale, significant brand recognition, and large stockpiles of capital to invest in growth initiatives. Considering the distrust of customers as a result of the turmoil in the industry, banks now have to struggle to compete for customers.

Also the idea of banks succeeding on their own on customer fronts, has started to shift under the pressure of changing customer preferences as a result of new entrants, in the form of Fintechs and other nonbank firms, who are also pushing the boundaries of customer experience. Currently, customers increasingly expect interactions with their banks to be as sophisticated and personalized as their experiences with other services. Thus, banks need to think beyond customer experience to a broader measure of what is called “customer mindshare.”

Customer mindshare is an aggregate of four components that includes customer experience but also takes a bank’s physical footprint, digital sophistication, and marketing presence into account. Along with a bank’s products and services, these factors are what will differentiate banks from the customer perspective going forward. In bank-to-bank comparisons, customer mindshare will be an effective predictor of a bank’s ability to acquire new customers and expand share of wallet with existing customers.


The new customer expectations

The aftermath of the banking crisis has resulted to customers expressing new demands and expectations from their banks. Three in particular stand out:

  • More—and better—digital functionality from financial-service providers. The traditional method of customers’ queueing to transact in the bank must make way for easy banking through the use digitally developed Apps. Research shows that the percentage of banking customers that prefer transacting through branches and the old, familiar forms of payment is declining precipitously and so newer models must be designed.
  • Significantly better levels of banking experience. Accustomed now to the high service levels of digital-first lifestyle merchants such as Amazon, Netflix, and Spotify, customers fully expect the same sophistication in service from their financial providers. While this has been true for some time, there are increasingly new providers (for example, fintechs) ready to step into the breach.
  • Beyond digital. A majority of customers clearly do want digital options—to varying degrees. Just as important, they will want a bank’s multiple channels to work together seamlessly. Furthermore, even in a digital age, research shows that a significant percentage of customers continue to value face-to-face interaction for more complex needs. As an example, for transactions such as opening new accounts, customers overwhelmingly will still prefer the personal attention of branch service.

The challenge for many banks will be that their current distribution models are not equipped to meet these changing expectations. Some banks serve multiple markets with diverse customers and regulations, and accordingly have evolved into highly complex organizations with matrices of management, departments, products, distribution channels, and IT systems. This complexity challenges their ability to deliver high-quality and seamless service across traditional and digital channels.

New customer needs, therefore, call for a new retail-banking distribution model. Many banks are aware of this imperative. With reformed regulation and capital requirement set in place, bankers must turn their focus to long-term institutional growth and sustainability, redesigning their distribution footprints and adopting new digital technologies. These are important steps, but we believe that building a new distribution model requires a new way of measuring success.


The new competitive ground: From share of wallet, to share of mind

Customer mindshare can be said to be a combination of products, services, functions, and access that creates an environment that encourages greater engagement between a bank and its customers. It is an aggregate metric that includes four factors:

  • physical footprint: a bank’s branches, ATMs, and other physical points of presence
  • digital maturity: the extent and sophistication of a bank’s web and mobile capabilities
  • share of voice: the level of a bank’s representation in advertising and marketing in the market
  • customer experience: a bank’s ability to fulfill customers’ expectations of service, within and across all channels

These four components, in aggregate, and in relative measures of weighting by market, provide a metric that correlates with a bank’s ability to acquire new customers and win share.


Physical footprint

Historically, banks have relied heavily on their branch networks to grow their share of deposits in any particular market. Branches are indeed still an important part of the distribution equation, but their impact is more nuanced.

Branch and deposit share are strongly correlated across four defined market sizes and growth levels, but the relationship is not as tightly aligned as it once was. Some banks fail to achieve the share that might be expected given their branch footprint, while others overperform—indicating that sheer scale does not determine the effectiveness of a branch strategy.


Digital maturity

Research shows, not surprisingly, that a bank’s “digital maturity” is a reliable indicator of its ability to gain digital current account volume through digital channels. Digitally mature banks recognize that the impact of digitization is not always directly measurable; they invest in digitizing features that increase adoption and engagement—such as mobile—even if the deposits are not necessarily being made through that channel. In other words, digital maturity bestows a kind of “halo effect” that draws deposits to the bank across all its channels, digital and nondigital.


Share of voice

Share of voice, or the reach and presence of advertising and marketing, carries great importance in increasing deposits. This is particularly true online, where the level of digital advertising and marketing is highly correlated with deposit share. Conversely, outdoor advertising, print, and mass media are losing impact. Share of voice is particularly important for banks entering new markets. The size of the branch network is only a part of the equation. It must be complemented by digital advertising and marketing.


