CEM REPORT, FINANCE | Trust between customers and the financial sector in Nigeria has been identified a major barrier to deal with by Banks in marketing financial products. Consumers believe the financial institutions are out to take advantage of them and do not bear their interest.
Yomi Badejo-Okunsanya, Group MD, CMC Connect said this while delivering the keynote address at the Association of Corporate Affairs Managers of Banks (ACAMB), 2nd National Stakeholders Conference, themed “Marketing Financial Services in Dynamic Times” held in Lagos.
According to Yomi Badejo-Okunsanya, the high profit figures posted annually by the banks which goes in opposite with the financial state of the banked population seems to underscore this notion of distrust.
“Many people do not trust their financial institutions. They believe that the financial institutions especially the traditional banks are taking advantage of them or are not operating in their own interest”; he said.
He continued by saying that the financial sector in Nigeria is plagued by several challenges that have further strengthened the curve of trust against the institutions.
Elaborately, Okunsanya among others, spoke about high default rate which is increasingly becoming worrisome as “a significant number of borrowers are unable to pay loans, meet financial obligations to lenders or financial institutions.”
He added that low disposable income and high inflation rate have further left many individuals and households with very little after “covering essential expenses like food, housing and utilities.” in essence, the purchasing power of bank customers is continually weakened.
“High incidence of fraud and cybercrime, this is another challenge especially online criminal activities like scams data breaches and identity theft. This surge in fraudulent activities including fraud during the Covid-19 pandemic erodes trust in financial services and the economic and financial security, adds to the challenges of marketing financial products.”
Furthermore, low marketing budgets, restricted advertising promotional efforts and outreach for financial products and services are other factors financial institutions contend with to market financial services.
The marketing veteran, attributed the lack of trust to poor customer service and transparency, noting that lack of trust impedes financial inclusion and digital service adaptation.
He recalled a study by PWC which reveals “that only 39 per cent of Nigerians trust their banks, in contrast to the global average of 56 per cent.”
He stressed that rebuilding trust is necessary if the financial institutions intend to bank more Nigerians