By Abiodun Obisesan.
With the rapidly changing face of 21st Century business landscape, one of Nigeria’s leading financial institutions, Diamond Bank has adopted new strategies to boost consumer confidence
A recent Economist Intelligence Unit report on Africa, considers two scenarios for the growth of the African banking sector. In the conservative scenario, driven exclusively by economic expansion, the report projects that by 2020, the banking industry in 16 key African economies will boost its financial assets by 178% to $98bn. In the more likely scenario, driven by economic growth and financial development, assets could expand by 248% to $1.37 trillion.
Given that many banking products are commodities vulnerable to significant price competition and replication, cross-selling strategies based on customer relationships trump a product-centric approach to selling. Strategic customer insights and a well-developed segmentation strategy create a significant competitive advantage.
Against the backdrop of higher GDP growth rates, fast-growing populations, and a rising middle class, retail banks in sub-Saharan Africa are poised to grow significantly. This must have influenced the drive by a leading financial player in Nigeria, Diamond Bank, to extensively explore the country’s retail market. In the words of Ayona Aguele Trimnell, The Head of Corporate Communication in Diamond Bank, ‘‘Our mainstay presently is retail banking, and we want to take ownership of the retail banking market in the financial institution; So that we can be more accessible to everybody’’.
With regulatory and political interventions changing the market structure and consumer loyalty and trust at all-time lows, Diamond Bank seems to have adapted new strategies in striving to restore consumer confidence. This is why consumer protections, customer complaints and strategic approaches to loss mitigation are the core retail banking.
However, it must be stated that, lack of uniform national identification system, high cost of doing business and the dearth of skilled human capital, among others, are some of the daunting challenges impeding the development of inclusive retail banking in Nigeria. Trimnell feels these challenges are not insurmountable. “Diamond Bank is a serious player in the industry. We just want to tell consumers that we have the right products and services, the right people and we are serious about doing business. We think we have differentiation in terms of our products and services, and we realise we need to inform customers this truth”.
Recounting some of the bank’s strategic feats within the financial sector, Trimnell stressed that Diamond Bank is a trend setter in Nigeria. “Looking back, when you talk about the N100 charges for ATM withdrawal, Diamond Bank was the first bank that stopped charges. We stopped it even before CBN came along and made it mandatory for all other banks not to undertake such charges. If you look at the first Nigerian credit card, it is from the stable of Diamond Bank, and it is still the only one till date. There are lots of trailblazing steps Diamond Bank has taken in the industry that has led Nigerians to see us as a serious bank that puts the customers first”.
The Retail business unit of the Bank is designed to explore available opportunities in the key economic sectors: wholesale and retail trading; oil and gas industries; crop production; road transport; financial institutions; building and construction; telecommunications, educational institutions; farming; public administration, hotels and restaurants; non-profit organisations; tourism; and manufacturing among others.
With a wide range of economic and financial statutory duties which retail banking presupposes, top-performing banks can also seize advantage of the Local Content Bill to grow the business of our SMEs as well as leveraging the funds provided by CBN to support the agricultural business.
Retail banking is growing steadily now. It is when a bank executes transactions directly with consumers, rather than corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards. The term is generally used to distinguish these banking services from investment banking, commercial banking or wholesale banking. It may also be used to refer to a division of a bank dealing with retail customers and can also be termed as Personal Banking services.