1.1 Background to the Study
The banking industry is a service oriented one. For any service to be desired, there must be a conscious need for it, such a need must be generated by the knowledge of its ability to satisfy customers, requirement (Okigbo, 1990). Generally, Banks are run on the basis of profits motive, and they all know the importance of public consent to their continued existence and survival. People are generally influenced by their belief and impression of certain banks and how they perceive these banks determines the way they will patronize them.
Banks should strive to make plans on how they expect to be perceived by the members of the public, and this image can be communicated through the services offered by the bank; the attitude of the bank’s employees as well as the activities came out by the bank. Since “reputation” is very important in a bank’s growth, the role of public relations cannot be under-estimated. At best its practice and importance are recognized more as a useful effective tool of corporate image promotion. The attitude of the Public towards an organization will determine its credibility. These attitudes could be positive or negative depending on how the organization earns the reputation or image it deserves.
The purpose of public relations practice is to establish two-way communication seeking common ground or areas of mutual interest, and to establish understanding based on truth, knowledge and full information. The scale of activity to promote good public relations may vary considerably according to the size and nature of the interested parties, but the philosophy, the strategy and the methods will be very similar whether the public relation program is designed to influence international understanding or to improve relations between a bank and its customers. Public relations in the banking industry is a function of management. It can contribute to the successful operation of a bank in proportion to the extent to which it is allowed to play its part. This fact has been accepted by most large companies, but many banks in Nigeria have been slow to realize the advantages of organized public relations (Nwude and Uduji, 2013).
There could be two main objectives of public relations in a banking industry. The first could be to establish contact with three important sections of the public: its customers, its shareholders, and its employees; securing the mutual understanding and cooperation of these three groups is essential to success. The second objective could be to promote the bank’s services and products in highly competitive world. It is necessary to draw a distinction between a public relations attitude and public relation practice. Both are required in the banking industry.
The current attitude toward public opinion should be presented from top to bottom in a bank; the practice should be the responsibility of professionals trained in the art of communication. Public relations in a bank requires a list of priorities in order that available money and manpower are deployed to maximum advantage. It is easy to be tempted into pursuing projects that might yield fruitful results; but there may be more important problems which should be tackled first. The order of priority will not necessarily remain constant, and will require periodic reassessment. Some very effective public relations can be carried out in the banking industry-both by banks with their own internal public relations departments and by using consultants- but the general level of attainment has been uneven. For example, one bank is well organized for press relations and employee relations, but neglects other aspects. Another bank devotes all its attention to community relations. The best result can only come from a properly coordinated plan that is based on a carefully chosen list of priorities (Nwosu and Uduji, 2009).
The importance of public relations to management decision making in banks was recently emphasized through the observation of the operation and function of a public relations department in some other industries in Nigeria. The role of the public is having on decisions made by top management in the banks was readily evident in more than a dozen areas. Technical advancement in the communications field, creating an accessibility to information not available to previous generations, is one of the reasons for an increasing national awareness and interest on the part of the public in Nigeria. An exploding national population straining water, land, forest, and mineral resources, however, is probably the main reason for the public interest in banking industry decisions. Management in banks is also finding that it must know much more about the public and the various defined or specialized interest groups within the public which can have an impact on the banks concerned. Public influence can be exerted through the development of government regulation; legal system decision; lobbying efforts of special interest groups; press coverage, editorial comment, and published letters to the editor; through the withdrawal of bank product support; and by public demonstration (Uduji, 2012).
Bank Management in Nigeria is rapidly learning that it is less costly to know the probable reaction of its public to decision so that courses of action can be planned in advance to educate and promote understanding. It is also learning to avoid decisions causing public reaction that will lead to increased legislation or regulation. Banks are learning that by ignoring or improperly evaluating public reaction, management decisions can be made which in the long range may be detrimental to the welfare of the banks. An example of the area in which public opinion and concerned are directly affecting management decisions in the banking industry in Nigeria, is in the protection of investors.
Extensive steps are taken to keep investors and potential investors, through investment analysis, informed about management decisions and the bank’s financial condition. This specialized sector of public relations has developed rapidly during the last few years in Nigeria. It is perhaps more correctly described as “Investor Relation”. In this field, the public relations consultancy, or in-house department, will usually also be responsible for the financial advertising which can become very important in bid, takeover or right issue situations. It is essential to be familiar with the increasing number of disclosure regulations and insider restrictions applicable to all deals affecting the stock exchange. Different rules may apply to stock exchanges in other countries (Uduji, 2007; Nwude and Uduji 2013).
Previously, in the banking industry in Nigeria, the sending out of the annual accounts and balance sheets was often the only contact between a bank and its shareholders. This annual report, a legal requirement, was often little more than a mass of figures and statistics. It is now becoming common for public relations advice to be sought in the preparation of the report, in order that it may give as much information as possible to shareholders. The design and typography of annual reports can be improved beyond all recognition in the next few years.
In addition to financial public relations in the banks, customer relations need urgent attention. Relations with customers depend very much on quality, price, and delivery service, but also very directly on the reputation of the bank in Nigeria. Public relations can play a vital part in safeguarding a reputation or in building a “new image”. It can also help to improve methods of communication with existing and potential customers of the bank.
1.2 Statement of the Problem
In almost all the definitions of the word “bank,” there is an overwhelming emphasis on people, that is, the customers who patronize the bank. This crystallizes the fact that without the customers, there will definitely not be a bank. They are established to service the needs of their customers, be it individuals or organizations. Because of their service-oriented operations, banks thrive on the multitude of patronage. Unfortunately in many banks, the customers are not accorded their due respect; customers are made to stand on long queues for a long period of time. Also, some of the cashiers that are available execute their duties with non-chalant attitude. This makes it difficult for customers to predict how much time that they will spend at the bank, thereby making banking a dreaded experience for them. It is on this basis that this study is being conducted to infer how competent the new generation banks are in terms of efficient, effective and quick service delivery.
1.3 Objective of the Study
1.4 Research Questions
The following research questions were generated for this study:
1.5 Significance of the Study
This study is invaluable to the banking sector in Nigeria. The result of this study provides some banks a knowledge of how their customer relations activities are rated by their customers. It also provides the feedback that is most needed by banks from their customers. It also enables banks to re-evaluate themselves and re-strategize if need be, so as to maintain and, most especially, encourage the patronage of the current and potential customers.