The document discusses key considerations for Nigerian banks going forward, including customer segmentation, corporate governance, and risk management. It recommends that banks clearly segment their customers to better understand who their core customers are. It also stresses the importance of strong corporate governance, with boards holding executives accountable. Adopting an integrated approach to governance, risk management, and compliance is suggested. Regarding risk management, the document notes failures led to massive loan losses, and banks must revisit this core strategy element.

1. July 2010
What
Nigerian
banks
should
become
Ciuci Consulting

2. Contents
3 Background
5 Customer segmentation
– “who truly are my customers?”
7 Corporate governance
– “how do we get it right?”
9 Risk management
– “openness is key”
12 perational efficiency
O
– “how can we get it right?”
18 A final word

3. Ciuci Consulting 3
Background
The Nigerian banking industry recently experienced the greatest shakeup since
the consolidation exercise of 2005 with the central banks’ announcement of key
reforms aimed at promoting growth and sustainability within the sector. After the
fallout of the audit carried out by the apex body in mid 2009, the reforms, which
include: bank categorisation and the introduction of tenure limits for CEOs and
directors, are poised to significantly alter the structure of the industry and usher
in a new phase of banking in the country. Only institutions with clear corporate
strategies, strict adherence to corporate governance practices and efficient opera-
tions will survive this evolution.
By examining some of the recent reforms/actions initiated by the CBN and their im-
pact on the industry, it becomes clear that banks have no other option but to rethink
their strategies and clearly articulate why they are in business.
Table 1: Key actions initiated
by the CBN Governor S/N Reforms/Actions Details Impact on the banks
– Sanusi Lamido
1 CBN Audit
· Discovery of significant liquidity · Affected banks lost their market
shortages in certain banks leading share.
to the injection of over ₦620 billion · Change in the rankings in the
into the affected banks. industry.
· The sacking of eight MDs of the
affected banks
2 CEO tenure limits
· Maximum duration for CEO tenures · Adequate succession planning has
pegged at ten years, causing some become critical.
of the chief executives to leave earlier · Change in strategies and a true test
than they had anticipated. of sustainability for banks that suffer
from the key man syndrome.1
3 Bank Categorisation
· Categorisation of banks by type · It will become imperative for banks to
with different banks having develop sound corporate strategies.
different capital requirements. · A shift from universal banking to spe-
cialized and more focused banking.
1
the tendency for one man, usually the CEO to solely dominate the decision
making process of the bank

4. Ciuci Consulting 4
In the processes of rethinking strategies and articulating growth plans, four factors
should be considered;
Considerations Market realities
Defining the objectives of How well positioned is · Low level of economic
all stakeholders i.e. why is the bank to meet its target development in Nigeria.
the bank in business and segment? · Lack of adequate skill
on what basis did it choose in the industry
to serve the segment it · Poorly implemented
selected? corporate strategies
· High cost of doing business
· Unpredictable regulatory
environment.
· Poor corporate governance
The goals of the regulatory What are competitors doing practices
agencies, their expectation differently; what is the bank’s
of the banks and the likeli- market share?
hood for them to change
their objectives.
The above mentioned factors can be broadly categorised under the following
sub headings:
• Segmentation Strategy – as a fallout of the corporate strategy of the bank
• Corporate Governance – as an internal regulatory mechanism
• Operational Efficiency – as a winning strategy
Figure 2: The Winning
Formula Considerations
Segmentation Strategy Corporate Governance Operational Efficiency
· Market Analysis · Transparency · Human Capital Management
· Customer Segmentation · Risk Management · Business Processes
· Product Development · Compliance Management
· Customer Service