Customer experience

Research shows that superior customer experience raises the likelihood that a customer will increase deposit balances and open new accounts and products at a bank. Highly satisfied customers are 2 to 3 times more likely than less-satisfied customers to express the intent to increase deposits at a bank, and 2.5 to 5 times more likely to open a new account or sign up for a new product.

Banks that deliver on customer experience and receive the highest marks for deposit-related customer satisfaction grow deposits faster than lower-rated competitors.


How can banks win?

Analyses underscore the fact that the size of a bank’s branch footprint is no longer the overwhelming factor in deposit share it once was. Other components of customer mindshare—digital maturity, share of voice, and customer experience—are growing in importance. Accordingly, strategic reviews should be informed by customer-mindshare variables. Moreover, the industry has reached an inflection point where quick experimentation, agile delivery, and fast-paced evolution are becoming the norm for product development, and these banks should embrace these methods for testing and carrying out their strategies.

How banks should proceed depends on their current capabilities and the mix of markets in which they compete (small versus large, low growth versus high growth).


Implications for some banks

Given the extent of their overperformance in terms of branch effectiveness, especially in the market, some banks can consider reducing their branch presence where it makes sense to do so. They can then reinvest the cost savings to raise their customer-experience levels (where they tend to trail other banks) and develop truly sophisticated omnichannel experiences. Banks should also continue to build on their high share of voice, increasing their emphasis on digital channels and going even further with respect to personalization and targeting of marketing messaging. As customer expectations continue to rise, winning on digital sophistication and customer experience will be key for banks.


In all, retail banking in the Ghana is undergoing significant change, as the relevance of traditional branches becomes less clear cut and as customer preferences evolve. In this environment, the comparative performance of individual banks is becoming more pronounced. While the current moment presents challenges, it also represents an opportunity for forward-looking banks to build value and increase their customer mindshare.

In the next five years, the most creative and opportunistic banks will strengthen their relationships—or mindshare—with customers, and they will establish the next set of best practices for the industry.


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Why are local banks lagging behind in quality customer service delivery




Our local banks in Ghana (critically, the older banks) appear to be crippled by a cancerous cultural paradigm. These banks are usually unconcerned about the ongoing changes in the financial world. These banks behave as if they are rendering a favour to customers by serving them and as such portray a lackadaisical attitude and gross disrespect which have turned out to be norms in our banking system. Is this the culture?

Excuse me! Banking service is no favour. It is a high end business aimed at bringing in profit to the bank. Therefore, the Customer is King. The service a bank is delivering is aimed to make profit. Some of our local banks have an impregnable cultural paradigm. By Cultural Paradigm, I mean a set of assumptions held in common by all the staff and management yet taken for granted in the bank. These paradigms are often unspoken within the bank.

Some of our local banks have existed more than three decades in the Ghanaian banking market. Nevertheless, the annual financial performances of these old banks are nothing to write home about. One may ask the following question: Why are they not leading the pack? Why are they not able to raise the money to acquire the smaller and vulnerable banks who cannot meet the new minimum capital requirement? BANKING I believe it is because these banks do not have the balance sheet to give them the capacity to initiate acquisitions of this nature.

Corporate Culture, I believe, is a contributory factor to the poor financial performance of some of the banks. One may argue that just as we all can talk about different cultures such as French Culture, Arab Culture and Ghanaian Culture so can we equally give commentary on our local banks cultures; such as ADB Bank culture, Barclays Bank culture, Cal Bank Culture, Fidelity Bank culture, GCB Bank culture, Stanbic Bank culture Zenith Bank Culture, GHL Bank Culture etc. According to Charles Handy “Culture is the way we do things around here”. Culture is expressed as being the way people go about doing things around their environment where they belong or occupy.

Therefore, a corporate culture is the way staff do things around the company. This means the sum total of their belief, knowledge, attitudes, norms and customs that prevail in the organisation. The second tier of culture can be found in a sub-culture. A sub-culture is described as a group of people within a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong. A corporate culture has always aroused interest.

These interests in corporate culture have been sustained in both academic and professional environments and have been sustained and indeed raised by an increasing globalisation and knowledge. According to Andrzej Huczynski and David Buchanan (2001), organisational culture was originally introduced to managers predominantly by consultants. Corporate culture recently has proven to be very important.

