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Case study: Diamond Bank

Diamond Bank in Nigeria has been improving customer experience through all of its channels. It is now in the process of adding new payments services to its ATMs.

Nigeria is a market with huge potential for its banking industry. It has a population of almost 170 million, but there are perhaps 25 million bank accounts, believes Daniel Akumabor, head of the transaction and electronic banking division at Diamond Bank. Taking into account the people with multiple accounts, the banked population in Nigeria could be as little as ten per cent of the total, he states. On the industry side, the number of banks has come down in recent years, with the result that remaining banks are larger and better able to serve the country.

Diamond Bank serves as a case study for the growth potential of the Nigerian market. It became… continues (login/register to read).

Diamond Bank in Nigeria has been improving customer experience through all of its channels. It is now in the process of adding new payments services to its ATMs.

Nigeria is a market with huge potential for its banking industry. It has a population of almost 170 million, but there are perhaps 25 million bank accounts, believes Daniel Akumabor, head of the transaction and electronic banking division at Diamond Bank. Taking into account the people with multiple accounts, the banked population in Nigeria could be as little as ten per cent of the total, he states. On the industry side, the number of banks has come down in recent years, with the result that remaining banks are larger and better able to serve the country.

Diamond Bank serves as a case study for the growth potential of the Nigerian market. It became a universal bank in 2001 and was listed on the Nigerian Stock Exchange in 2005. That year, as Nigeria’s banking consolidation got underway, it merged with Lion Bank, after which it has started to focus on growing its retail banking business. ‘The growth potential is mind-boggling and the masses are receptive to banks that provide the right products,’ says Akumabor.

The bank is therefore being ‘anything but reactive’ as it looks to grow, and while it is increasing its physical presence, its customer number is growing faster. For 2013, the footprint of Diamond Bank grew by about ten per cent, but the customer base grew by 33 per cent, says Akumabor: ‘We are expanding our physical footprint, but it all comes back to the channels offering, and being able to leverage the same physical footprint for a much larger customer base at a high level of satisfaction.’

The key to Diamond Bank’s growth, says Akumabor, is the Bankworld multichannel solution from Ireland-based supplier, CR2. ‘A couple of years ago, before most banks made a focus on retail banking, we took the time to lay our core foundation. Key to doing that was getting onto the CR2 platform,’ he explains.

Mobile banking is taking off in Nigeria but internet banking is lagging behind, reflecting the third world infrastructure of the country. ATMs, however, are performing an important stopgap role. Akumabor believes that, in Nigeria at present, the single most important channel is the ATM, and the machines of Diamond Bank are therefore much more dynamic than the cashpoints consumers in the West are familiar with. The number of ATMs has also grown, to over 700.

While there are advantages to using CR2, Akumabor states that it was not guaranteed to be the case, and Diamond Bank actually went out on a limb in selecting it. The selection took place a few years ago, at a time when most banks in the country were all selecting a common utility. This consisted of a centralised back office, and all a bank would have to do was build the front-end and roll out the cashpoints. This was the ‘easy way’, Akumabor recalls, adding ‘having a shared service with the competition means that your pace of innovation will be the same as every other bank’.  However, Diamond Bank decided that the ATM was a key differentiator. CR2 offered both a front and back end as part of its solution. ‘This gave us the ability to manage the services we provide, manage the segmentation, manage the look and feel independently and not depend on the central switch,’ says Akumabor.

Not being on the central processor does have a disadvantage, though, namely that Diamond Bank has to adapt its own systems independently when the central switch rolls out processes intended for the whole market. ‘However we cover them incrementally. And more local banks are beginning to come to CR2,’ Akumabor thinks.

In terms of how the Diamond Bank ATMs actually perform, Bankworld enables the bank to be much more imaginative with the interface. ‘We believe 2014 will be the year of the tablet in terms of how it disrupts the customer experience,’ says Akumabor. The aim is therefore to replicate this at an ATM. ‘In terms of services, we see the ATM as much more than a cash dispenser.’ The services currently provided include fund transfers, and withdrawing money with or without a card. And Diamond Bank is keen to add services all the time. Bill pay is one target, and another is buying cinema tickets. Diamond Bank is also currently adding domestic remittances functionality. The bank offers a remittance service in branch, by phone or on mobile, and this will be added to the ATM. ‘The ATM will be a point where people can not only cash out but also initiate remittances,’ says Akumabor. This extends to non-customers also, who can also remit money to another cashpoint. ‘This is unique and should be quite powerful in this market,’ he adds. Down the line, Diamond Bank will extend this to its subsidiaries in other countries (such as Benin and the UK), allowing cross-border remittances to be initiated. 

Diamond Bank has Bankworld hooked up to its CRM system also. This means, in the first place, that different categories of customer will be greeted with a different experience, with mass affluent customers having different adverts targeted at them, for example. The advertising can also be interactive. ‘Say we offer a laptop finance deal. We will be able to capture a response from the user, and if it’s positive or negative, we can then follow it up,’ says Akumabor.

The remittance offering should be complete by April 2014, giving Diamond Bank customers a new way to make payments via the ATM. ‘We are trying to change a lot, but because we are running everything on the Bankworld channel manager, we can give the customer a consistent look and feel across the ATM, the internet and the phone,’ Akumabor concludes.

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by Darshana Adanwale
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