By Omoh Gabriel, Judith Ufford and Princewill Ejukuru
Access Bank intends to be known as the most respected African bank. We are going about it in a sustainable way with a philosophy. We have a reputable and sustainable banking philosophy, a philosophy that has propelled tens and thousands of people who work with us to deliver tangible solutions of reputable financial services across Nigeria.
We have here a responsive banking system/services, banking is not just a business, it is a privilege which carries a responsibility. There are two activities that confer on you a responsibility; one is school and the other bank.
Any of us with children can take a decision to put our most valued asset into the hands of this school from 7am to 2pm and come back to collect our children, I can’t ask you to come and put your children in my house, you will think I am a mad man. The man who has a school will ask you to bring your children and you will oblige him.
Similarly, if I just put one building here, and ask you to bring your money, you will say I am a mad man, but if I have a bank name on the building, and ask you to bring your money, your life savings; if you are licensed today as a bank, you have the privilege to invite millions to deposit their money with you, you will do, because you know it is based on trust that people save with you as a bank. So, that confers a responsibility on you.
We want Africa to work the same way Asia works, and we want an African bank that works the way America works. African institutions must change. We are going to do the things we do to gain the respect of the world, and the financial position in Nigeria will change, all former behaviours in Nigeria will change, the market will change, and we will all be the better for it.
When we achieve the financial position we are trying to create, things will change.
Access Bank has 6.5 million account holders. We have most of the corporate accounts. Access Bank being the highest in the corporate account leadership, of course, the process is growing significantly. Today, we are one of Nigeria’s biggest corporate banks, I don’t think anybody will doubt that.
Presently, there are institutions of a similar pedigree like Barclays, HSBC etc. These are banks that dominate the entire value chain that they operate, and our example in Nigeria is First Bank. Some get there by virtue of instinct, First Bank has done creditably well, they are the first, but you know it is not everybody who started earlier could get to where First Bank is.
Cashless Lagos is a deciding factor in which transacted volumes are moving from the traditional way of banking you used to know, not that cash is not there, or that cheques are not there. If you look at the growth of payments movements, cash and cheques and so on, are growing at a regular rate. The other payment methods are growing rapidly. It is obvious that the time will come when automated payments system will dominate transactions.
The focus of this presentation is to tell you about our direction, with respect to retail and SME, because that is the new Bank. In about 60 days, we are going to launch a solution that will allow you to have a company, if they say for example, you want to link all the balances with all your accounts, imagine you are into newspaper business and you have 10 bank accounts; from these accounts, customers are paying money from the sale of newspaper and you say everyday you want to leave a balance of only N1 million in those bank accounts and you want to move any amount over N1million to your major account.
In 60 days time, Access Bank will launch a solution that will allow you to from your computer, take money out of all your bank accounts and consolidate in one without paying an extra fee. You will have to give the instruction from day one, that is how this thing is done in the world today, this is another first from the bank.
What our plan says is that by 2015, we are going to be the world’s most African bank, a multi-channel bank. We want to move from being Nigeria’s corporate bank leader and by 2015, target being a high performing Nigerian diversified banking leader. inclusive banking strategy projected the bank as the national champion for women bank. Specifically, we have 2.6 million female customers existing.
Is the concept of monetary policy tightening realistic?
You see, democracy is good for the growth of the banking sector in Nigeria. Events in the past 10 years have assisted the fiscal and monetary stability of the country, thus leading to growth in the financial sector because we have functioning institutions that require more financial system focus. I do not see anything in the next 10 years that will be fundamentally different from the current monetary policy perspective. Things should be normal as it has been over the past 10 to 15 years.
There is a difficult side also of democracy. On the difficult side, we are talking about the proper functioning of government so that government does not spend beyond its limit, and when government spends, that functioning is in the best interest of the economy and the public, as far as government is spending from taxes and whatever we have. We can ensure that government at least knows that people are watching and people will see, loudly and sharply that things are not going well.
We also operate in some African countries, we can see how democracy impacts on the banks in those countries. So we have good macro-economic stability over the past 13 years, but that has been eroded by the poor commodity prices.
Monetary policy tightening means you have to raise interest rate to make your currency attractive vis-a-vis the dollar. What is happening is that other currencies are becoming more attractive like the US dollar, pound sterling, the euro among others, in this regard; people’s observation is that the economy is going to be fixed. So, there are people who are going back to invest in properties in the US. Property prices are going up in the US and in Europe again, etc. So the only thing the central bank of Nigeria has to do today is to tighten our economy if not, our economy is going to be hammered just the same way as Britain’s.
Why is it important that the CBN doesn’t let our currency get hammered?
Over the past 20 years, every time the Nigerian currency got hammered, a banking crisis follows. This, of course, leads to the devaluation of the currency caused by three major reasons; Nigeria is solely dependent on oil as source of foreign exchange, it monetises this foreign currency through constitutional requirement that the nation’s foreign currency go into one account and the three arms of government share it and because Nigeria is not manufacturing locally, it is significantly import-dependent and any currency depreciation will affect the cost of goods and services in Nigeria.
So when people argue that when you devalue the naira, usually it is good for export, I begin to wonder on such postulation. That can be obtainable when you are manufacturing and have a diversified economy which Nigeria does not have.
Unfortunately, when this happens, the economy will be in a trauma which could lead to unemployment. The CBN knows this and it is more focused on price stability and financial system stability. These are challenges if not properly handled, are bound to cause another banking crisis. Do you think we are ready for another banking crisis so soon?
