Access Bank Positions for Superior Customer Experience, Improved Efficiency

Through its aggressive expansion drive, Access Bank Plc has grown from humble beginnings to become one of the biggest banks in Africa. It has secured a broad geographic footprint across the continent and is spreading its tentacles to the rest of the world, with superior customer experience and improved efficiency as its hallmarks, writes Chima Obinna

The COVID-19 pandemic is expected to fundamentally change the face of banking globally. As a result of this, forward-thinking financial institutions are already taking steps to position themselves to deliver superior customer experience and improve their efficiency, attributes Access Bank has in its DNA.

According to a recent report by one of the leading global professional services firms, PwC, as the economic fallout of the virus spreads, banks now find themselves juggling some big priorities that require concrete steps to reposition now while also recalibrating for the future. PwC noted that innovative financial institutions are already working to keep their distribution channels open, despite social distancing advice and supervisory and compliance functions that were never designed for remote work.

“They’re trying to manage revenue and customer expectations and they need to keep an eye on strategy and brand issues that will define their future, as market forces and customer behaviour potentially change coming out of this crisis,” it added.

All these have been the focus of Access Bank Plc, which last year successfully consummated a merger between the now defunct Diamond Bank and emerged as the largest bank in the country, in terms of customer base and an extensive retail footprint.

Access Bank is a full service commercial bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 29 million customers. Due to the merger, the bank employs 28,000 thousand people in its operations in Nigeria, Sub Saharan Africa and the United Kingdom, with representative offices in China, Lebanon, India and the UAE.

Clearly, one thing the ravaging pandemic has revealed, according to Barclays boss, Jes Staley, is the fact that having thousands of bank workers in big, expensive city offices, “may be a thing of the past.”

Staley, pointed out that about 70,000 of Barclays’ staff worldwide are presently working from home due to coronavirus lockdown measures, leading the bank to rethink its long term strategy.

This was exactly what Access Bank Chief Executive Officer, Mr. Herbert Wigwe, was trying to communicate to staff during a recent Employee Town Hall Meeting via Microsoft Teams. Unfortunately, the video which went viral was misinterpreted that the bank was planning to sack 75 per cent of its workforce as well as close over 300 branches. This is not accurate, and since the bank finalised its merger process, it has deliberately avoided to rationalise its staff and branches, even in places where it has branches that are closely located.

The bank has since clarified its position on the matter. According to its Company Secretary, Mr. Sunday Ekwochi, the closure of a bank branch is an action that requires the approval of the Central Bank of Nigeria (CBN). According to the bank, it has not applied for nor obtained the approval of CBN for the closure of its branches as widely speculated.

“The bank has only suspended operations in some branches following the directive by the CBN. At the onset of the COVID-19 pandemic lockdown, we suspended in-branch operations at different locations as directed by the CBN and in line with business continuity plans at vulnerable spots, while we continued to provide services through our alternative digital platforms.

“In line with the phased re-opening of the economy effective May 4, following the Presidential directives, we will be resuming in-branch services in some of our affected branches in a programmed manner to ensure the health and safety of our employees and customers.

“This is also necessary to provide relevant contingency should there be any incident arising from the pandemic.

“We deny in its entirety the baseless and twisted speculation that the bank is sacking 75 per cent of its workforce,” he explained in a notice to the Nigerian Stock Exchange.

The bank noted that based on the impact of the COVID-19 pandemic, not all its branches would be fully open for in-branch services until later in the year.

“This has made it impossible for many of our outsourced workers to perform duties as usual. We have commenced engagement with various stakeholders with a view to ensuring that they provide the relevant services and optimum manpower as may be required by the bank on an on-going basis,” it added.

Industry sources also said the fact that Wigwe, who also announced a 40 per cent pay cut for himself could convene a meeting with staff on the matter showed his level of transparency.

Enhancing Customer Experience

As part of its commitment to increase access to banking services in communities across the country, Access Bank last week announced plans to open 10 ‘Access CLOSA’ outlets in six cities in Nigeria. The CLOSA branches are Access Bank’s Branded Cabins situated in metropolitan areas offering banking services to its customers.

The bank described the move as a timely intervention to mitigate the effect of restrictions caused by the COVID-19 pandemic. It stated that the branches would be located not less than three kilometres or more than 20 kilometres from the nearest existing Access Bank branch, and would offer banking services such as cash deposits and cash withdrawals (no 3rd party withdrawals), customer on-boarding, funds transfer subject to a limit of N150,000, BVN enrolment, card issuance, card activation, cheque deposit, bills payment, and ATM services.

Speaking about the initiative, Wigwe said: “Access CLOSA was introduced last year, and now, the peculiarities of the coronavirus has made it even more important to bring banking services closer to the people.

“Access Bank understands that the risk of transmission is higher in congested spaces and to mitigate this risk, we will be commissioning 10 more banking outlets to serve the needs of our esteemed customers.

