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Five banks refund N36bn to customers in three years

The Citizen by The Citizen
August 1 2021
in Business
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Five banks refund N36bn to customers in three years

In line with the guidelines of the Central Bank of Nigeria (CBN) on the resolution of customers’ complaints, relief seems to be on the way of aggrieved customers of commercial banks in the country as the total budget of the five Tier-1 banks for the settlement of customers’ complaints within three years (2018, 2019, 2020) hit N36,030,416,012.27.

The affected banks are Guaranty Trust Bank (GTBank) Plc, Zenith Bank Plc, Access Bank Plc, First Bank Limited, and UBA Plc.

The data collected from their respective financial statements also showed a progressive rise in the number of complaints received by the five banks within the period under review.

In, 2018 for instance, the total number of complaints received by the five banks was 1,726,016.

For the 2019 operating year, the five banks received a total of 2,325,791 complaints, while 2,721,270 was the number of complaints received in 2020, bringing the total complaints received within three years to 6,773,076.

Within the period under review, the amount of money set aside for the setllement of customers’complaints by the five Tier-1 banks increased by four percent, rising from N6,257,474,043.53 in 2018 to N16,370,852,265.37 earmarked by the five-tier 1 banks in 2020.

Further analysis of the bank’s budget for complaints’ resolution showed that Access Bank Plc, which set aside N63,351,320 in 2018, earmarked N3,954,787,501 and N3,954,787,501 for 2019 and 2020 financial years, respectively.

Similarly, N326,328 was refunded to customers by GTBank Plc in 2018. The figure came down to N282,014 and N105,000 in 2019 and 2020, respectively.

In the case of UBA Plc, N403,877 was paid out as a refund to customers in 2018. In 2019 and 2020, the bank refunded its customers N22,699 and N3,725, respectively.

In 2018, Zenith Bank refunded its customers to the tune of N800,131,355 whereas it paid less in the following year as the figure came down to N421,465,468. However, the figure went up in 2020 when the bank paid N3,722,876,538 as a refund to its customers.

In this category, First Bank emerged as the bank with the highest budget for customers refund, as it disbursed N5,393,261,263.53; N9,025,438,907.37 and N9,397,751,386.37 for 2018, 2019 and 2020 respectively.

However, banking industry watchers described the frequency of customers refund as an indication of timely response of banks to their customers’ complaints although some argued that banks were merely paying for their inefficiency by setting aside a huge amount of money to settle customers since the need for refund wouldn’t have arisen if banks had done their homework very well.

Speaking with our correspondent, Executive Director, Cordros Capital Limited, Mr. Femi Ademola said banks’ response to customers’ complaints is a good omen to the industry given the attendant rise in customers’ confidence, which the bank’s response would engender.

He maintained, however, that the banks don’t have anywhere to hide anymore given the strict monitoring and supervision of the Central Bank of Nigeria.

“Any bank that defaults in this regard already knows it has the apex bank to contend with,” he said, adding that many banks see the settlement of complaints as a way to market themselves as responsible institutions.

He said some customers may not be impressed with the huge amount of money set aside for settlement because some of the complaints are time-wasting and avoidable.

“Things have changed now as many customers have resorted to mounting serious media campaigns against any defaulting banks. Many customers now rush to Twitter to call out any of the erring financial institutions and since banks wouldn’t want to be trolled on the social media, they have to make provisions for a quick refund,” he said.

Banks Strategies to Reduce Customers’ Complaints

Meanwhile, some of the banks said efforts are being put in place to attend swiftly to customers’ complaints as competition favours banks with quality service.

For instance, the management of Access Bank said it maintains complaints channels to facilitate a seamless complaint and feedback process.

According to the bank, various channels have been provided for the use of its customers and these include a 24-hour contact centre with feedback through emails, telephone, SMS, Livechat, Social Media, etc; – Feedback portal on the Bank’s website; – Customer service desks in over 500 branches and toll-free telephone lines to the office of the Group Managing Director in the banking halls of key branches.

The bank also encourages correspondence from its customers and it also has the Ombudsman Desk

On its part, the management of First Bank has pledged to continue to leverage and improve the Customer Relationship Management (CRM) tool, Microsoft Dynamics 365 to collate Bank-wide complaints, track complaints, investigate the root cause analysis and resolution, and manage customer expectations.

In 2020, the bank introduced some self-service capabilities, notably the Interactive Voice Response at the contact centre to resolve basic requests and certain complaint types without recourse to a customer care agent.

The bank said this improved its business processes in addition to the continuous e-training and development carried out bank-wide to bridge the knowledge gap and improve complaints management during the unprecedented year. This was in addition to proactive measures taken in conjunction with relevant supervisors to avoid the expiration of agreed resolution timelines.

According to the management of UBA Plc, the bank seeks to proactively exceed its customers’ expectations at each of its multiple contact points with the bank users.

“In line with the Bank’s focus, our 24/7 Customer Fulfilment Centre (CFC) has been fully empowered, fortified, and repositioned to offer seamless and unparalleled service excellence to all UBA group customers and prospects alike,” the bank said in its 2020 annual report.

The management of GTBank explained that the complaints and feedback structure put in place ensures the prompt resolution of customers’ complaints.

“The Complaints Unit of the Bank is charged with the responsibility for the receipt, prompt investigation, and resolution of customers’ complaints. It also serves as the liaison between the Bank and its customers as well as regulatory authorities. Complaints received are given a unique identifier number for tracking purposes, acknowledged, and addressed promptly.

“Where a resolution can be provided immediately, the customer is provided with feedback, if not, the issue raised is referred to the appropriate team in the Bank for prompt resolution,” the bank stated.

Poor Services

Almost daily, Nigerian bank customers have one complaint or the other regarding their banking experience. Greater number of consumer complaints about banking services relate to excess charges, Automatic Teller Machines (ATMs) issues, Point of Sale (PoS), Bank Verification Number (BVN), cheque-related issues, and fraud among others.

The coming of the Covid-19 pandemic, which forced banks to review their operations, has also increased complaints about the associated delays in banks.

In their bid to comply with safety protocols put in place by the government, bank customers no longer enjoy the freedom of entering into banking halls as they used to, a development that has increased demand for online transactions.

However, the reality is that some banks’ ATM galleries are always packed full with people spending hours on end just to withdraw cash from the machines.

However, complaints about issues like dispense errors, controversial deductions are among issues customers are battling with.

It was in response to these complaints that the Central Bank of Nigeria created the Consumer Protection Department (CPD) in 2012 in furtherance of one of its core mandates of promoting a sound financial system. The CPD was established to develop and implement an effective consumer protection framework that would promote consumer confidence in the financial system.

The Department performs three primary functions: Complaints Management: This involves resolving consumer complaints against financial institutions under the purview of the CBN; Market Conduct & Development: This is to entrench fair and responsible market conduct amongst the financial institutions concerning their customers; Consumer Education/Financial Literacy: This is to promote and disseminate financial education and awareness amongst existing and prospective consumers for the enhancement of their economic well-being.

According to the apex bank major expected impact is the entrenchment of fair and responsible business conduct amongst financial service providers as well as the existence of a consultation and feedback mechanism to periodically determine the extent of consumer satisfaction.

Another expected impact is a general improvement in financial capability as a result of the various financial literacy programmes which would ultimately increase participation. – Thisday.

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