Banks are taking a closer look at grassroots banking, focusing on the retail segment of the market where the size of the population presents big business opportunities. The Head of Retail Banking at Skye Bank Plc, Nkolika Okoli, says the lender is committed to deepening its retail segment of the market, including rewarding loyal customers in its ongoing ‘Reach for the Skye’ reward scheme. She speaks on the lender’s passion for customer satisfaction and financial inclusion, COLLINS NWEZE reports.
Banks with eye on the future are focusing on retail banking segment of the market, which is where the future of the industry seems to lie.
For Skye Bank’s Head of Retail Banking, Nkolika Okoli, there is need to deepen the retail segment of the market, promote financial inclusion and reward loyal customers.
Speaking on the bank’s on going ‘Reach for the Skye’reward scheme, meant to reward loyal and committed customers, she said the programme, introduced in June last year, has enabled the lender grow its customer and deposits bases.
She explained that aside monthly cash rewards given to customers, the lender offers attractive monthly interest rates on savings products, as well as third party access through customised cheque books for its flagship savings accounts.
These, she added, give its customers convenience to carry out their banking transactions without having to visit the banking halls. For her, customers can also take advantage of the lender’s electronic and card services to carry out transactions anywhere and at anytime especially through their mobile phones.
On the impact of the reward scheme on the lender’s numbers, she said, the reward scheme has improved the banks’ deposit base-”not just for the two savings products involved in the scheme, but it has also impacted other savings products in our portfolio.
“However, the scheme is primarily targeted at promoting customer loyalty and driving financial inclusion. We are happy to see that we have created 36 millionaires in one year only.”
On the reward scheme, she said: “We don’t intend to change a winning formula, every month, customers with a minimum of N2, 000 in their savings accounts stand a chance to become one of three millionaires we would be rewarding. The monthly consolation prizes also remain, with four customers winning N250, 000 and 10 others wining N100,000.”
According to her, during the first anniversary celebration of the promo, the lender invited customers who had won all categories of its cash rewards to give testimonials on the impact of the prizes.
“A truck driver Job Abiona from our Ogudu branch used the money he won to purchase a new truck to improve his business. A retired civil servant/pensioner, Bashiru Adeyemi, from our City Hall branch also told us that his cash reward went into the completion of his personal home as well as the business endeavours of his children so he wasn’t the only one who benefited from the campaign, among others,” she said.
“The young people in this neighbourhood will grow up to associate this with Skye Bank. On steps to ensure wise investment of rewards, we offer financial advisory services, especially to the winners who request for it, to ensure that the funds are not spent frivolously.
“The reward is not open to all account holders. You have to own either a Skye Save Plus (generic Savings account) or Skye Ease (savings account for the under-banked with no means of identification). All that is needed to qualify is to open either of these accounts with N2, 000 while existing customers are required to fund their accounts with a minimum of N2,000 every month, to qualify.”
On customer loyalty, she said: “Customer loyalty is the tendency of customers’ to show their attachment or favour towards your brand/product. This is either due to satisfaction with the product/service or the convenience or rewards given by the organisation. This ongoing campaign is a strategy geared towards the sustenance of customer loyalty, which is also supported by a pleasant service experience across our platforms.
“In addition, our customers know that our emphasis on best in class technology enables them transact via mobile phones, online and other channels at their convenience.’’
Why retail banking?
On why lenders are going for retail banking, Okoli said that retail banking is the future of the Nigerian banking system. According to her, the country has a population of over 170 million people, and with 39.5 per cent of its population still financially excluded, retail banking presents an opportunity for banks.
Besides, retail deposits represent a stable source of funds for banks, unlike corporate funds which can be volatile. She said her bank is committed to ensuring that every Nigerian carries a Skye Bank cheque book or debit card in his/her pockets.
She said the bank is also committed to supporting small and medium enterprises (SMEs). “We have adopted a solution-based approach to lending to SMEs by tackling the challenges they have, which make people to view them as high risk, such as lack of collateral. In order to address this, working with International Finance Corporation (IFC) and launched the SME methodology loan that places less emphasis on tangible collateral, but on cash flows and the borrowers’ ability to repay,” she said.