5. Ciuci Consulting 5
Customer segmentation –
“Who truly are my customers?”
The fundamental objective of segmentation is to identify the customer groups with
similar needs and organize an institution in a way that it easily meets the needs of
the same customers. Banks therefore, like other broad service offering institutions
must be able to clearly segment their customers and develop specific strategies to
attract and retain them. In the recent past, Nigerian banks were known to deploy
resources to target all customer segments with the objective of growing accounts and
deposit volumes. This resulted in banks having a large pool of customers with little
or no knowledge of who their core customers were. Bank categorisation indirectly ad-
dresses segmentation as by law, banks are compelled to define their focus by select-
ing and focusing on a niche segment within the market. The categorisation process
involves banks streamlining their operations to suit these chosen market segments,
thereby causing an adjustment within the industry that will lead to specialised
banking. Banks should bear in mind that like babies that are provided with bright
coloured toys because of their natural attraction to bright colours, banking customer
groups with unique needs should be provided with products and services that are
customised for them. Customisation here also means that even the aesthetics of a
branch has to be attractive to the customers being targeted by the bank.
Consequently, banks must conduct segmentation exercises that will enable them
define who their customers really are. This way, the financial institutions will cease
to become all things to all people but offer products and services to select groups of
customers based on the segmentation.
How should segmentation be done?
By sub dividing the market into discrete customer groups that share similar char-
acteristics, segmentation allows organisations effectively identify customer needs
within the individual segments. Banks that identify underserved segments can
proceed to outdo the competition by developing uniquely appealing products and
services. Customer segmentation is most effective when banks tailor their products
to segments that are most profitable and serve them with their distinct competitive
advantages. This prioritization can help in developing marketing campaigns and
pricing strategies to extract maximum value from both high and low profit custom-
ers. A bank can use customer segmentation as the principal basis for allocating
resources to product development, marketing, service and delivery programs.
The universal banking system employed in Nigeria afforded banks the liberty of
developing broad strategy programs which failed to capture the uniqueness of their
operations. Their preoccupation with so called innovative functions eventually led to

6. Ciuci Consulting 6
a deviation from core banking operations, which were originally focused on satisfying
customer needs. Consequently, a gap was created between customer needs and bank-
ing products and services.
Generally, segments in the industry are categorised as either retail or wholesale.
The segmentation process requires that these segments are further broken down into
smaller sub segments based on specific criteria. Below is an illustration of the process:
Table 3: Possible criteria
for segmenting the retail Examples of Segment Segmentation Criteria Basic considerations in serving segments
market
Students Income Product development
High Net worth Turnover IT & other required Infrastructure
Individuals (HNIs) Age and support
Retirees Location
Human capital management
Military/Civilian Gender
Risk management capabilities
Lifestyle
Access to data
Splitting customers into segments enables a more detailed study of the segments.
At this point, profitability of the customers and their needs are analysed with the
objective of ranking segments in order of value (profitability) and benefit to the
organisation. The organisation must also consider its capability, in terms of human
and material resources in making its decision on what segment to focus on. Capabil-
ity could imply sales and marketing expertise, infrastructure, governance and other
competence related issues. Selecting the segment would then be a function of the size
of the segment or the value that can be derived from the segment and the capabil-
ity of the bank to serve the segment in the immediate and long term. For example,
can an investment bank decide to focus on retail banking? Does it have the relevant
skills and resources to serve the related customer segment? These are examples of
questions that can be asked at this point.
The criteria for determining the category a customer falls into varies from one bank
to another. Research has shown that most Nigerian banks do not report their finan-
cials by consumer segments, partly because there is no standard method for classify-
ing customers. As a result, it is difficult for a bank to track the profitability of each
segment and compare itself with its competitors by the same standards.
Other questions that should be answered following proper segmentation include:
• What are the objectives of the bank?
• What are its key capabilities (strengths)?
• Who are its most profitable customers (customers that the bank makes more profit
from and not necessarily the ones with the largest account balances)?
• What are the market opportunities not captured by the bank and what mechanism
tracks these opportunities consistently?

