Banking
How Banks Use Franchise Flags To Toy with Customers
By Kenneth King
Franchising is a business growth strategy with which enterprises reach or serve other territories, which would have been unreached by the original enterprise.
Simply, it offers a license to produce, render service or operate from an originator, innovator or patent holder to another business for the purpose of serving other markets with precisely the same brand.
It applies to the real, services and technology sectors. It has been a globally accepted business norm. Being a norm has made it compulsory for it to be regulated, to ensure proper conduct and acceptable ways of doing business.
CEO, Tesler, Elon Musk said, “Automotive franchise laws were put in place decades ago to prevent a manufacturer from unfairly opening stores in direct competition with an existing franchise dealer that had already invested time, money and effort to open and promote their business.”
This presupposes that for a franchisee to effectively render, manufacture or operate what the franchise offers, the franchisee would have invested in the new territory.
Those who know consider it a vehicle for technology transfer, which helps brands embrace or ride on other brands to delight customers with products or services they otherwise would not have been able to.
Thus, developing economies ride the vehicle of franchising to deliver global brands or services to local markets.
With the Nigerian economy needing to consistently draw from the global economy, particularly Diaspora remittances, Nigerian Deposit Money Banks (DMBs) found good allies in universal money transfer service providers.
Some of such popular franchises in the Nigerian market include, Western Union, World Remit, MoneyGram International, Ria Money Transfer, etc.
Nigerians, particularly those in the Diaspora, their family and friends at home count on such services for safe ‘home remittances’, and allied payments.
One of such is Okiemute Idumagbe, a resident of Sabo, Yaba, Lagos State. She recounts her experience this way:
“I find it hard to understand why some Nigerian banks market some products and services they have no intention of delivering on.
“Imagine that the two oldest banks in Nigeria, First Bank of Nigeria (FBN) and Union Bank of Nigeria (UBN) have branches at the Sabo roundabout. They stare at each other at the Commercial Avenue end of the area.
“Their facing one another leaves the impression that the management of the banks were competitively aware and would seek to make customers pitch their tents with one as against the other on the basis of quality service. But it appears that customer-satisfaction ranks low on their agenda.”
Part of Okumagba’s concern is that when she moved to the area, having been maintaining accounts with both banks, she felt good at her banks being nearby. Mentally, she considered that an encouragement in her micro business of exporting African items.
She normally received her payment with the international money transfer services, which the signboard of both banks, assured that they were rendering. Alas, when she had an inflow, she called at both banks, one after the other daily for weeks, before it dawned on her that they were ‘wining her’.
“I went to First Bank and they asked me to complete a form to receive money, which I did. They took their time and coldly informed me that the platform was down and that I should repeat the following day.
“The cycle repeated for maybe thrice before the teller called in the manager who coldly directed, ‘why don’t you try another branch instead of wasting your time here?’.
“On stepping out of FBN, I made for Union Bank, which also had signs that Ria services were available there. And the same cycle repeated.
“On my third attempt at UBN, I eavesdropped on their conversation that the service was not active at that branch. My ear tingled and I went to a new generation bank about two bus-stops from Sabo to withdraw my money.”
A corporate communications manager with a pan African bank, who spoke under anonymity, confirmed that this situation was common with Nigerian banks because as, Musk pointed out operating such franchises require huge investment, including the technology on which they run. So when banks discover that uptake or patronage of a particular service on which it is investing heavily does not justify the investment at any branch, they can reconsider it without altering their signboards.”
According to Musk, an existing franchise dealer would have invested time, money and effort to open and promote the business.
Analysts who spoke to Biztellers reason like Musk that the investment in marketing these licensed services might be why the banks retain them in the sign-posts, even when such services are absent in any particular branch.
A marketing and branding expert, Jide Okunde, pointed out that in addition to cost, consistency, a major branding requirement is something “no bank can look away from”.
He noted that “Global and national businesses carefully design, adopt and register communication materials, including billboards for use across their operations.
“This comes at a huge cost and bestows identity on the business, as part of strategic brand building efforts.
“You will consider that having different signboard of one bank at different branches, or in deed any other business would confuse the public on if the branches are still the same brand.”
Okunde, though like Okumagba does not see any justification in a bank located at a commercial area like Yaba, Lagos, not rendering certain services as promoted on their signboards.
For the branding expert, this constitutes a classic example of how Nigerian banks lower the flags of global franchises and toy with the expectations of the banking public.
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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