A human resources consultancy firm, Industrial Psychology Consultants (IPC), says 75,30% of the banking public are keen to ditch their current banks.
The consultancy firm said banks that manage to attract and retain customers on the basis of a sustainable blend of superior customer service, price-led competitive initiatives and diversified product offerings would survive the era of competition.
A report titled Zimbabwe Banking Sector Customer Engagement Report, released by IPC, says the Zimbabwean banking sector has entered a new era of serious competition. Changing consumer attitudes and behaviour would play a key role in setting the pace for the sector’s recovery and generating new opportunities.
It noted that with increased media coverage on bank industry challenges, the net result had been a more aware and selective banking customer.
“Banks have therefore found themselves in a reinvent (do) or die situation”.
The report said despite customers having realistic and achievable expectations from their banks, very few were living up to them.
“The consequences for those banks that continue to ignore customer needs will be disastrous as 75,30% of the research participants said they wanted to move away from their current bank. The era of traditional banking has passed,” reads part of the report.
It reveals that very few Zimbabwean banks have successfully engaged their customers.
“Our findings suggest that engagement ratios amongst Zimbabwe’s banking (institutions) are appallingly low. Of the 13 banks that qualified to participate in this survey, 7 banks were below our sample 50th percentile — the engagement ratio was 3:1,” the report said.
“When compared to the Gallup benchmark, only three banks were either at or above the envisaged engagement ratio of 8:1. These were MBCA Bank, Ecobank and Cabs. This is not surprising.”
The survey also said 7,40% of the banking public were concerned with high bank charges and service fees levied by their financial institutions.
“The respondents to this survey were asked to state what they disliked most about the service at their bank. Four other things were frequently mentioned before service charges. Only 7,40% of the respondents mentioned high bank charges and service fees as the feature they disliked about their banks,” the report said.
“Customers are concerned about fees. The 7,40% statistic tells us that one in every 13 Zimbabwean banking customers is concerned about the service fees.”
Banks stand accused of ripping off their depositors by charging inflated interest rates on loans ranging between 15% and 25%, and imposing exorbitant bank charges and bank charges of up US$2, 50 per transaction, which have seen them making massive profits in an ailing economy.
Available figures show that commercial banks, merchant banks and building societies earned close to US$192 million in interest on loan advances and leases, and more than US$118 million from other charges.
Each banking institution earned between US$1 million and US$16m in bank charges between January and June 30 this year.
Bankers Association of Zimbabwe president George Guvamatanga this week defended interest rates and service charges being quoted by most local banks, arguing they were based on economic fundamentals.
This came after an outcry over punitive interest rates and service charges from government and the banking public.
According to Reserve Bank of Zimbabwe governor Gideon Gono, banks have been quoting interest rates of up to 30% on loans.