7. Ciuci Consulting 7
Any bank conducting a segmentation exercise should evaluate its internal custom-
ers and leverage market studies to glean insights for determining focus. This could
lead the bank to divest from some unprofitable segments and build the channels to
support the newly identified segments. The process may eventually lead to a change
in the bank’s organizational structure, as well as its marketing and sales strategies.
Segmentation will enable a bank position itself rightly for success as the exercise
entails a thorough assessment of the bank’s capabilities, a sound evaluation of op-
portunities available and the development of a strategic roadmap that shows how
the bank can get to serve its customers profitably.
Corporate governance –
“How do we get it right?”
The role of corporate governance in management of banks has been the subject of
much debate, with stakeholders holding differing opinions on how to institutionalise
proper corporate governance within banks. Following the reconsolidation exercise in
2005, the CBN set out to establish a corporate governance code to serve as a frame-
work for banks to build their governance systems on. This was done with the objective
of mitigating the challenges that came with having bigger banks with greater liabili-
ties, improving public confidence in the banking sector and safeguarding shareholder
funds. Highlights of the SEC and CBN Corporate Governance Code for banks include:
Table 4
· Separating the roles of CEO and Chairman
· Improving the quality and performance of board members
· Merit based holding of top management positions against shareholding based system
· Transparency and disclosure in all forms of reporting; financial and non – financial
· Protection of the rights and privileges of all shareholders
· Definition of the role of the audit committee
Despite the noble attempts made by the regulators towards improving the quality of
corporate governance, the infamous CBN audit of 2009 revealed significant corpo-
rate governance failures in several banks. It was discovered that chief executives of
several banks occasionally flouted laws by approving loans without recourse to laid
down loan approval processes. They also allocated funds to projects without proper
consultation with their boards and other stakeholders. In some cases, boards were
found to be complicit in these malpractices as personal interests were put ahead of
the interests of stakeholders. Consequently, the issue remains how to ensure that
banks adhere to best practices in corporate governance in order to safeguard the
investments of shareholders and enhance the value creation process.

8. Ciuci Consulting 8
Fundamentally, for an institution to ensure quality corporate governance, the pro-
moters of the institution must view corporate governance as a priority. By doing so,
necessary attention is paid to issues which could ultimately define the company’s
existence. The nature of accountability of the managers to the stakeholders is a key
factor in determining the quality of governance. Banks must ensure that corporate
governance codes, which clearly spell out guidelines for decision making, reporting
and compliance, as well as, the responsibilities and limits of executives, offices and
employees are developed. Strict adherence to such codes, which must be developed
in line with regulatory requirements and international best practices, will ensure
that the organisation operates within the confines of globally acceptable governance
standards. Agents with the highest responsibility for ensuring corporate governance
within banks remain the executive management and the board of directors.
As the final authority over the institution, the board of directors must effectively
exercise their supervisory function over executives who run the company on a daily
basis. Without clearly defining and separating the powers of the board from that of
the executives, there is a tendency that a bank may end up with a weak board with
no real impact on its activities. For this reason, it is necessary for boards to consist
of ‘independent outside directors’ whose interests do not conflict with those of the
bank. Studies conducted in the past have shown that companies with boards that
have a larger number of independent outside directors tend to act more objectively
in the interest of shareholders as against those with directors who are affiliated
with the company in some way. As much as the activities of the board may not
contribute directly to improved financial performance, its impact on specific issues,
which could potentially influence overall performance, is quite significant. Nigerian
banks must adopt a pragmatic approach to the selection and appointment of board
members for the purpose of improving the quality of corporate governance in their
respective organisations.
On the part of the bank executives, CEOs must ensure that they comply with laid
down governance codes. A past trend in Nigeria has been one of CEOs controlling the
boards by having directors hold shares by proxy. Such counter-productive practices
were partly responsible for the recent mishaps in the industry. It is therefore neces-
sary for the regulators to outlaw such practices, which undermine the entire system.
Beyond the roles of agents within banks, contemporary practices involve taking an
integrated approach towards governance, risk management and compliance. By lev-
eraging leadership, risk management and technological resources at their disposal,
management can build an extensive governance framework into an institution. The
process involves translating risk management, corporate governance and compli-
ance practices across business units and processes and using technology to track and
measure adherence to such functions. This presupposes that all compliance risks at
the business unit and process levels are well defined so that deviations are captured
when they occur. A key advantage of this is that the impact of compliance risks on
the bank can be appreciated as soon as they happen. Therefore management and
employees’ gain better understanding of the business and can work towards making

