Today’s Banking Industry

Gros-Chat is a large international bank that has branches throughout the world and focuses on business banking (banking services for businesses). In one of their regional markets they have noticed a significant reduction in customer retention in recent months. This has impacted upon revenues and profits.

The Human Resource Department has also reported significantly increased staff turnover and sickness while the Marketing Department has reported increased customer complaints.

This has put increased strain on the organisation as a whole with different departments blaming each other for the bank’s failings. This has, inevitably, created an ineffective culture with poor inter-departmental communication and cooperation.

As a quality consultant you have been commissioned by the Board of Directors to evaluate the problems within the bank and to prepare a report focused on improving service quality within the organisation

(Student’s Note: For the purpose of this assignment, the report is prepared with the assumption that Gros Chat’s regional operations are in Africa, with operations in 11 countries in the region)

INTRODUCTION

In today’s banking industry (as is the case with other companies in the service sector), the rise of ‘consumer power’ has led to a strong and competitive business climate, with various companies vigorously competing against one another in a bid to attract, retain customers to earn revenues and ultimately make profits. While the battle for a share of the customer’s heart and wallet is fought on a global scale, there is no region with so much opportunity for future growth, dominance and profitability like in Africa.

The continent is witnessing an economic boom of sorts, with average output growth standing at 6.1 percent in 2013 (World Bank, 2014), placing it higher than the global GDP rate of 2.4%. Based on a joint report by the African Development Bank, the United Nations Development Program and the Organization for Economic Cooperation and Development, there has also been a massive inflow of Foreign Direct Investment into Africa, currently estimated at $80 billion (Wall Street Journal, 2014). These funds are a catalyst for economic growth because it helps stimulate domestic investment, increase in capital formation and also, facilitates technology transfer in the host countries. (Falki, 2009)

The banking industry in Africa should be poised to take advantage of these funds, but sadly, they have not done so sufficiently. Beck and Cull (2013 pp.1) in their recent research suggest that “African banks are well capitalized and over-liquid, but they lend less to the private sector than banks in non-African developing countries”.

Ordinarily, this should be good news for a bank like Gros-Chat, which specialises in catering to the financial needs of the private sector. Indeed, its expertise in this field has made it one of the leading private/business banks in the world. However, in recent times, the challenges of maintaining this status quo has been plagued by increased staff turnover, customer complaints, and poor inter-departmental cooperation, leading to low customer retention and high drop in revenues and profits.

Considering that Service is a key component of value that drives any company's success (Berry, Parasuraman, and Zeithaml, 1994) the current challenges are definitely a cause of concern. Inghilleri and Solomon (2010 pp.1) put it more succinctly when they state that “the single best thing you can do for your business is to build true customer loyalty, one customer at a time”.

This report aims at evaluating the issues affecting the service quality at the bank’s operations in Africa, suggest strategies that could be implemented to resolve these issues, and recommend future steps to ensure that a culture of continuous improvement at work is adopted by management and staff to ensure the survival of the bank’s operations in Africa.

ANALYSIS/JUSTIFICATION

Summary of Activities, Procedures and Findings

To identify the root cause of the challenge, the consultancy team spent several months holding extensive discussions, meetings and consultation with members of the various departments of the bank. Some of our team members were also embedded as anonymous employees to observe the day to day operations of 30 branches located in 11 countries (Nigeria, South Africa, Ghana, Kenya, Egypt, Namibia, Cameroun, Uganda, Mauritius, Senegal, Cote d’Ivoire).

A summary of our findings are as follows:

- There is a very strong disconnect between the organisation’s brand promise and the customer’s moment of truth,