  • Power Culture: Denoted by the Greek god “Zeus”, a Power Culture normally exhibits one major source of power and influence. It focuses on personal charisma and risk-taking.
  • Role Culture: A Role culture is denoted by the Greek god “Apollo”. In this version of culture, people describe their job by its duties, not by its purpose. So job descriptions dictate “the way we do things around here”. This form of culture is usually common in a bureaucratic organisation, where the organisational structure determines the authority and responsibility of individuals and there is a strong emphasis on hierarchy and status. This culture turns to focus on positions, bureaucracy, and hierarchy.
  • Task Culture: Task culture is denoted by the Greek god “Athena”. The emphasis here is on achieving the particular task at hand and staff may need to be flexible to ensure deadlines are met. People thus describe their positions in terms of the results they are achieving. Nothing is allowed to get in the way of task accomplishment. This is best seen in projects teams that exists for a specific task. Focus on problem-solving, teamwork, creativity.
  • Person Culture: Denoted by the Greek god “Dionysius”. Person Culture is characterised by the fact that it exists to satisfy the requirements of particular individual(s) involved in the organisation. The focus tends to be on individual needs (selfinterest) and independence. People in this type of corporate culture appear to ignore or breach corporate policies and procedures.

Once upon a time, I started my career as a bank clerk. I worked hard and was nominated as the First Male Teller in the bank I worked. In my experiences, some bank staff were seen as more cut for the Tellers (Cashiers) role than others. In those days, I saw it like “The Beauty and the Beast Contest”. The smiley types who wear a smile all the time, persons who were neatly dressed and presentable, persons who appear lively and bubbly all the time; these types of persons did well as Tellers because they smiled at you when you enter the banking hall. They were warm. Their smiles were always infectious. It is a big deal to us – customers – because it made customers felt welcomed. Just imagine when you walk into one of these institutions: a legal firm, a boutique shop, a nightclub, a bank or a hotel. What do you see that gives you your impressions about the place? A good corporate culture has good performance benefits to all stakeholders and as such we have to manage our corporate culture carefully because it impacts on:

• Customers

Poor corporate culture hinders quality customer service delivery. In a real case, one local bank failed to process a well labelled cheque paid into a customer of the bank’s account. The cheque was clearly labelled ‘special clearing’ instructions for more than 72 hours. Reason: Was mistakenly mixed with local clearing. Unbelievable excuse from the bank. It simply failed to deliver so the excuses were totally unacceptable.

• Team behaviour

In a Person cultured environment, some staff become powerful to the detriment of the team’s success. This is normally the case when people are appointed through introductions or referrals of a high placed director or shareholder. Such appointees assume unhealthy role of leaking team information to their referees. Consequently, they undermine the whole team’s togetherness and bonding. Some supervisors refuse to talk to these appointees for fear of intimidation.

•Easy decisions and control by Management

Staff who wield Person powers in a branch can frustrate management decisions because of fear of intimidation or reprisal. In one case study, one local bank junior staff who got employed through a connection with high-powered director(s) and or executive person(s) became a weaker link in the communication channel created by the bank. He/ She literally blocked management’s decision flow at his/ her desk because she/he knew a “director”.

• Staff performance and evaluation

In a person culture, individual staff performance becomes virtually impossible. In the case of the aforementioned example of the staff having a related link or relationship with an executive director or board member, some senior managers are not able to confront such staff on nonperformance issues. The said staff becomes untouchable. This leads to low performances in benchmark targets of the overall bank performance.

• Training and Development

In a very highly entrenched corporate culture, the people do not accept criticism of their behaviour. Consequently, training and development becomes impaired. Even when training is delivered, it is always watered down and not seen as a serious catalyst for change.

• Product development

Poor corporate culture generates poor products or services. It is strange but true that a poor corporate culture can so easily permeate an organisation’s values to dilute good product/service. This is especially relevant in a service industry such as a bank. A bank service is intangible. Therefore, a bank service can easily be incarcerated by a poor corporate culture.

This is due to the inseparability feature of a service and the deliverer of the service. Therefore, organisational culture varies from organisation to organisation while national culture differs from nation to nation.

In order not to be judgemental on a particular bank, (whatever the type of culture a particular bank has), let the bank’s management team ask themselves the question and answer themselves: Does our existing corporate culture impacts on our financial performance positively or negatively? Sometimes attitude, style and behaviours of staff towards a service delivery could fuel the anger of a customer.

On the contrary, some of the newer banks in the country are performing financially better than these older banks. Could these be attributed to culture or a case of wrong people placed in wrong roles? Although, the concept of organisational culture is not universally accepted it remains controversial, and the paradigm and definition wars continue to rage.

Others may reject the argument of different corporate cultures. Nevertheless, Corporate Culture is believed to affect organisational performance. Therefore, bank executives are expected to manage the respective corporate culture in their banking environment so as to improve the banks financial performance.

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