Nigerian Banks And Their Win-win Game Plan In Using Chatbots To Serve Customers, Drive Profits Through Tech Savviness



The Oasis Reporters


September 7, 2021



By the time you take a cursory look at banks’ Year end or half year results, one thing that would hit your face is that the financial powerhouses are awash with liquidity. Not all the dough though, would be from traditional deposit funds from customers. Banks are making a lot of money from non interest earnings.




Using tech tools are therefore helping banks a great deal to diversify from the traditional function of lending to customers as sole means of earning profits. This is because most Nigerian borrowers have yet to imbibe the spirit of business integrity that means businesses must be structured to use borrowed money strictly for making interest and paying back loans promptly and efficiently. Banks therefore have learnt to lend with caution and even prefer to pay fines when they fail to match up to the threshold of lending to liquidity ratio demanded by regulatory authorities like the Central Bank of Nigeria.


The painful attitude of most customers has therefore compelled banks to find other legitimate means of earning profits and returning value to shareholders and investors.


Enter Chatbots.


According to Emmanuel Mogaji, a Nigerian born lecturer at University of Greenwich, “Chatbots are becoming an integral part of service provision around the world. Chatbots are computer programs designed to simulate a conversation – both voice and text – with human users, especially over the internet. They are described as a never-sleeping, cost-efficient and powerful way to provide basic support to consumers. Chatbots can respond faster to customers and even personalise consumer experiences as they are programmed to understand the patterns of interactions”.


In other words, chatbots are cost-efficient. And indeed, what really drives the soul of business if not driving down operating costs while driving up profits ?
Can you then beat the savviness of using chatbots ?


And see the opening it is granting young computer graduates of our universities at getting jobs in banks.




Emmanuel Mogaji again. “Financial services are one area where chatbots are seen as having growing prospects. They can process most basic banking tasks such as inquiries about balances, account details and loans. Nigerian banks have started to use chatbots despite the inherent challenges of low adoption of digital technology, poor internet access, limited number of smartphones users and even security concerns”.






Nigeria is a nation with 22 commercial banks. 14 of the banks have chatbots. To demonstrate the increasing usefulness of chatbots, leading financial powerhouse like Zenith Bank just launched it’s own chatbot called Ziva with fanfare. You can bet that the remaining 8 banks without chatbots are feverishly revving up their plans to launch. More jobs are coming to computer graduates. Hence admission portals of Nigerian universities are jamming up over the unprecedented requests from candidates wishing to study that course.

Zenith Bank’s Ziva.



The cut-off mark for university entry into computer science and computer engineering courses consequently has gone up, to attract only the best students. Nigeria’s premier institution, University of Ibadan now makes it mandatory for prospective students wishing to study computer science to score no less than 65% and above at the post-UTME competitive examination to enter. Rather high score !





Chatbots from the 14 banks encourage financial inclusion and customer engagement. Their availability and performance are on mobile devices and computers, and the platform they operate on include Facebook, Telegram and WhatsApp according to Emmanuel Mogaji’s investigations.


The chatbots are mostly customised and given an identity, name or gender. Most of them are identified as either male or female because of their name and visual representation.



For instance, Zenith Bank’s chatbot is called Ziva which is feminine. UBA’s chatbot is called Leo, a masculine name. The chatbot Ivy from Fidelity Bank is presented as a female and cartoon character.




For example, Fidelity Bank’s Ivy is able to, when asked, tell you an ATM location.

IVY is Fidelity Bank’s chatbot, feminine and user friendly.



“Some banks had more than one chatbot on different platforms, so we found and analysed 16 chatbots in total. Access Bank, Fidelity and Keystone had two each. Access Bank had its chatbots on its website and WhatsApp. Fidelity used Facebook Messenger and WhatsApp, while Keystone used Facebook Messenger and Telegram. Excluding Access Bank’s website, the remaining 15 chatbots were on mobile messaging applications. Eight were on WhatsApp, five were on Facebook and two were on Telegram”, according to the scholarly work done by Dr. Emmanuel Mogaji.



Emmanuel Mogaji, who is a Senior Lecturer in Advertising and Marketing Communications at University of Greenwich further adds that “Chatbots are a growing trend in the digital transformation of financial services. Banks should explore the option of integrating them into their operations. Brands should focus on one mobile application as they can streamline their resources and avoid confusing their customers. As more people are conversant with WhatsApp and use it for texting and chatting, it should be the platform of choice.



Banks should seek verification of their chatbot on social media platforms to reassure consumers of their safety. They must also include terms and conditions on the chatbots. Banks must innovate to improve the responsiveness of their chatbot because consumers want an instant reply.



As identities have been created for chatbots, there are possibilities for branded features and engaging content around these characters. UBA’s Leo was an excellent example – it’s been given a life of its own and has been used across social media platforms to share different messages. It is also essential for banks to raise awareness about this digital transformation tool.

UBA’s Leo is masculine.



In the long term, Nigerian banks will need local graduates with the skills required for digital transformation. Universities should be offering courses like artificial intelligence, machine learning and interface design.






The chatbot banking sub-industry in Nigeria is growing by the day. Virtual banking assistants are social media-based (WhatsApp, Facebook, and Twitter) customer service agents with artificial intelligence to assist with banking services. In 2020’s KPMG Digital Channels Scorecard, Fidelity Bank’s IVY emerges the ‘clear leader’ of the rest of the chatbots due to her efficient and fast service delivery.



Closely followed by the likes of United Bank for Africa’s LEO, Access Bank Plc’s Tamada, and Stanbic IBTC’s Sami.

Fidelity’s Ivy demonstrates astute artificial intelligence. Being the best chatbot in 2020 set it apart as a clear leader. It’s instant and relevant responses from the chatbot is top-notch. Security, too, has remained in the top quality tier.

There are 7 things Fidelity Bank’s IVY has been identified as able to do.

Complaint Resolution
Account opening
Fast Funds Transfer
Bills payment
Transferring users to a Live Agent
Loans, Fixed Deposit Applications
Ivy Answers Random Questions
Introduced only a few years back, Ivy – who is accessible via her WhatsApp phone number 09030000302, was only assisting the bank’s clients with basic transactions. Basic transactions like load airtime, funds transfer, and check balance in a modest manner. However, what has made her the best chatbot in 2020 is that her services have become very sophisticated. These new features below have helped push her to the top of the table.

Experience wth IVY is so real that you would be convinced that it’s a real human you’re chatting with.

 

 



In conclusion, a keener look into Zenith Bank’s half year audited reports shows the great importance of leveraging technologies including chatbots to surge ahead in overall performance indices.

 


Zenith, as The Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, significantly reduced it’s interest expense by 26% culminating in improved profitability by experiencing a 9% growth in non-interest income from NGN116 billion in June 2020 to NGN127 billion in June 2021.

 


This further affirms it’s emergence as the
Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine. Hence it’s profit before tax (PBT) grew by 3% in H1 2021 from NGN114 billion reported in H1 2020 to NGN117 billion in H1 2021.






Written by Greg Abolo.

Additional input by Dr. Emmanuel Mogaji
Gbenga and other online research.


Greg Abolo

Blogger at The Oasis Reporters.

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