9. Ciuci Consulting 9
improvements to the business and processes. The overall result is the establishment
of a governance superstructure that supports the organisations governance objec-
tives. Consequently, Nigerian banks need to move with the times in which technol-
ogy has become an integral aspect of business and a critical success factor in the
modern age. The goal of institutionalising best practices in corporate governance
must be pursued from all possible angles.
Finally, three main conclusions can be drawn:
• Corporate governance must be given priority status by the promoters of the banks.
• Executive management and the board of directors who are primarily responsible
for enthroning corporate governance within banks, must take up the challenge
and ensure that corporate governance codes are developed in line with regulatory
requirements and best practices are developed and strictly adhered to.
• Adopting an integrated approach to corporate governance, risk management
and compliance could be beneficial to banks by promoting a governance culture
within the bank.
When top level management demonstrate ethical conduct, abide by generally
accepted principles and expect no less from employees, they successfully institute
moral values and authenticity as a fundamental aspect of the corporate culture and
all employees are more likely to embrace those values.
Risk management – “openness is key”
Weak governance, inappropriate incentive structures and poor risk management
systems were among some of the main causes of the collapse of the global financial
system. Nigerian banks were not left out as most of them failed to adhere to estab-
lished risk management procedures, resulting in massive loan losses. Most banks
were highly exposed to the oil and gas sector and were consequently burnt when oil
prices crashed. A significant number of banks were also involved in margin lending
which arose as a result of the growth of the stock market. CBN’s special audit report
indicated that the total deposit liability of the eight affected banks stood at ₦3tril-
lion while aggregate non-performing loans stood at over ₦1.5trillion, representing
61% of industry total. The full disclosure revealed huge losses of unprecedented
proportions in the history of Nigerian banking.
Risk management failures are generally attributed to frameworks and technologies
adopted by the banks, but are actually largely affected more so by the executives at
the helm of affairs. Some banks gave loans to customers who did not meet guidelines
as set by the CBN, but based on ‘perceived gains’ from the businesses and the basis

10. Ciuci Consulting 10
of relationships. The average non performing ratio for the 24 banks in 2009 stood
at 34.4% against the 2008 figures, which stood at 5.6%. This exponential rise only
justifies the need to revisit the subject of risk management as a core element of the
corporate strategy of any bank.
Risk management is usually tasked with audit and regulatory functions often cen-
tered on hedging of certain risks, transferring risks to other participants, controlling
of risks that have been taken by the banks, managing insurance policies, reviewing
of reports from rating agencies and outsourcing of critical risk analysis.
For a risk management structure to be effective in delivering its benefits, it requires
the full involvement and ownership of the executives. This involvement must begin
with a genuine determination by the leadership to comply with risk management
policies and procedures. They must constantly let their decisions and actions be driv-
en by the interest and safety of all stakeholders. It is the duty of the board to take
overall responsibility for risk management. Management must then translate the
direction set by the board into the strategic development of policies and procedures.
Figure 3: An Integrated Risk
Management Approach
Executive
Ownership
Effective Risk
Open Data Driven
Management
Communication Decisions
Framework
Risk Pro
active
It is also the responsibility of the management to ensure that a climate that encour-
ages open communication of risk is maintained in the bank. Departments must be
able to cross communicate even when the information negates conventional practice.
A well developed risk management policy is useless if it is not clearly communicated
and implemented as part of the corporate culture of the bank.

11. Ciuci Consulting 11
Furthermore, the risk information being communicated must be compelling in the
data it presents. This will enhance the quality of the decisions made. For immeas-
urable risks, qualitative measures can be presented as general guiding principles
and qualitative risk measures could be communicated as guidelines. To ensure that
risk taking remains within the limits set by management, any material exception to
the risk management policies introduction and tolerances should be reported to the
board who in turn must initiate appropriate corrective measures.
Risk management as an integral part of corporate strategy
A bank’s ability to measure, monitor and steer risks comprehensively has become a
decisive parameter for its strategic positioning. Each bank would have to develop its
own risk management processes and internal controls, depending on the nature, size
and complexity of the bank’s activities. However there are some basic principles that
relate to all financial institutions irrespective of the size and complexity of the bank.
An Effective Risk Management Framework for Banks*
Clearly Defined Organization Management Constant Review
Policies structure Information System of Policies
Clearly defined risk manage- A well constituted organiza- An effective management in- A framework that ensures an
ment policies and procedures tional structure clearly defining formation system that ensures ongoing review of systems,
covering risk identification, roles and responsibilities of flow of information from opera- policies and procedures for
acceptance, measurement, individuals involved in risk tak- tional level to top management risk management to adopt
monitoring, reporting and ing and management. and a system to address any changes.
control. exceptions observed.
Figure 4 Figure Source: Ciuci Consulting.
*From the Risk Management, Guidelines for Commercial Banks and DFIs, SBP.
In conclusion, limits and other controls must be respected by top management of any
bank if risk management is to be given its rightful place. An effective risk manage-
ment office should possess the ability to detect early warning signs and through
their already established risk culture, communicate the information to the bank.
The risk managers must also be able to keep up with the ever changing needs of the
environment in order to have a good understanding of the business and risk associ-
ated with each endeavor. The audit function within the risk management framework
must remain independent and objective. The banks must be able to support the risk
managers with the organisational structure; infrastructure and internal processes to
enable them perform their role efficiently.

