The Need for Improved Customer Services in the Banking Industry



For one to understand what marketing of bank service is it necessary to first understand what marketing is.

According to  W.D Reckie (1972) marketing is “the performance of business activities that direct the flow of goods and service from producers to customers or user”.In the context of Bank marketing this variation would seem to be a useful definition.  Marketing is the creating and delivery of customer satisfying service at a profit by the bank. Marketing is customer oriented.

The definition also suggested that marketing is an active process

British institute of  marketing defined marketing as “management process which identifies anticipates and satisfies consumer requirements profitably”

This definition place the customer at the forefront of corporate thinking while the techniques permit the concept to be successful implemented

Marketing is not “bottle magic” or a clutch of formula answer or a series of gimmicks rather it is that function responsible for stimulating the organization to adopt itself to the customers changing desires.  It is function responsible for among other things continually reading the customers need creating product and product packages designed to satisfy those needs and communication the availability and benefits of these products.

Mcluer and Naglor (1980) sees marketing as:

  • The study of the attitudes and need of different categories of customers on whom its business depends.
  • Seeking to identify these customers need which it is capable of satisfying from its own acquirable resources.
  • Seeking to anticipate and react to change
  • Seeking the most cost effective ways of satisfying customer need at a profit to itself.
  • Recognizing the obligation to observe the moral and legal standards of the community to which it belongs.

The banks in their effort in marketing their service use the following tools

Marketing departments which takes care of marketing  of bank services but majority of banks have this in their head offices except few who have the department in their branches.

Some banks have organized training schools for the training of personnel to be more courteous to customers an understand more of the rudiments of the job as well as developing their skill.

The bank at time make occasional calls to old and prospective customers so as to solicit for deposit and help bridge the gap between the bank and its customers.  It should be noted however that unless a research on some of these tools are carried out find out their impact they would not find the tools beneficial to them.

The banks have to be more dynamic in marketing of their service especially if they have to cope with the increased competition. The banks need to improve a lot on their performance.


Customer service is a concept that is easy to conceptualize but difficult to specify “customer service has been defined as “connection of activities performed in keeping customers happy or satisfied”

The specific element of customer service are stated below:

  1. Speed of delivery
  2. Consistency of delivery
  3. General working with customers towards mutual service.


Positive realization of the above customer service will undoubtedly engender customer good feeling towards an organization.  Banking service is a professional service professional service marketing includes “all organized activists and programmes to  work because of lack of adequate technology.  Ojo and Lynda writing on by professional service designed to retain present customers and current new ones by satisfying their needs through the delivery of appropriate service on a paid basis in a manner consistent with creditable professional goals and norms.

This is the view of Shoetack (1987) “planning the service encounter” customer service management in necessary in the marketing of service.

Micheal J.Baker (1985) defined customers services as “A system organized to provide continue it link between the time the order is placed and the time service received with the objective of satisfying customers needs on along term basis”

In the banking service the placement of order is supposed to be simultaneous with the receiving of service or at most the time gap should be minimal.

The duty of the firms management therefore is to see that no gap exist between customers expectation and the firm performance.  This could be done through regular monitoring of customers complaints and suggestions and addressing customers need.

A satisfied customer not only comes again but spreads the news of his satisfaction to other.  Customers therefore deserves to be well through of by every organization.  His satisfaction is of prime importance.


The factors that influences the quality of the service provide by the commercial banks include the quality of management bank density and communication system social and economic influences.


The objectives of bank management are stated below.

  • To maintain an adequate liquidity in a bank.
  • To maintain earning for the shareholders
  • To provide resources for the financing of community development.
  • To preserve the reservoir of resources for contingencies.
  • To ensure high quality of service to the bank customers


To achieve these objectives bank need high quality management.  Management must be disciplined and should be able to instill discipline in the subordinates management must be knowledgeable about the operating of the bank.

A good management must have the ability to monitor the progress of the bank. Management must also have to determine the mix of service which forms the output of the banks and these service must be what the customers want.

Discipline and effective supervision in bank  are very important in the bank since most customer complaints are added to the delay inefficiencies in the banking halls and at the counters where they want for services.


This is related to the number of banks in an area to the  total population and the geographical area if the density is low the quality of service would be affected since this would mean that the few banks that are available would be over structured with over capacity or that many people would not have the opportunity of using banking service. C.V Brown (1966) stated that “An adequate network of banking offices is necessary both to mobilize savings and as part of the infrastructure necessary to the development of a modern exchange economy.

By any measure Nigeria is grossly understand the significance of a very  low banking density is that the service do not penetrate into the normal business habits of the population  and the financial system of which banking sector constitute the most important part seems to be outside the business and commercial life of the population.

