By Tinevimbo Santu
Zimbabwe’s financial services sector has a complicated history with its customers. The sector has experienced episodes of instability, the worst episode probably being the one which saw a number of financial institutions collapsing in 2003/04.
Customers lost their deposits and deposit insurance did not come through for Zimbabwean customers at a time when they needed it the most. Financial liberalisation had ushered in a number of domestic players into the sector but due to a host of factors among them structural weaknesses within the sector, speculative activities by the institutions, corporate governance malpractices etc, most of these institutions collapsed during this period.
Customers were left to pay a hefty price and their trust in financial service providers suffered a huge blow.
In 2007/08 the same customers had their bank balances decimated in the changeover from the Zimbabwean dollar to a multi-currency system.
The multicurrency system was a short-lived success which was punctuated by the introduction of a surrogate currency, the bond note with the government claiming it was some kind of export incentive for exporters to earn the much-needed foreign currency.
As expected by the generality of Zimbabwean citizens, the bond note project did not end well. Five years down the line and we are back to where we started. Being a marketer of financial service products in Zimbabwe’s present circumstances is an uphill task.
The story of Zimbabwe’s financial services sector is a series of disappointments and in large part explains the serious lack of confidence associated with the sector.
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The financial services customer in Zimbabwe is thus a wounded customer who has endured a lot at the hands of service providers. The relationship that exists between customers and service providers is a fragile one given the history shared.
The starting point in mending that relationship requires going back to basics, going back to the drawing board as it were. No matter how dynamic the operating environment is, there are always certain things that remain constant.
A customer in Zimbabwe and a customer anywhere else in the world will always have certain shared characteristics by virtue of them simply being consumers of financial service products. The first step in solving a problem is admitting that you have a problem and the second logical step from that is understanding the problem at hand.
The problem in Zimbabwe’s financial services sector right now is a crisis of confidence. Customers simply do not trust financial service providers.
In the past decade, the financial services industry has gone through a metamorphosis of great proportions as the financial service product as we know it has taken on a fluid form never seen before.
Gone are the days when a financial product could only be offered by financial institutions, traditionally banks and insurance companies. Information and communication technology has helped usher in a new player into the fold, mobile network operators (MNOs), who have stepped into the arena and completely disrupted the way financial services are produced, packaged and consumed. The coming in of mobile money has given the disgruntled Zimbabwean banking public a worthy alternative.
The provision of mobile money by MNOs is a game changer that requires a new way of looking at the marketing concept. The way in which the financial services landscape has become reconfigured in recent years has forced players to rethink the way they approach the marketing function within an institution.
One way of looking at things is to come up with a way of marketing that gives a whole new meaning to the “customer is king” concept because this is something that has been reduced to mere rhetoric in marketing literature. MNOs in Zimbabwe in particular Econet, have presented the market with a way of marketing that focuses not much on promises but rather on simply walking their talk.
The “Ecocash: Your phone, your wallet” campaign was executed and delivered in such a way that many Zimbabweans can testify today that EcoCash has lived up to its promise.
One way of dealing with increased competition in the financial services market is to place ‘the financial services customer’ at the centre and let everything else revolve around the customer.
The way a financial institution designs, advertises, prices and distributes its products should be informed by the type of customer they seek to target or are already serving. While there already is extensive literature on consumer behaviour, it is important for service providers to appreciate the dynamic nature of the environment they are operating in and how that environment is continuously shaping the way in which the financial services customer behaves. In practical terms, it is of paramount importance for financial service providers to have an intimate appreciation of both the setting within which the product is being provided as well as the type of customer they are dealing with.
A cursory look at the financial services market in Zimbabwe will show you that Zimbabweans are more invested in buying funeral cover products from service providers such as Nyaradzo than they are in buying medical insurance products, investment products or other insurance products. It would appear that Zimbabweans worry more about burying their dead and also being buried with dignity than buying investment products such as stocks and unit trusts or medical aid cover for that matter.
One has to try and understand the dynamics driving this kind of behaviour in the market. Part of it could be the level of sophistication the local market possesses at the moment and what customers consider to be “important”. Capitec Bank South Africa believes that “Simplicity is the ultimate sophistication”.
Sometimes the genius of a solution to a problem lies in its simplicity. Maybe the financial services customers in Zimbabwe’s current context are at a point where they are after simple solutions to what they may consider to be real problems, for example, funeral cover. A unit trust investment or life insurance while very useful in theory may be seen as an abstract solution to life’s problems. The simplicity of mobile money, for example, in terms of day-to-day use might explain why mobile money in Zimbabwe and other parts of Africa was able to speak in a language that customers within the African setting could understand. It spoke to the realities of people’s everyday life in a way that traditional bank products had failed to do for years
Phil Levin analyses how EcoCash, only after 18 months of operating, was already altering the financial services landscape in Zimbabwe with 2,3 million Zimbabweans already having registered for EcoCash mobile money accounts, outnumbering all of Zimbabwe’s traditional bank accounts combined at that time. According to Quartz Africa (2019), there is nowhere else in the world that moves more money on mobile phones than Sub-Saharan Africa. They state that the region is currently responsible for staggering 45,6% of mobile money activity in the world an estimate of at least $26,8 billion in transaction value in 2018 alone.
Mobile money in Zimbabwe and in Africa at large has just taken a life of its own and in countries like Kenya, mobile money outage is national news. According to Quartz Africa (2019 ), the value of mobile financial services in Africa has grown over 890% since 2011 and continues to grow unabated. One way to explain the growth of mobile money in Africa is probably that the mobile phone has democratised the financial services opportunity.
Mobile network operators have simply leveraged on the convergence of ICT, the mobile phone and financial innovation and come up with mobile money, probably one of the greatest innovations ever on the African continent. This brilliant innovation was met in Africa with a hunger for financial inclusion that had long been felt but the traditional financial systems had failed to satisfy which in part explains this huge uptake of mobile money.
The setting within which the product was introduced was already fertile ground for such a product.
Financial inclusion had remained on the agenda of the financial services sector, not only in Zimbabwe but across Africa for far too long and it took mobile money to come and deal decisively with the matter.
African customers identify with mobile money in a way they have never identified with traditional bank products. According to IFC Digital Access (2018), the impressive growth in financial inclusion in Sub-Saharan Africa over the last few years has been driven primarily by mobile money and agent banking.
The report states that to a large extent, the growth in traditional financial institution accounts lag behind and in the instances that they increase it is through leveraging on the mobile money revolution.
Digital Access (2018) states that the customer is the new boss in town. As the lines between providers are becoming increasingly blurred, users do not necessarily care about who or what kind of entity the provider is, as long as they can access the services they desire.
The report also states that more than ever before, the market for financial services is an open field and the true winner is the African consumer who is no longer excluded from the benefits of financial services.
There is an argument in financial services marketing literature (Brown,1995) in Estelami (2007) that the heterogeneity of the marketplace has brought about a proliferation of products and heightened the power of the customer in the exchange process.
This argument essentially places the customer at the heart of the production process. Those financial service providers who are able to demystify the financial services customer and meet them at their point of need are ultimately the ones that are going to make it big in the prevailing financial services terrain.
