Customer complaints registered with five leading Nigerian banks have surged by a staggering 117 percent year-on-year, as of June 2023, according to data obtained from the Nigerian Exchange Limited. The increase in grievances has raised concerns about the quality of services provided by these financial institutions. The complaints have notably impacted the total financial claims filed, which have risen by a whopping 289 percent compared to the previous year.
The affected banks, namely United Bank for Africa (UBA), Fidelity Bank, Access Holdings, Zenith Bank Plc, and Guaranty Trust Holding Company (GTCO), have all experienced significant spikes in customer complaints and subsequent claims.
United Bank for Africa (UBA), in particular, witnessed a remarkable 306.32 percent increase in customer complaints, which soared to 1,930,518 as of June 2023, from 475,121 during the same period in 2022. The financial claims related to these complaints skyrocketed to N125.26bn, representing a substantial increase from N4.39bn in June 2022.
Access Holdings followed with a 132.25 percent surge in complaints from June 2022 to June 2023. The complaints escalated to 3,222,907 from 1,387,702, with the disputed amount increasing to N136.75bn from N57.87bn.
Fidelity Bank also saw a notable increase of 77.69 percent in received complaints, reaching 1,010,586 from 568,738. The amount being claimed rose to N55.20bn, marking a 268 percent increment.
Zenith Bank Plc experienced a milder increase of 12.55 percent, with received complaints rising to 247,685 from 220,067 as of June 2022. The amount involved in these complaints was N8.38bn, signifying approximately a 66 percent appreciation over the H1 2022 figure of N5.04bn.
Surprisingly, Guaranty Trust Holding Company (GTCO) saw a decline in received complaints, with a 10 percent improvement from 505,076 in H1 2022 to 453,575 in H1 2023. The disputed amount also dropped to N517.67m from N1.51bn.
The surge in customer complaints coincides with the banking sector’s adjustment to the Naira Redesign policy introduced by the Central Bank of Nigeria. This policy led to an increase in electronic transactions due to a cash crunch.
According to the Nigeria Inter-bank Settlement System’s e-payment data report, the value of electronic payment transactions rose year-on-year by 298 percent to N135.52tn in the first quarter of 2023, compared to N34.04tn in Q1 2022.
Chizor Malize, Managing Director of the Financial Institutions Training Centre, pointed out that the ‘Japa’ trend in the country, referring to the emigration of skilled professionals, is one of the reasons for the decline in services from banks.
Addressing the issue during the launch of a collaboration with online varsity Nexford University in Lagos to fill skill gaps in the sector, Malize stated, “The finance sector is the worst hit when we talk about talent migration. Everyone in this room must have started to face some kind of significant reduction in the quality of services from their financial services providers, and a lot of times, you hear that a lot of the people have left or migrated.”
Dr. Uju Ogubunka, the President of the Bank Customers Association of Nigeria, emphasized the knowledge gap in the financial sector, which he believes has contributed to the surge in customer complaints. This concerning trend in customer grievances highlights the need for banks to address the root causes of these issues to maintain their customers’ trust and satisfaction.