Another effect is that because of low density the branches that are there tend to be under considerable pressure to provide all ranges of service simultaneously.  Many of the complaints about the low quality of the service of the banks stem from this factor.

Until therefore the number of branches has grown sufficiently to increase the ratio of  branches per unit of population the quality of banking service will remain a sources of  stringent  criticism from the customers.

Nwankwo (1980) commenting on the effect of the distribution of   banks branches said, the distribution of commercial  banking facilities in Nigeria is very uneven both in terms of relative population and of land areas of the states. This impedes the development of banking habits and mobilization of savings.  It also impedes effective marketing in the industry since this requires that bank service be made convenient and accessible to the people.

“If the Nigeria financial system is ill-equipped to mobilize domestic savings it follows that it is also ill-equipped fro effective lending”

Nwankwo further commented that in their present structure the Nigeria commercial banks are ill-equipped fro an effective mobilization of personnel saving.  Banks are  few in relation to the population and size of the country.


This is essential for banking operations both between banks and their customers. This is essential for effective control and co-ordination communication could be through road, air, rail, telex and telephone, e-mail system

Nwankwo G.O Summed up the importance of good communication thus

“Communication is the energizer and appetizer in banking and is of paramount importance with   a bank between banks and with their customers without effective communication co-ordination being the harmonious and timely combination of elements and actions to achieve a desired result would not be achieved.


There are also socio-economic factors that effect both customer and staff to their disservices.

The precondition for this which he gave includes recognition and appreciation for ensuring and maintaining good industrial harmony.

He also advised the humanization of work by good human resources manageemnt. Recognition of   causes sources of disharmony for appropriate  address is also important.

He also required the importance understanding the terms of conditions of work by all employ/ managers communication gap also featured in the threats to industrial harmony.

Conclusively while not exhaustive the four Ms “mistakes, misunderstanding misinterpretation and misrepresentations.

“Summaries the major courses of  distrust and disputes between management and labour and therefore tend to pollute the industrial relations atmosphere.

Managers have therefore sought ways of promoting the workers happiness in order to secure maximum out put and productivity from them.  Otherwise impolite attitude and strikes are some of the probable consequences of not understanding the foregoing.

In order term frustration could be said to get in with its attendants apathy reflecting in the  services that are being give to customers.

It is true that hard work hardly kills but bank eschew slavery. In a condition where obsolete equipment are being used where as modern ones are know to be available to competitors can give workers can give workers frustration.  The adequate number of staff and equipment go a long way in motivating staff to excellent services as they will enjoy doing their work.

Another example of this social influence is the extended family system where a customers who is related to a bank manager can use his influence to secure loan on a softer term; the credit work lines not with standing.

“A branch manager may reject a loan application only to return home to see his mother of father-in-law his own parents or another influential figure already waiting to pressurize him into granting the loan.


According to E.O Ebiefe (1980) it simply means the enactment of lows and directive regulating the establishment structure and operation of these institutions. These law are enacted by legislative procedures but enforced by the monetary authority which  is composed of the ministry of finance and general bank of Nigeria.

In Nigeria the banking boom and banking crises of 1947 and 1952 was a result of non-interference by government in banking operations.

The q952 banking ordinance was the first attempt to control banking in Nigeria.  This was followed by the central bank of Nigeria act of 1958 company.  Decree of 1968 and banking decree of 1969.

The establishment of the central bank of Nigeria in 1958 marked the turning print in government efforts to harness the activities of the commercial banks for national development through the issue and regulation of the  currency the control of credit and foreign exchange the supervision and direction of the system generally.

Since banks mange people’s money mainly to make profit both for themselves and for the owners of money they manage sub management may be ruinous to the economy.  government intervention is necessary to prevent what can destabilize the  economy which include the bad monetary management.

  1. O Ebiefe gave another rational for government control thus, “To ensure that these institutions channel funds under their control to these sectors of the economy that has the greatest potentials for fast growth and development”

P.A.Oguma (1981) cited the controlling power of CNB over other banks as “To act as banker to other r banks in Nigeria (and abroad) and co-operate  with the other banks in Nigeria to promote and  maintain adequate and reasonable banking service for the public ensure high standard of conduct in banking management and to further policies of national interest.

Although the objectives behind the various control measure are laudable but some of the control measure can prove to be un conducive to the efficient performance of   banking operations. The banking act of (1969) section 13 forbids banks  form holding share capital of any financial commercial agricultural industrial or other  undertaking except with the approval of the central bank. But in practice such permission has neither been sought nor granted to commercial


The first task of the manger is to decided with his men the objectives of his development within the framework of the corporate objectives this will then enable each of them to understand the part he had to play in the achievement of these objective.  Ones the individual objective have been agreed the employee has to work towards achieving the targets. The employee will be evaluated/appraised in order to know how the employee is performing on the job by his superior.

