LUESBY: Bank customers’ woes still mounting

Delegates follow proceedings during a meeting with the Kenya Bankers Association, the lobby for lenders. FILE PHOTO | NMG 

By JENNY LUESBY

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Summary

• Money gets stolen from our accounts – and why have the banks still not cracked this one, a consequence, predominantly, of internal staff fraud.
• The interest rates are on a higher spread than almost anywhere in the world.
• Our banking charges, likewise, compare badly with almost everywhere: be it for a salary payment or the cost of a cheque book, we pay more.

Kenyan banking service is not a glorious spot of wonder in our national firmament. Reports citing our banking as the worst in the world for customer service have prompted some array of actions in the last few years. But, to this day, we, as consumers, suffer a very bad deal indeed on banking service.

And the problems are everywhere. New systems get introduced on ATMs asking for confirmation of a concluded transaction. If the prompt isn’t responded to fast enough, the card gets swallowed, and then takes multiple branch visits, calls, and very many days, to get back.

Correctly directed inwards payments are bounced, and then days need to be spent pleading the bank to investigate and rectify. Outwards ‘real-time’ transfer instructions are like a request for ‘some transfer at some point of your pleasing’. Time and again, they don’t get executed for, sometimes, days, leaving other bills unpaid and costs incurred.

Money gets stolen from our accounts – and why have the banks still not cracked this one, a consequence, predominantly, of internal staff fraud? The interest rates are on a higher spread than almost anywhere in the world. Our banking charges, likewise, compare badly with almost everywhere: be it for a salary payment or the cost of a cheque book, we pay more. The exchange rates have a wider spread than almost anywhere else, from the buy to sell rates, sometimes a full 10 per cent (which is ludicrous, and a handicap to nearly all of our exports).

Then there are multiple other irritants. A bank I am just leaving has credit-check people based in India call me after virtually every online debit card transaction: even a Netflix subscription. These, sometimes daily, phone calls come as I sit in meetings, am driving, and even when I’m in the bathroom, and cannot be stopped without more bank visits, they explain.
Account opening is, itself, a sometimes nightmare journey.

And to cap all else, our banks sometimes just go into receivership, leaving us with funds frozen more than a year later. One of our banks in receivership is even charging customers on their frozen funds, on accounts it refuses to close, despite their dormancy.

If customers don’t pay in extra funds to cover the charges, the bank is calling that an unauthorised overdraft, and charging charges on the charges on the frozen funds that customers cannot reach or use: who can think that is a viable business practice, by any criteria on earth?

But it’s the Central Bank’s rules, according to that bank, so many of us are clocking up extra bills too on our frozen funds.

And who actually cares? And here lies the heart of the problem: no one does. In 2013, following an Ernst & Young report that more than half of Kenyan customers were dissatisfied with basic transactions, compared with a third globally, we saw some attention from the industry to resolution.

The Kenya Bankers’ Association did a survey on customer complaints and found they took an average of one to two weeks to resolve, which is way too long to have money missing or stuck. The banks responded by launching an internal dispute resolution mechanism, but with their eye firmly on heading off court cases that cost them Sh500,000 a time.

For the rest of us, the journey is little improved. We have no banking ombudsman to handle customer complaints. The law and regulation just is not built to help customers. But competition can yet help: we have more than 40 banks. And some are better.

It costs Sh3,000 to get the annual ThinkBusiness survey on banking customer service. The same organisation also offers updates on the banks with the highest charges, available free.

If we can’t open a channel to address our customer misery, we can at least move our money, and the bank’s profits, to those who do best, saving ourselves days of wasted nagging, bank visits and costs. Just until banks have some customer service rules to keep.