Brand Loyalty in Banking: What Keeps Customers Coming Back

Raheem Akingbolu writes on the Nigerian banking industry and how bank-customer relationship is driving growth and market influence.

Every business is built with one end in mind: customers who keep coming back. Each initiative, from the design of the building to the way a complaint is handled, is meant to turn first-time buyers into regulars, and regulars into advocates who bring in others. The best outcome is a customer so satisfied that they never go looking for what the competition offers.

Quick service restaurants have perfected this. From the architecture of the outlets to the look and taste of the food and the manner of service, they create a uniform experience that keeps traffic flowing, from existing customers and from the new ones those customers draw in.
Banking is no different. With technology now a universal minimum standard, banks have never relented in this game. They have deepened their branding to retain and increase traffic, because technology has not been the only differentiator.

Banks have begun to behave much like QSRs in look and feel. They use their physical presence to set themselves apart: the design of their buildings, their banking halls, ATM sounds and uniformed tellers. When you walk into a bank and are welcomed by smiling, uniformed security men and tellers, some unique differentiation messages are immediately at work. You no longer spend endless hours in the queue because technology has reduced waiting time. You are also made comfortable for the little time you do wait, by service personnel who will not miss the opportunity to shower you with apologies for any delay.

That is how it has become, especially with the new generation banks, which adopted the latest banking technology, modern branding and customer service systems to win the fierce war with competition.
But this has not shut out the older generation banks, which have also retooled and adopted the technologies that once made the newer banks appear to have an edge.
Older institutions still have a great deal going for them. Banks such as Union Bank and First Bank remain in business, strong and competitive, thanks to the tangible and intangible values they have accumulated over decades of consistent service to customers. Some of these values include:
Generational existence
First Bank and Union Bank have been in business for more than 100 years. This means at least three generations have relied on them for their financial services. Thousands of entrepreneurial families have built their businesses with these so-called old banks and would not take their business elsewhere, and their loyalty helps sustain these banks.
Wema Bank, not as old as the other two, has also put many years behind its name. Established in 1945, it is another older generation bank keeping up with the Joneses of the banking business in the country. Wema owns one of the most popular digital banking platforms in Nigeria, called ALAT.

Like Wema Bank, Union Bank and First Bank have retooled their systems and processes by adopting and acquiring today’s technologies and hiring younger workers with today’s orientation, education and mindset. These changes have made the difference between old and new generation banks a matter of nomenclature rather than of banking processes.
A level playing field
All the banks have equal access to the human resources market. They poach manpower from one another, go to the same institutions for training and are exposed to similar modules and experts in the fields they need.

The technology market, as well as the fintech space, is also essentially the same. There are more than 40 banks in operation in Nigeria today, but the banking software they run on can be counted on one’s fingers. Finacle, the market leader, is deployed by Guaranty Trust Bank, First Bank, United Bank for Africa and Wema Bank, among others. FLEXCUBE is used by Access Bank, Zenith Bank, Union Bank and Ecobank, among others. There are others, such as Temenos, used by Fidelity Bank, and local solutions such as SeaBaas, deployed by Keystone Bank, as well as a few proprietary solutions used mostly by the digital banking firms across the country.

In the end, what matters is how much customer loyalty can be built with these and other technologies. What is being done to ensure that customers keep coming back from year to year?
A family that never left
A recent survey found that Union Bank has customers who have stayed with it for more than 60 years. One of them, Alhaji Ali Madugu, was reported to have said that his family’s relationship with the bank began with his grandfather, who was in the trans-Saharan trade.
“My grandfather started this relationship with Union Bank in the 1950s. Then, the bank was Barclays Bank. My grandfather was involved in the trans-Saharan trade during those days and, at a point, he was encouraged to open an account with Barclays Bank. In the early 1970s, my father opened his own account with the bank, and it became a family tradition that once any one of us attains the age of five, an account is opened for the person in Union Bank, into which money is paid until the person reaches the age of 18 and takes control of the account,” Alhaji Madugu was quoted as saying.

He continued: “It has been decades of unbroken relationship between our family and Union Bank. There were not as many banks as we have today, and moreover, once you are getting what you want from your bank, there is no reason to run multiple accounts in different banks. Our grandfather developed this relationship and it has been working well for us.”
“My father, for instance, had a good relationship with the bank up to the executive management level. At a time, my father’s business began to experience challenges in turnaround, owing to logistics issues. We were late to the market many times because trucks were not available. My father applied for a loan to buy trucks. He met one of the officials, a white man, who wanted to know if my father wanted to veer into logistics or remain in the business he was originally in. The man told him it was either he remained in the original business or he started trucking. My father listened to him, and that was why he avoided investing in the purchase of trucks. For us, the relationship transcended the normal banking business that people know, to such things as business advisory and so on.”

There are many people like Alhaji Madugu among bank customers in Nigeria who look beyond branding liveries for their banking services. Once a bank is able to solve your problem satisfactorily, there is no reason to look for another.
Loyalty in the age of app
There are, however, others whose needs exist mainly in the digital space. Those who anchor their banking experience on the app store may have different expectations from Alhaji Madugu. They belong to a generation that may never wish to visit a banking hall and that trusts all its financial business to apps downloaded onto handheld devices.

Brand loyalty has many anchors. Some anchor theirs on age, others on excellent service. Some build loyalty on personal friendships, while others remain loyal for as long as the brand is amenable to technology, like the young person who searches for everything on the apps on his phone. Others follow the crowd, gravitating to banks that appear popular, prestigious or favoured by people they see as more knowledgeable or more affluent.

What loyalty comes down to
Technology, talent and training are now available to every bank on roughly equal terms. A customer can get a good app, a smiling teller and short queues almost anywhere. What a bank cannot easily copy is a record of being useful when it mattered.

That is what kept the Madugu family with Union Bank for generations: a relationship that went beyond transactions into advice that shaped the family business. Younger customers who live on their phones will measure loyalty differently, by speed, reliability and ease. But the question underneath is the same for both: when I had a problem, did this bank solve it?

Brand loyalty, in the end, is not built by buildings, uniforms or software. It is built one solved problem at a time.