Here then lies the importance of performance appraisal in this viewed of he employee performance  based on the objective agreed.  From the performance  appraisal will emerge the strengths and weaknesses of the employee and on the basis of this the appropriate remedial creation such as training can be  undertaken.

This bill help to increase the performance of the employees towards their customers

Mc Groggier Douglas (1960) pointed out that the  goals of performance appraisal include the systematic judgment to back up salary increase promotions transfers and sometime promotion transfer and sometimes demotion or termination of appointments. They are also a means of informing a subordinate how well he is doing and suggesting  needed changes in his behaviour attitude skills or job knowledge.

It is through performance appraisal that employees will know where he stands or an employees know” where he stand” with the boss. They are also increasingly being used as a basis for coaching and counseling of the individual by the superior.

A.K Ubeku (1975) printed all that the objectives of performance appraisal among other   things include:

  • To provide an opportunity for the many or supervisor and his subordinate to reveal the latter’s work in the light of the objectives set for him
  • To encourage the supervisor or mangers to think analytically about his subordinate as individual human being do that he will understand them better and this will be able to base the planning of work in his department and appreciating of each individual’s competence and suitability.
  • Writing on the methods of performance appraised Edwin B. Filppo( 1961) stated that this can be done in the following ways graphic scale ranking grading check-lists forced choice description.


The process of motivation as an instrument for inducing or increasing the performance of workers in organizations has long been in existence.  Behavioural attitude on the part  of workers formed  the basis for the  use of threats of discharge or sack by managers as a “ motivating device” in the early history of organization in many parts of the world.  During these early periods since all behavior of workers in organizations cloud be explained by the hedonistic principle the management to these organizations where able to keep productivity at a high level by the use of threats of dismissal a condition which led to workers to increase his productivity so as to avoid the difficulties  associated  with termination and having to see another means of employment.

By the beginning of  this century however much systems of motivation on formulated around the hedonistic principle where conversely criticized and were seem by many scholars as not representing a useful basis for   the motivation of the workers.  So by the beginning of century  therefore most psychologist and managers had discarded the hedonistic principles in the formation of incentive scheme as and intensified their search for alternative basis of motivating the  worker towards improved performance.

Frederick Taylor (1911) saw the worker as a simple rather than complex human being who if properly oiled by money would serve as efficient component in the organization. Thus the emphasis of manager at the turn of the century was on wages payment which was used as the “carrot while punishment and dismissal was used as the stick”

This stick and carrot tyre of motivation according to Ubeku has proved untenable in recent times as organization has expanded in their size and scale of operations as well as the greater skill and education possessed by the worker.

One of the foremost theories of motivation based on the nature of human needs is that of Abraham Maslow (1954) he emphasized the satisfaction of the needs of individuals as the key to successful motivation. His theories of human motivation is based on the following assumptions.

  1. Individuals have certain need that influences their behaviour. Needs that are not satisfied motivate or influence behaviour while satisfied need to not motivate hierarchy.
  2. All human need are arranged according to hierarchy of impotence from the basic physiological to the complex self-actualization needs
  3. An individual’s needs at any level on the hierarchy emerge only when lower level need are reasonably well satisfied.

The essential theme of Maslow’s human motivation theory is the hierachical ordering    of need to reflect the various degrees of importance to the individual and those needs are then arranged in ascending order of hierarchy from the lowest needs which are physiological to the highest needs which are therefore self-actualization.  This hierarchy’s shown below:

  1. Physiological needs
  2. Security (or safety) needs
  • Affiliation (or social/acceptance) needs
  1. Esteem need and
  2. Self actualization needs

The   intricate relationship that exist between each of the needs mashoe’s hierarchy makes it imperative that managers in organization and various institution pay greater attention to a study of the internal dynamics of the workers by focusing on the works personality attitudes and perceptions so as to be a position to formulate incentive schemes that would achieve its objective of improved job satisfaction and hence increased productivity.

This fact was further emphasized by Filppo (1961) who noted that a study of Mashor’s hierarchy of need theory helped to explain  certain mistakes made by management of many organization as well as to justify certain philosophies.

For example it has become evidence that organizations that embark on elaborate personal service programs without the basis of a  fair and competitive ways structure (that would) and in satisfying basis physiological needs are wasting their efforts and money.  Other organizations that appeal to  employees for co-operations and loyalty usually do not achieve their objective of increase productivity when a reasonable degree of job security has not been provided.

