Understanding African consumer behaviour in the financial services industry
The banking industry worldwide has experienced sluggish growth lately, yet in Africa the situation is actually the opposite.
The African banking market is the second fastest growing in the world and the banking industry is the second most profitable in the region. Nonetheless, in order for the growth to continue, banks need to understand African consumer behaviour.
Banks in Africa have a fair share of challenges to overcome, yes, but the opportunities the continent offers are growing, such as the widespread mobile phone coverage that will undoubtedly accelerate banking revenue growth in the next five years. The rising consumer market has fuelled the country’s growth, and according to McKinsey’s Africa Consumer Insights Center, “consumer-facing industries are expected to grow by $400 billion by 2020”.
Nonetheless, Africa is a complex market of 53 countries where more than 2,000 dialects are spoken. Needs between northern consumers vary from those in sub-Saharan countries. Banks and insurers are pressured into providing more personalized products and services, but in order to do that it’s crucial for them to discover patterns in African consumer behaviour.
Identifying patterns among African consumers
The 2019 Global Financial Services Consumer Study conducted by Accenture analyses patterns in the African consumer market to identify common characteristics among Africans, what they value, what sets them apart and the way they wish to engage with financial institutions.
The study identifies 5 characteristics of African consumers when it comes to financial services:
Propositions must be tailored to meet their core needs
Approximately 50% of consumers expect institutions to propose services aimed at fulfilling their needs instead of adopting traditional and generic banking services. Their propositions must be well-rounded, not considering the service exclusively, but any other related service the user might need.
They are interested in personalized services
Half of African consumers want advice tailored to their specific situation, contemplating everything from spending habits analysis to advice on how to save more money or manage it more efficiently.
In exchange for better deals and quality advice, consumers are willing to share data
They want offers and benefits based on the places they most frequently shop at or priority services such as fast-track insurance claims settlements.
They want better integration between physical and digital banking
Over 50% of respondents want a comprehensive experience, where they could switch physical and digital channels in a more organic way.
Their trust in financial institutions is high and continues to grow
Trust in financial institutions has increased over the last year, but in order for this trust to continue to grow, security measures to protect their data must be a priority, as should personalized services.
These characteristics are spotted in every consumer, yet according to Accenture there are four very clear and different consumer personas that emerge from the results of this survey that couldn’t have been identified merely by traditional demographic segmentation techniques. This further advances the notion that the traditional approach to earn clients is no longer suitable and companies must change their viewpoint in order to stay relevant and profitable.