12. Ciuci Consulting 12
Operational efficiency –
“How can we get it right?”
The recent global economic downturn has changed the orientation of businesses
globally and especially in Nigeria from focusing purely on turnover (volumes) to effi-
ciency (business optimisation). Companies must now focus on ensuring that funda-
mental business requirements are taken care of before seeking other lofty objectives
(which are often derived after the foundation for growth has been well laid). The
need for optimizing business processes has become more obvious than ever before.
Most Nigerian banks still have rudimentary processes that negatively affect their
ability to serve customers given evolving needs and business conditions. This has
resulted in most banks having high cost to income ratios in excess of the industry
average 58%. In order to address this, banks must review their processes to identify
gaps, determine points of failure and subsequently redesign these processes. Opti-
mised processes provide multiple benefits to banks, leading to better financial per-
formance and an improved reputation. It is pertinent to ensure that skilled persons
with the requisite know-how are involved in process design and management as it is
the people that play the central role in making systems and processes work.
It is not uncommon to hear customers complain about the quality of service that
they receive from their banks. For most, their relationships with account officers are
the reasons why they still maintain relationships with their banks. Unfortunately,
banks have lost sight of why they are in business. Customers were the premise upon
which the practice of banking was founded, for this reason and for the survival of the
industry, Nigerian banks need to focus on running efficiently.
After the reconsolidation exercise in 2005, Nigerian banks were awash with funds due
to the M&As which produced larger entities and stock offerings which provided capital
for investment. They proceeded to expand their operations in line with the regulatory
objectives of having bigger and stronger banks, capable of bearing greater risks. In
pursuit of these objectives, most banks ignored fundamental issues such as operational
efficiency and were consequently caught off guard when the downturn emerged.
Figure 5: Focus on
operational efficiency
Revenues
Focus on operational
Efficiency through:
· Human Capital
Management
· Business Process
Management
· Delivering Customer
Service
Cost

13. Ciuci Consulting 13
Operational efficiency is a function of simplified, standardised and consistently
executed business processes across the entire bank. When addressing operational
efficiency, three questions must be answered:
• How can human capital management be effective?
• What is the best way to manage business processes?
• What does it take to deliver superior customer service?
Human Capital Management
The human resource question can be answered from two perspectives; capacity build-
ing and performance management.
It had been observed in the past that employees were promoted based on their ability
to drive deposit volumes and not for their overall performance. This trend led to peo-
ple with limited experience in key positions, learning by trial and error in functions
which allow for low margins of error. Competence should be developed by specific
attempts to build capacity and improve human resource quality.
Capacity building is not a function of training alone as is generally believed. Banks
need to understand that people are their most important resource and that factors
that determine the performance of any employee can be managed and improved.
Employees have personal career goals as banks have corporate goals. Where these
two goals meet will determine how far human capital development in any bank will
go. For the management of the banks to succeed in capacity building, they need to
invest in the personal development of their employees. They need to build the train-
ing programmes and initiatives around the work schedules and skill sets required.
A well planned training curriculum could help improve knowledge and increase the
time for personal development of employees, positively impacting the profitability of
the company.
Performance management systems need to be built to down play the deposit driven
mentality of the system as a Key Performance Indicator (KPI) and focus on a com-
prehensive measurement of all banking required skills that should form part of the
personal development goals of the employee. At the beginning of the year, employees
should outline their personal objectives and that should form part of their perform-
ance assessment.
Additionally, the work environment should also strive to promote learning by en-
couraging knowledge sharing and mentorship.
Business Process Management
The second part involves building flexible internal processes that are customised to
match the bank’s culture and unique customer demands. Most process related is-
sues are caused by simply ignoring obvious fundamental details. Attention to detail
begins with re – designing operations by mapping processes and considering areas
that are potential pain points and addressing such areas with the required innova-

