How Nigerian Banks Can Create and Capture More Value With Chatbot: A Conversation With Emmanuel Mogaji, UK-Based Researcher

What looks like an Automated Teller Machine was invented in 1960 by Luther George Simjian, an American. Bankograph was the invention and allowed customers to deposit cash and checks into it. Seven years later, the real ATM was set up in London by a local branch of Barclays Bank. The creation of the real ATM was credited to John Shepherd-Barron, a Briton. Indeed, the invention is a blessing to the global banking industry and customers have experienced a number of difficulties in accessing their money.

Like other countries, Nigeria joined the league of countries with the use of the machine in 1989. Various sources indicate that the defunct Societe Generale Bank Nigeria sets up the first ATM, with the assistance of the National Cash Registers. According to our analyst, the installation sets the foundation for more adoption of innovative technologies by generations of banks in Nigeria. In this regard, the Nigerian banking industry cannot do without playing a global best practices game towards value creation and capturing.

From the ATM to online banking services, having seen the benefits, customers’ demands are growing globally. Since ATM seems to be obsolete to many customers [due to a number of factors], in the last few years, the demands have been personalised banking services and superior customer engagement. Hence, the emergence of chatbot. It is a tool that has been seen as a better alternative to having physical contact with banks.

Like the Societe Generale Bank Nigeria, information has it that the United Bank of Africa introduced the first social media chatbot in 2018, named Leo with the intent of enhancing customer services. Our checks show that other banks; Rafiki (Ecobank), Sami (Stanbic IBTC), Oxygen (Keystone Bank), Temi (FCMB), Ivy (fidelity Bank), Octopus (Heritage Bank) and Tamada (Access Bank), also have chatbots for the same purpose.

From experts and users of the chatbots, there are mixed feelings about the efficacy of the chatbots. For instance, on a social forum, people have appreciated the use of chatbots by the banks. Academic researchers have also had opportunity to pinpoint holes in the processes and people being used to operate the chatbots. In a study, recently published,  AbdulQuadri Abdulazeez from the University of Lagos, Mogaji Emmanuel from the University of Greenwich, Kieu Tai Anh and Nguyen Phong from the University of Economics and Finance Ho Chi Minh City note that “A majority of Nigerian banks now have chatbots that enhance customer engagement and financial inclusion.”

Our analyst speaks to one of the researchers, Dr Mogaji Emmanuel. While the banks seem to join the global best practices game, in the view of Dr Mogaji, “We can say there are huge prospects for the development by the banks but maybe not the adoption by the consumers.” With this view, our analyst notes that there is a possibility that the banks did not consider customers while developing the chatbots. For instance, allowing users to have input at the development stages will go in a long way of enhancing acceptability which has a direct link with the usage. Dr Mogaji sums it up, saying there are “inherent challenges in developing and deploying chatbots in financial services provision.”

Interest Does Not Translate to Adoption

Despite the growing interest in adoption of chatbots globally, AbdulQuadri and others found that 13 (59 %) of 22 banks had a form of a chatbot for consumer engagement and financial transactions. What factors can you adduce for this as most of the banks continue positioning themselves as digital compliance businesses?  Our analyst asked Dr Mogaji.  Key factor here is about jumping on the bandwagon. Financial services provision is being digitally transformed and any bank that is not jumping on these trends may lose out. Another factor is the competition from within the Nigerian market. With some of the big banks launching their chatbot, it has challenged other banks to come up with there. It is however important to note that is not about the quantity of chatbots but the quality of engagement. Thirdly, there are growing number of young customers who are tech savvy, may not want to go to banking hall and do all transactions on their mobile phone. Meeting the needs of these tech savvy customers has also contributed to increasing number of chatbots by financial service providers.

Understanding Customers Psychographics Key to Acceptability and Use

I would say lack of preparedness is a key factor. Perhaps it was the idea of jumping on the bandwagon and not fully understanding the scope and the anticipated demands for its use. Often some of the options in this chatbots are not working. Just like having a website with a home page but the other pages are not connected and there are broken links. Secondly, the lack of understanding about the Nigerian consumer needs. With chatbot, one cap does not fit all. A chatbot working in UK may not be very responsive and engaging within the Nigerian market. There should be an extensive research to better understand the need of the Nigerian customers. Financial exclusion is huge in Nigeria, technology like this can help but we need to have a better understanding to develop and deploy. Third, I would say the human resources to develop this chatbot could be scarce. There is need for training and developing talents with expertise in this kind of technology to understanding the market, it inherent challenges and de able to develop and manage the chatbots.

Availability without Responsiveness

I believe what is worth doing at all, is worth doing well. If a bank has decided to have a chat bot, it is important it commits every possible resource to make this work. It is not surprising to see some banks do not have chatbot. It is not compulsory, therefore, irrespective of the challenges, I believe banks that have invested in chatbot should make it work and meet the needs of the customers. This is one of the reasons for carrying out research like ours, to give an overview of the industry and provide a clarion call for the banks about how and where to improve. The main idea of chatbot is its level o  responsiveness and engagement. These are general expectation of the chatbot and therefore Nigerian banks chatbots should not be different.

Verification and Privacy

Key thing is communication and assurance. Banks need to communicate the presence of the chatbot. They need to let customers know the huge prospects of chatbot in enhancing their experiences with the banks. Communications also involves demonstration and some form of endorsements for people to know the chatbot is available and it can be useful. Assurance however is important. This is provided the chatbot is responsive and can meet the need of the customers. Customers’ needs to be assured that the chatbot is safe, responsive and it can be trusted. In addition, understanding the usage, through Artificial intelligence can also help the banks to improve their offering on the chatbot. They will be able to identify what customers are finding relevant and those things can be improved.