For decades, banks have relied on a sales-led approach, driven by aggressive customer acquisition strategies and strong relationship management. However, with the rapid rise of digital banking, fintech innovations, and changing consumer expectations, the question arises: Should Nigerian banks transition to a product-led model, or is a sales-led approach still the best fit?
This article explores both models, compares Nigeria’s banking landscape with global trends, and offers insights into the best path forward.
Understanding Sales-Led Banking
A sales-led banking model relies on direct customer engagement through relationship managers, in-person interactions, and cross-selling financial products. This traditional model focuses on high-touch customer relationships, ensuring that clients receive personalized service while generating revenue through product bundling, fees, and commissions.
Key Features of Sales-Led Banking:
- Branch-Driven Sales: Banks use their extensive branch networks to acquire customers and offer services.
- Relationship Management: High-net-worth and corporate clients rely on dedicated managers for financial planning.
- Cross-Selling: Banks offer bundled products such as loans, investment accounts, and insurance.
- Commission-Based Revenue: Employees are incentivized to meet sales targets through commissions and bonuses.
Challenges of Sales-Led Banking in Nigeria:
- Limited Scalability: Customer acquisition depends on physical locations and human resources.
- High Cost of Operations: Maintaining branches and staff results in significant overhead costs.
- Long Onboarding Process: Customers often experience delays due to paperwork and manual processes.
While sales-led banking has been effective in Nigeria for decades, consumer behavior is evolving, making a product-led approach more relevant.
What is Product-Led Banking?
A product-led banking model prioritizes the product experience, enabling customers to onboard, use, and engage with banking services seamlessly without heavy reliance on sales teams. The product itself—whether a digital banking app, a seamless lending platform, or an automated savings tool—drives customer acquisition and retention.
Key Features of Product-Led Banking:
- Self-Service Banking: Customers can sign up, transact, and manage finances independently via digital channels.
- Technology-Driven Growth: AI, machine learning, and data analytics personalize banking experiences.
- Freemium Models: Some digital banks offer free basic services while monetizing premium features.
- Customer-Centric Innovation: Features are constantly improved based on user behavior and feedback.
Examples in Nigeria:
- Kuda Bank: A fully digital, branchless bank offering fee-free banking.
- OPay & PalmPay: Super apps integrating banking, payments, and lifestyle services.
- Flutterwave & Paystack: Payment platforms simplifying transactions for businesses and individuals.
Advantages of Product-Led Banking:
- Scalability: Digital products reach millions with minimal operational costs.
- Faster Onboarding: AI-powered KYC (Know Your Customer) processes enable instant account openings.
- Data-Driven Personalization: Algorithms tailor banking experiences based on user behavior.
However, product-led banking also has challenges, including cybersecurity risks, regulatory concerns, and customer adoption barriers among non-digital-savvy users.
Global Banking Trends: Where Does Nigeria Stand?
Globally, the banking industry is shifting toward product-led growth (PLG):
- Neobanks like Revolut, N26, and Chime have disrupted traditional banking with seamless, digital-first experiences.
- Big banks (e.g., JPMorgan, HSBC) are integrating AI-driven financial services and embedded banking.
- Super Apps like WeChat and Alipay in China offer banking as part of everyday digital experiences.
Compared to global trends, Nigerian banks still lean toward a sales-led model, with a slow but growing adoption of digital transformation. While fintechs and neobanks are leading the shift toward product-led banking, most traditional banks struggle with legacy systems, regulatory constraints, and customer trust in fully digital services.
What’s the Best Approach for Nigerian Banks?
Rather than choosing between product-led or sales-led, Nigerian banks should consider a hybrid approach that integrates both models.
For Corporate and High-Net-Worth Clients: A sales-led approach remains essential, as these customers value relationship managers, tailored financial advice, and premium banking services.
For Retail and Digital-First Customers: A product-led approach will enhance user experience, improve efficiency, and reduce costs, making banking more accessible to the masses.
For Long-Term Growth: Banks should invest in AI, automation, and self-service banking, while still offering personalized customer support for complex financial needs.
Conclusion: The Future is Product-Led, But Not Without Sales
While traditional sales-led banking has been effective in Nigeria, the future is digital-first. As fintech innovations, customer expectations, and regulatory frameworks evolve, banks must embrace product-led growth while maintaining a human touch where needed.
To stay competitive, Nigerian banks must:
Digitize their services while simplifying onboarding and transactions. Leverage data-driven personalization to improve customer engagement. Offer seamless omnichannel banking, integrating both digital and in-person experiences.
By striking a balance between product-led innovation and relationship-driven sales, Nigerian banks can drive sustainable growth in an increasingly digital world.