I guess it is too early. So, when you are between the devil and the deep blue sea, what do you do? You enter the sea because I do not want us to dine with the devil. The CBN and its leadership believe in real sector. So when you see it come up with policies contrary to their area of focus, then you know that their challenges are significant, I believe that, and it is a reality. However, by God’s grace, I believe that all these will become a thing of the past in terms of what is happening globally. Business will resume as normal all things being equal.
Why is it that customers save at 3% and banks lend at 22%?
Not all bank customers save at 3 per cent, there are several more people who save at 10 and 11 per cent, that is number one. Secondly, not all people borrow at 22 per cent, there are several who borrow at 12 per cent. Recently, we shared statistics from all the banks with CBN on average cost of funds, and it will interest you to know that the average cost of funds across all Nigerian banks is 11 to 12 per cent. For the first tier banks such as Access, First Bank, GTbank, among others, the average cost of funds range within three and half to four per cent.
For the second tier, the average cost of funds range between 6 to 8 per cent, while for the third tier, the average cost of funds range between 8 to 13 per cent. Now for the first tier, our average lending rate is 14 per cent and we have about 9 per cent left. When you came here, you saw about four generators backing one another, we maintain our multi-channel system and other infrastructure. In addition, the cost of running a bank branch include two generato
rs, two AK47 rifles, these are the realities. These are the things that make interest rate to be high in Nigeria
In recent times, it is said that Access Bank customers are not happy with the bank over charges, what is your take on that?
One thing that should be clear is that we put our customers at the centre of our business. There is nothing a customer is charged for that is not documented. Internationally, there are conditions attached to every account and different charges because there is cost in running an account there. But because we know the problem here in Nigeria and Africa, so also the reputation risk issue, we have put in place professionals to look into customer service, so if a customer arrives with an issue, it will be resolved immediately, not only that, we initiated peace champions where 99 per cent of issues are resolved in favour of the bank’s customers.
It is a standard thing in retail banking that some things happen, but the most important thing is that when a customer writes us, we ensure that the issue is resolved immediately, and I must attribute this to the existence of effective customer relationship management that we have on ground. Whenever our contact centre is called, we respond promptly.
I think in Nigeria, we have an edge over our competitors. Also having a multi-channel banking approach, you need to upgrade and within that context, we think we are reliable. However, business in Africa comes with its own challenge, we have a functioning credit card that you travel with all over the world with 99 per cent assurance.
To make it cheap for people, we have a centre in Egypt where our coordinator works from. But the recent crisis in Egypt forced us to move it to London, you can imagine what we have to pass through everyday to ensure our customers are satisfied. More over, at the back of the card, there is a number of our contact centre which is situated in Lagos and can be reached from every part of the world. We also have a good number of professionals who work round the clock to attend to customers’ needs.
Is it true that entrepreneurs do not have access to money in your bank?
Truth is, you cannot satisfy everybody. Nonetheless, we came out with a product program for 13 sectors and once you are in that sector, there is a product unit to basically approve your facility as quickly as possible. Supposing you are in education, hospitality, travel, and so on, you don’t need to talk to us, there is a product program unit which will screen you immediately and give you approval or rejection depending on what is required.
We know that obviously, this is good initiative but it has to be managed with care so as not to increase non-performing loans. Those product programs are designed to support entrepreneurs who are deserving of our support. So that is how it works, if you have an application just go through that process and you are there.
How do you intend to improve in your customer relationship?
First of all, we create a starting point that our belief is treating our customers fairly has to be a way of life to all Access Bank staff, this is a corporate culture, people have to attest to this on annual basis. Normally, there are things to do to ensure that customers at every bank are treated equally, so treating our customers fairly, to us, is a way of life.
However, we have gone beyond that to carry out research work on Nigeria, our population, and we ask this question afterwards – what do these our customers really need? What do we have to do to satisfy them? When we had a small client base, it was easy compared to now that we have about 6.5 million, perhaps 20 to 30 million, and we have put in lots of resources in that segmentation and it helps us to create things that will meet with the different needs of our different customers.
Now out of all of that, we told ourselves that to do what we really need to do, we have to create to ourselves a brand new customer experience, as a result of that, we invested lots of time in studies, tools, visiting international markets, asking ourselves what can we do differently to lift up the over all customer experience.
In 2001, I used a book called Buy out, it is a book you cannot put down once you start reading it, believe it or not, this book has altered the banking landscape in Nigeria and what triggered Access Bank in the aspect of risk and the understanding of what we have to do. But I will tell you something, there is a new story in town, there is a book called Outside in which is basically about creating a brand new customer experience and because we are customer inclined people, we have gone through the book and we are convinced that this will cause a new revolution as far as customer service is concerned in this country, not only customer service but customer experience.
We have come out with about 200 initiatives and we are going to alter how people understand banking in this country and when your children come out of school to work with Access Bank, the experience will be equivalent to international standard.
I spoke to you initially about our multi-channel system on how to see and understand the transaction that is going on online, because of this, we created 24-hour multiple contact centres which means Access Bank does not sleep, you will be able to do anything through our e-practice, call our contact centres and get things done. One of the things that makes us proud is that we run an integrated contact centre that is multilingual, and also on the social media.
To crown this, I mentioned to you what a license does to a bank and it is a privilege to have one. Our promise as a bank is in three faces namely – speed, security and service. And what makes it a privilege is that people’s hard-earned income is kept in a place that there is security, our promise about speed is largely around transaction, it’s all about getting to the customers.