14. Ciuci Consulting 14
tion. Operational errors are costly and difficult for the banks to accurately measure
because they do not calculate the cost of serving a customer or a transaction.
From a technology perspective, the challenge is to carve out wholistic system func-
tions that enable streamlined business processes. IT solutions need to be integrated
with valuable business processes. Banks must overcome internal barriers and
articulate an integrated flow of business processes and technologies that is consist-
ent with the customers’ demands of the bank. Nigerian banks need to streamline and
automate business processes in a cross-functional manner, identify and establish
relevant performance indicators that reflect the overall value of their products and
services to the bank and most importantly, to the customer.
In managing technology, the banks should follow these two simple rules:
Proper planning
Technology initiatives should not be limited to choosing and deploying IT infrastruc-
ture, without an accompanying rationale, context, and support for the workforce. In
some instances, banks try to automate flawed processes rather than redesign them
according to best practices. Planning begins with the banks accurately articulating
their processes and making sure they meet satisfactory standards before requesting
for the IT solution. Therefore looking at this from the basics, how is the customer
data entry and transaction captured? What are the key performance indicators that
will eventually count in checking the performance of the bank at the end of the year
as it relates to each customer or transaction?
Proper implementation
To avoid mediocre implementation of IT initiatives, solutions need to be integrated
or aligned with the bank’s overall strategy. For instance, if it is a retail bank, it must
consider the capability for serving the huge retail market. Therefore, cost-effective
alternative service channels like mobile banking and ATM machines must form the
core of its strategy.
Customer Service
Satisfying customers should be an issue of utmost importance to all banks. In the
past, banks only focused on growing revenue figures regardless of the value of the
service they offer to customers. However, some successful banks have now realized
that putting customers first helps yield greater results. Banks that adopt a strategic
approach towards managing customer satisfaction and make technological invest-
ments to support specific objectives are likely to achieve higher rates of customer
retention, faster growth and increased profitability. Banks need a combination of
customer care and customer service to deliver a pleasant customer experience.

15. Ciuci Consulting 15
Figure 6: A Sample
Customer’s Experience Customer arrives the bank premises Customer manages to park, then heads to the
in a Local Nigerian Bank and can’t find parking space. entrance and meets a long queue of customers.
When it gets to the customer’s turn the door
malfunctions.
20 + minutes later, the server is finally up but Customer finally gets in and joins the
the account officer who needs to confirm the long queue, only for the server to go
cheque has gone marketing and cannot be down at the customer’s turn.
reached on phone due to network problems.
Finally, as the customer is about to get paid, the guard walks in and rudely demands
that the customer needs to re-park.
Service is a vital, multi-dimensional ingredient of the relationship between custom-
ers and their bank or more especially, their branch. Word-of-mouth recommen-
dations are a valuable source of new business and is often based on the range of
services available and delivered. It is therefore an important function for a bank to
monitor the quality of service given to customers on a daily basis; to have available
an occasional measure of the levels of service available at individual branches. Good
service, which is what every customer longs for, could begin with providing a good
ambience for transactions and to things even as “seemingly insignificant” as provid-
ing ample parking space for customers.
Figure 7: The Pillars
of Customer Loyalty
The Bank’s Role The Customer’s Response
· Understand the value of different · Higher Percentage of Wallet share
segments of their customers · Customer Loyalty
· Integrate customer service into their · Word of mouth recommendation
overall score card
· Put the right people policies in place
to ensure first-class service delivery
· Set the right priorities for investment
in people and technology
· Drive service through innovation
· Integrate customer service into the
overall scorecard of employees
Source: Ciuci Consulting

