Ghana: Competition brings out the best

Besides IT-based services as internet banking, commercial banks, in a bid to keep up with the competition, are engaging in aggressive deposit-mobilisation drives, which often involve them undertaking direct sales of their products to prospective customers.

Most of these banks, having realised that sitting in the comfort of their banking halls might not bring in customers, have decided to get out on the ground to mobilise deposits and broaden their customer base. They are going to the traders, artisans and market women who had hitherto been seen as too insignificant or unimportant to be considered for banking services.

Some banks, as part of their growth and survival strategies, are also embarking on network or branch expansion programmes to be able to get closer to their customers and serve them better.

NIB, which currently has 28 branches nationwide, has decided to open an additional 22 branches by 2016.

Mawuli Agbesi says, “This move by the bank is part of our efforts to bring banking closer to the people. Another strategy is to come up with more innovative products.”  

A somewhat unconventional strategy being adopted by commercial banks in Ghana to attract customers is the rolling out of promotional packages and services. Banks in the country have traditionally shied away from engaging in promotions but these days, the prospect of losing customers to a competitor bank, which decides to dangle a bait or two in front of current and prospective customers alike, is all too real.

Such mouthwatering packages as automobiles, home appliances and even gold bars are common promotional packages being offered by banks. And they are having the desired impact; after all, everyone wants something for nothing.  

Fidelity Bank, one of Ghana’s foremost indigenous banks, rolled out its “Go for Gold” promotion a couple of years ago with the aim of expanding its customer base, and at the end of the first edition of the promotion, the bank had overshot its own target by over 300%, according to a release from the bank.

Collaborating for growth
Exclusivity has been one of the long-held beliefs and closely guarded tenets of Ghana’s banking system but with the dynamism and modernity that are currently sweeping through the financial industry in Ghana, banks have suddenly embraced the idea of co-sharing, not only to cut costs but to bring their services closer to their customers.

A couple of years ago, it would have been unthinkable for a customer of one bank to use the ATM of another bank. But that is a reality now, thanks to platforms like Visa and the locally designed ‘Gh-link’. This ‘Gh-link’ interbank platform allows customers of all the banks registered on the platform to access banking services from any of the banks’ ATMs countrywide.

Smaller banks are riding on the back of the bigger banks, which have wider reach across the country, to extend their services across the country. Though there are challenges to this system, the very idea that it exists means that banks in Ghana are thinking out ways of survival, including riding on each other’s backs.        

Keeping up with the race
To the extent that no Ghanaian commercial bank has gone bust, it means that players within the nation’s banking sector have the confidence to constantly think outside the box. Fortunately, Ghana’s strong ICT backbone provides a good base for banks to tap into the benefits of ICT to innovate and grow.

The banks are doing even more – recruiting the best brains to work with them. From the huge profits most of these banks are raking in, according to their annual reports, they must just be getting their act right and enjoying the competition after all.