Repositioning the Rural Bank Brand to Attract Non-Users – Executive Director
In the face of growing competition and changes in the banking sector, the Executive Director of the Association of Rural Banks in Ghana (ARB), Ms. Comfort Owusu, called for an operational overhaul of the rural bank.
According to her, the rural bank has been around for more than four decades. During the period, the banking space has undergone many changes due to intense competition in the sector, the commoditization of banking products and services, customer sophistication and demographic changes, among others.
It is with this in mind that she said: “There is a need to reposition the rural banking brand as dynamic, reliable and resilient in order to attract non-users. This includes young people, the upper middle class, clients of defunct institutions and others.
In addition, she said the repositioning was linked to the Bank of Ghana’s program to rename the sector to support rural economic development.
“To this end, the Association of Rural Banks intends to develop and implement effective brand communication and marketing strategies, so that the banking public appreciates what the brand represents in terms of a point of differentiation. of the RCBs. “
Ms. Owusu was speaking at the “20th National Rural and Community Bank Managers Conference” held in Nkwatia-Kwahu, and explained that this will increase the efforts of ARB Apex Bank Limited.
She urged the 145 RCBs to work hard to improve their internal systems and operations, especially in the area of service quality. This, it is believed, will help avoid any communication gap that could dilute the rural bank’s brand.
The theme of this year’s managers’ conference is “Rural banking beyond financial sector reforms and the COVID-19 pandemic”. Ms Owusu said the theme is appropriate, as it will provide a guide on how to leverage the strengths to harness the opportunities presented by reform in the area of the gap created by missing institutions in space. banking, and the need for increased use of technology created by the emergence of COVID-19.
In addition, financial sector reforms and the COVID-19 pandemic are topical issues in Ghana right now, due to their impact on individuals, businesses and the wider economy, more importantly, and players in the banking sector.
In 2017, the Bank of Ghana launched a comprehensive set of reforms to clean up the banking and SDI sectors of the economy, after identifying the prevalence of systemic risks in several financial institutions.
These include severely deteriorated capital leading to insolvency, poor asset quality, severe liquidity crises and poor corporate governance practices, among others.
The reform resulted in the withdrawal of operating authorizations for 420 Financial Institutions made up of banks and SDIs.
The Security and Exchange Commission (SEC) also revoked the licenses of fifty-three fund management companies.
Although BCRs were excluded from the financial sector clean-up exercise, Ms Owusu revealed that they were affected.
She said there was speculation in mainstream and social media about the possibility of the clean-up exercise being extended to RCBs. So this gave rise to panic withdrawals, and BCRs with weak liquidity positions almost suffered a run on them.
“Another negative effect suffered by the BCRs following the reform of the financial sector has been the freezing of funds with disappeared institutions, in particular fund management companies. We appreciate the efforts of the government for reimbursement, ”she said.
With dozens of BCRs still having significant funds stranded with some defunct fund management companies, as the Registrar General has yet to obtain a liquidation order from the court, she urged authorities to speed up the process. .
The provision of funds, she noted, will help improve the liquidity of the BCRs to deepen financial intermediation in rural areas and also support rural economic development.
In addition, the COVID-19 epidemic has also affected the rural banking sector; however, “we were able to provide antidotes to successfully mitigate the negative effects of the COVID-19 crisis,” according to Ms. Owusu.
RCBs performed fantastic in the areas of deposits and asset growth in the midst of the crisis. On a year-over-year basis, total BCR assets increased by 32.4% at the end of the third quarter of 2020, while total deposits also increased, by 38.1%.
It is known that some individual BCRs even increased their deposits by more than 50% despite the challenges brought on by the pandemic. This indicates that the resilience of the sector to shocks has improved considerably.