“The CLOSA banking service is not being introduced to replace our existing branches, but rather aid the Bank in delivering on its commitment to offer best-in-class service to our customers. We are not aloof to the threat of the COVID-19 pandemic, and whilst we will do all that is required to ensure branches remain safe for our employees and customers in line with the protocol advised by the health authorities, we urge our customers to leverage on our digital channels in carrying out transactions.”

Managed by Access Bank and agency banking representatives, Access CLOSA branches are set to begin operations in Rivers, Lagos, Kogi, Kaduna, Bayelsa, Delta and Anambra states.

Business Expansion

Access Bank has continued to expand its footprints, intensifying domestic and international operations. In 2018, the bank launched its ‘Africa’s Gateway to the World’ campaign – a strategic initiative which aims to promote ‘access to finance’ in Africa and beyond. It started this campaign by leveraging technology to offer its consumers new products. A good example was its partnership with Remita, which has offered PayDay loans to over five million external customers. The product was available on the web, through the bank’s USSD code, via ATMs, Access Mobile, WhatsApp Banking, and QuickBucks – its instant loan disbursal application.

Staying true to its goal of becoming Africa’s gateway to the world, Access Bank started the year 2020 with a major announcement, acquiring a majority stake in Kenya-based Transnational Bank (TNB). Through this, the bank plans to build on TNB’s existing expertise in agricultural financing while leveraging its resources to improve TNB’s other business segments. Also, Wigwe recently shared his plans to open operations in four additional African countries within the year.

Access Bank has also embraced digital technology to propel both its sustainability targets and its African gateway strategic drive. This is evident in the bank’s partnership with the Africa Fintech Foundry (AFF), aimed at nurturing the next generation of cutting-edge financial-technology firms.

The AFF is a pan-African accelerator designed to find and invest in start-ups that implement a global viewpoint while still focusing product offerings on Africa. Access Bank plans to harness the very best Nigeria has to offer, working closely with them to make Nigeria a retail banking powerhouse. The bank has also continued to develop products to support digital payments across Africa.

Remarkable Performance

Nine months after the merger process, Access Bank posted an impressive performance in 2019 with gross earnings rising 26 per cent to N667 billion, up from N528 billion in 2018. Interest and non-interest income contributed 81 per cent and 19 per cent respectively. Interest Income grew by 41 per cent to N536.8 billion in 2019, as against N380.9 billion in 2018, boosted by the growing efficiency of the bank’s enlarged balance sheet.

However, non-interest income decreased by 12 per cent to N129.8 billion in 2019 compared with N138 billion in 2018, following the bank’s strategic intent to grow income sustainably through traditional banking. Operating income improved by 25 per cent from N311.807 billion to N389.338 billion in 2019.

A further analysis of the numbers showed that asset base grew by 44 per cent to N7.15 trillion as at December 2019 from N4.95 trillion in 2018. Customer deposits increased by 66 per cent to N4.26 trillion in 2019, compared with N2.57 trillion in 2018. Non-performing loan stood at 5.8 per cent, down from 10 per cent in 2018.

The positive performance continued in the first half of 2020 as Access Bank recorded gross earnings of N211.12 billion in the first quarter (Q1) ended March 31, 2020. This represented an increase of 31.85 per cent above the N160.12 billion posted in the corresponding period of 2019. Net interest income rose from N56.838 billion to N72.212 billion, while non-fee and commission income improved from N13.068 billion to N22.998 billion.

Profit before tax (PBT) increased by 2.64 per cent from N45.10 billion to N46.29 billion in Q1 2020, while profit after tax settled at N40.92 billion in the period under review, from N41.14 billion in Q1 2019.

A further analysis of the results showed that net loans and advances increased by 2.61 per cent to N3.14 trillion from N3.06 trillion in full year (FY) ended 2019, while customer deposits rose by 4.7 per cent to N4.45 trillion from N4.25 trillion in FY 2019. Total assets expanded by 1.87 per cent to N7.28 trillion from N7.14 trillion in FY 2019.

Wigwe added: “Our resolve is to ensure that our customers have best in speed, service and security. We projected merger synergies of N153.9 billion (cost and revenue) over three years. Thus far, we have recorded synergies totalling N42.8 million in nine months, of which N28.8 million is recoveries.

“In 2020, we expect to realise significant cost synergies, which will substantially cut down our cost and boost profitability. Being a systemically important Nigerian bank, we are aware that sustainable returns can only come from a sustainable and resilient business model. As such, our intent to embed resilience at the core of our financing activity is further strengthened, as we journey together to building a bank that is more than banking,” he said.

As financial institutions prepare to face the disruptions created by the COVID-19 pandemic, experts advice that banks focus on vastly improving customer experience, value creation for customers as well as delivering efficiency. In this regard, Access Bank has a head start.