This approach, she says, helps the lender assess a small business owners’ ability to generate enough cash-flow from its business to repay the loan and the lending decision is based on this. “To mitigate the risk of default owing to death or permanent disability, we incorporated credit life insurance into the lending framework,” she said.
Continuing, she said: “SMEs lack structures so we introduced support services like business name registration service, Sales book journal to help with record keeping, business seminars to train business owners on skills required to improve their productivity and long term performance. Our Consumer banking strategy is interwoven with our SME strategy as most individuals are either entrepreneurs or employed by entrepreneurs so we cannot neglect SMEs”.
Okoli insisted that agency banking and automation are the best way to reach the unbanked and under-banked within the economy. “No bank can be present in every nook and cranny of the country. It’s impossible. However, there are agents who can play a role in this regard. They live in these villages, towns and are recognised by the community and can assist with basic banking transactions, deposits and withdrawals, which customers want to carry out. We are partnering with some agents to reach more people,” she said.
On state of the economy
The banker said the decline in crude oil prices provides an opportunity for the government and the private sector to turn towards other areas that can also provide sustainable and stable sources of income to the country.
“Having been a mono-product economy for so long, other sectors suffered, so it is time to return to Agriculture, mining, real estate and other alternative sources of revenue. The fall in oil prices is a blessing in disguise as it will make us think outside the box and focus on other sources of revenue to grow our economy. It may not be ‘quick money’ like oil revenue, but will provide the stability our country requires,” he said.
On some of the challenges facing the industry, she said: “The recent Cap Gemini (who acquired Ernst & Young- EY) study on global retail banking indicates that only 50 per cent of customers will remain with their primary bank in the next six months. Further, only 15 per cent have trust and confidence in the banking industry. The implication of this is that bank customers have more choices in how, when and where they can do their banking. Switching banks can be easy and the engagement with one specific bank is no longer a life-long affair.
“So, my first challenge is building customer trust and loyalty. This is a daunting task due to the nature of financial service products which are intangible and hinged mostly on human beings so maintaining uniform standards is a huge challenge. To do this, we have to rely a lot on technology and staff engagement to ensure a pleasant service experience across all our service touch points.
“We also need to develop the right data and analytics approach to personalise our offerings. Only when we take care of the needs of our customers will they reward us with their loyalty. It’s a long term journey but we are on track.’’
On why women should be given more roles in the banking sector, she said: “The 21st century woman is shattering the glass ceiling. More and more women are assuming leadership positions in financial services and other sectors of the economy based on performance, so the Central Bank of Nigeria (CBN) regulation on greater inclusion of women in the boardroom is a step in the right direction which will help provide a level playing field for top professionals. In Nigeria, and all around the world, we have seen women turn around their organisations and impact positively on the society. Women are more loyal so organisations will do well to nurture and promote them”.
Okoli said there are many women bank chief executive officers who have performed excellently well. “There are lots of others heading departments, regions and branches and their records are evident for all to see.’’
Still on retail banking, she said: “If you know the history of Skye Bank and the banks that formed the institution like Afribank (Mainstreet Bank), Eko International Bank, Prudent Bank and others, you will understand that the institution has historically had a strong focus on retail banking over the last 50 years or more. The primary motive is to reward loyal customers and build a trusting relationship with them. Over time, the customers will reward us with their patronage.’’
Continuing, she said: “Afribank (Mainstreet Bank) was a typical retail bank and with focus on the same ideals it has been a seamless migration for those customers and prospects. We have been able to increase our branch spread and customer base as a result of the merger and we are doing our best to provide them with the same excellent services Skye bank has come to be known for.’’
On how she combines the job with family demands, she said: “Women are very good at multi-tasking so it feels natural that I can handle several tasks in the home and at the office with ease. From a more practical perspective, I adopt Stephen Coveys, “7 Habits of Highly Effective People” principles which presents an approach to being effective in attaining goals by aligning to what Covey calls character ethics. Moreover what I do now does not feel like work because it aligns with my passion and personal goals”.