16. Ciuci Consulting 16
Nigerian banks have to pay close attention to customer service processes and consid-
er ways to improve them. They need to move quickly with the new trends in technol-
ogy that eliminate some of the routine tasks. This will provide employees more time
to deal with customers.
In a survey conducted before the recent intervention by the CBN, service was one of
the top two important considerations for customers.
Figure 8: Top 3 Factors that
would prompt a switch in
bank (n=440)
Service
1st choise Reliability
2nd choise
3rd choise Location
Trust
Cost
Convenience
Ease of Transacting
ATM
Knowledge of staff
Product Range
Internet/mobile
Brand perception
Bank Closure
Cultural Affiliations
Look/cleanliness
0 50 100 150 200 250 300

17. Ciuci Consulting 17
Figure 9: Reasons for Service
Using Bank for Non-
Account Transactions Reliability
(n= 240)
Convenience
1st choise
Location
2nd choise
3rd choise
Trust
Ease of Transacting
Product Range
Cost
Internet/mobile
Knowledge of staff
ATM
Look/cleanliness
Brand perception
Others
Cultural Affiliations
0 20 40 60 80 100 120 140 160 180
Figure 10: Reasons for
Choosing Future Bank
(n= 14)
Location
Service
1st choise
2nd choise
reliability
3rd choise
Trust
Convenience
Cultural Affiliations
Brand perception
Look/cleanliness
0 2 4 6 8 10 12 14

18. Ciuci Consulting 18
A final word
Given the changes in the agenda of the regulators, the Nigerian banking landscape
will dramatically evolve in the coming months. Evidence of this lies in the CBN’s
focus which essentially is designed to improve the quality of banks, restore finan-
cial stability, enable a healthy financial sector, and ensure that the financial sector
contributes to the real economy. Banks that accept the future for what it is, as laid
out by the regulator will be partnering with CBN to work towards achieving these
objectives. It is in the interest of CBN that banks are supported in their endeavors,
that necessary rules and regulations are designed such that banks can thrive. This
means clear communication on all issues in the interest of both international and
domestic stakeholders, on required risk capital per activity and balance sheet lever-
age ratios, on the requirement of implementation of governance, compliance and risk
management policies (not only having a policy on paper). Banks also require active
CBN-support when implementing, so that outcomes actually do comply. CBN also
has a role in promoting the further development of domestic capital markets at a
higher level of sophistication and in different asset categories.
In addition to strategic renewal and operational transformation, implementation of
rules and regulations at the banks will come at a cost, however this cost is necessary
to come to a more solid, efficient, effective and lasting banking system.
To conclude, discussing the changing landscape and its actors, the banks may want
to consider instituting an umbrella organization to take care of non-competitive is-
sues, which concern the whole financial sector such as continuing education, interac-
tion with law makers and increasingly engaging with international counter parties,
to show progress and opportunities in the Nigerian financial sector.

19. Ciuci Consulting 19
References
Inam Wilson
Regulatory and Institutional Challenges of Corporate Governance
In Nigeria Post Banking Consolidation
Nigerian Economic Summit Group (NESG) Economic Indicators Vol.12 No. 2
April – June 2006
Code of Corporate Governance for Banks in Nigeria Post Consolidation
Central Bank of Nigeria (CBN)
2006
Committee on Corporate Governance
Code of Best Practice for Corporate Governance
Bank of International Settlements (BIS)
September 1999
Anil Shivdasani, Marc Zenner
Best Practices in Corporate Governance
– What Two Decades of Research Reveals, Salomon Smith Barney
August 2002
Charles Teschner, Peter Golder, Thorsten Liebert
Bringing Back Best Practices in Risk Management Banks’ Three Lines of Defense
Booz&Co, 2008
Russell Walker,
Fortune Favours the Well-Prepared
Financial Times
January 29, 2009
Governance, Risk, Compliance Series
Global Best Practices
PricewaterhouseCoopers, 2005
Abimbola Smith, Kingsley Aigbe
The Nigerian Banking Sector... What Next?
Chapel Hill Denham Analysis
January, 2010
Microsoft
Banks Steer Through A Maze Of Customer Interactions:
Business Process Management Takes The Wheel
http://www.microsoft.com/industry/financialservices/
banking/businessvalue/tgbparticle.mspx
3rd June, 2010

20. Associate partner
Dr. Eelco Fiole
Analysts
Charles Idem
Emmanuel Tarfa
Funmi Carew
Ifeoma Monye
Fola Onasanya
editorial@ciuci.us