Mc Gregor Docglas (1966) preferred a theory of motivation based on certain human behaviuor. These assumptions he categorized as theory x or theory y. Docglas   Mcgreor stressed the importance of understanding the relationship  between motivation and behaviour.  These assumption he categorized as theory x theory y.Douglsa Mcgregor stressed the importance of understanding the relationship between motivation and behaviour.  In observing the practice and approaches of traditional managers Mcgregor believed that mangers usually attempt to motivate employee by one or two basic approaches theory x and theory y.

Theory or the traditional view of management suggests that managers re required to coerce control or threaten the employee in order to motivate employee towards improving the employees performance. In contrast to this Mcgregor proposed an alternative philosophy of human nature which be referred to as theory y theory y emphasized the importance of the  worker commitment to the task at hand this being a function of the rewards associated with achievement.  Following theory Y a manager basically believe people are capable of being responsible in nature they do not require coercion or excessive control by the manager in order to perform effectively.  Mcgregors basic belief was that theory y was a more realistic assessment of people.

Some school of though in their analysis of Mcgregor’s theory x and y noted that under the traditional  view of management (ie theory x0 most managers in the organization could not require to formulate any motivational package or incentive plan to increases the performance  or productivity of the workers. The threat of punishment and the authority and trap inspired by the management would coerce the workers into  great productivity. This approach they concluded is purely out of touch with modern management thinking and cannot serve as a strategy for motivation in most modern organizations.

They saw Mcyegor’s theory y as being representation of modern management philosophies in which most managers attempt to create an  environment which would encourage the  workers commitment to organizaiton objectives and which will provide opportunities for  the maximum exercise of ingenuity and self direction   among employees in achieving them.

Vroom (1970) developed and approach to  motivation know as the expectancy theory which attempts to explain behavior in terms of an individuals goals and the  expectation of achieving these goals. Vroom’s expectancy theory assumes that people can determine which out comes they prefer and make realistic estimates of the chances of obtaining them. The key concepts of the expectancy theory are that motivation depends on.

  1. Individual expectancy (ie his or perception of the chances or probability) that particular out come will occur
  2. As a result certain behaviour
  3. How much value and individual places on a specific outcome



Banks have to attract customers to deposit money with it and attract borrowers and user  of funds. The special place which banks hold in the society and in monetary policy also brings about problems in banking marketing.

One of the problems encountered in bank services is that of the use computer.  According to Wastosn the computerization of accounts is good but may pose problems one of such is the feeling of impersonality and indifference.  These are certain aspects of supervision and   judgment which a computer cannot at present satisfy. All the same thing are essential to the development of all the never techniques of money and credit transfer.

Computer would go a long way in solving `some of the problems facing  the banks in Nigeria but this has its limitations. The technology here is not adequate and there are cases where some banks attempted it. It did not work out.  The reason was mainly that when it breaks down, it is almost impossible for it credit cards. Credit card it another attempt at brooding marketing of bank services, but has its draw banks like banks in dispute within their customer. But credit card provide an enormous of the people who are card holders.

They concluded that there can be fewer better ways of developing business than by satisfying the customers and breaking them to recommend the bank to others.

No amount of market researcher advertisement and public relations activities etc. that can tell the banks as much as the quantity of service it   provides.



A brief his of union bank of Nigeria Plc the B.B.N.A remained the sole bank in Nigeria until 1917 when the colonial bank opened offices in Jos Kano Lagos Ibadan and Port Harcourt. By 1925 the Barchays Bank had absorded the colonial bank in an integrated international bank. The new bank was named Barchays bank (Dominion colonial and overseas).

In response to the company’s Decree of bank of Nigeria limited in 1979 the establishment of indigenous banks was motivated by a group of indigenous banks businessmen who complained that both B.B /WA and the colonial Barchays bank did not take adequate care of their finical  needs.

Union bank has witnessed a tremendous growth in number and branches. The first west African branches were opened in 1917 at Lagos and Accra the capital of Nigeria and world coast. Other branches  were also opened that year in Nigerian at Jos Kano and Port Harcourt  and in the world coast at Sekondi also at free town in Sierra Leone and Cameroon. The bank pattern of decentralization was extended to west African by the establishment. In June 1951 of a local hand office in Lagos with J,C.D. Cox as the first director and he was the driving spirit behind the spate of new branch openings during to fifties.

In 1957 we had 51 offices in Niger compared with seven at the end of 1949. in the same period the number offices in the whole of west African had increased from (17to10-4) Union Bank today has expended to almost all the parts of the country with numerous branches in both Urban and rural area. The aim of this expansion is to ensure that service are duly rendered  to our various customers all over the world.


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