Nigeria’s e-banking platform: Innovations for the unbanked

The race for who gets ‘what’ in the financial industry has not just begun, but intense, driven by innovations, as part of battle for soul of the huge number of unbanked and greater share in the electronic banking (e-banking) space.

This is coming on the back of a global recognition that the future of banking and attracting a huge market share lies in the use of not just technology, but innovative ones that create demand for consumers.

Indeed, from consumer perspectives, the attraction is in offerings that the bring costs down, as well as unpredictable charges beside comfort, convenience, seamlessness and availability as basics.

It is indeed difficult to imagine any sector of the Nigerian economy that has undergone as much transformation in its day-to-day operations as the banking sector. With increasing sophistication in the lifestyle among its major clientele- changing tastes, and demanding official schedules among others, the sector operators have really stretched themselves in their adaptations aimed at meeting the needs of their demanding clientele. Yet, ideas are not running dry.

One untapped area many observers believe still needs attention has remained the rank of the unbanked in the population. The question has been: how do we reach them?

These also are more about the masses- the low-income earners, artisans and traders whose daily returns are in the range of hundreds, but who as it were, need banking services. This consideration has made the average bank to introduce more innovation, to redefine its basic rules of engagement, as a fundamental way of remaining relevant in a sector choking with competition.

But in recent times, there have been the sighting and mention of products and initiatives like “Nairawise”, banking software upgrade to world-class and Facebook Account opening in association with First City Monument Bank, with high-value proposition.

It easily comes to mind that the introduction of e-banking by the Central Bank of Nigeria (CBN) has seen a drastic reduction in time spent by customers on transactions. These days, by merely logging into the Internet and pressing some prompts, a bank customer can conclude his transactions in record time and in a most convenient atmosphere.

Electronic banking is a driving force that is changing the landscape of the banking industry, as it has blurred the boundaries between different financial institutions, enabled new financial products and services and made existing financial services available in different packages.

As with other initiatives of the regulator, this one has been open to criticism. While many are of the view that it is revolutionizing the banking industry, others see it as simply complementing the physical banking branches, but then creating fresh problems.

Truly, system failures and poor connectivity given the comparably low technological development in the country are some of the challenges hindering the innovations.

What is not in dispute however, is that for some organizations that know how to deploy it, the result is plausible.

For example, FCMB’s electronic banking has been recorded increased efficiency in its banking services. It accounts for the drastic reduction in operating costs, both on the part of the bank and customers.

While the requirements for online banking services differ from bank to bank, however, it is important to have an internet-enabled device, which allows access to one account(s) and some bank service interfaces.

CBN, setting the template, monitors the technological acquisitions of banks to ensure that all banks that operate e-banking work within the ambit of integrity and the required data confidentiality.

However, of particular interest is FCMB’s response to all of these developments. It is quite innovative, coming in the form of an online account, a product known as FCMB e-savings Account. Although there may be similar products in the banking market, this like other products, comes with innovative and unique features.

In an encounter with one of the bank’s customers, her description of the product- e-Savings Account, paints a picture of a convenient and secure platform for potential customers of Who want to open accounts online through the bank’s Facebook page and website.

The bank however, said its introduction is in line with the commitment to bring traditional excellent banking services closer to all segments of the society and drive financial inclusion while enhancing customer experience via social media.

The process, the bank said, is stress-free. A potential e-customer logs on to the FCMB Facebook page, fills out some basic personal data and then uploads his or her scanned valid passport photograph and signature mandate. All is set.

In terms of advantages, they are Zero opening balance, Zero minimum operating balance and Minimal documentation requirements. While the account balances cannot exceed N200,000.00, single deposit and withdrawal transactions cannot also exceed N20,000.00 to minimize losses.

“In addition to the above reduced KYC requirements, single deposits above the set maximum deposit and withdrawal limit of N20, 000.00 and account balances above N200, 000.00 would require additional KYC, which are valid ID card and residential address visitation. Thus, the customer is by extension, entitled to free access to online banking and free access to Mobile banking,” the bank said.

Another strategic innovation in FCMB’s stable is tagged, “Nairawise”. This has been designed out of the bank’s desire to support financial inclusion in the country. The product is tailored for the underbanked segment too- artisans across the country and a couple of the very informal sector (middle and lower classes) of the society’s segments.

The system is structured with ease for customers’ operation. The bank is taking Nairawise to the target customers in their various locations, with its agency banking model to reach the customers in remote areas of the country to support financial literacy and inclusion.

The opening balance is N500; minimum-operating balance is zero, while monthly maintenance fee is also zero naira. “With FCMB’s NairaWise, banking is simple, very easy and anybody can have an account.”

The bank, which promises to offer simple products, be reliable and helpful also aspires to be able to distinguish itself by its “extraordinary people and culture: a customer-focused and performance-driven environment. “

The Divisional Head, Retail at First City Monument Bank (FCMB), Olu Akanmu, said, FCMB’s unique retail lending capacity enables us to offer valued services to millions of underserved Nigerians directly and indirectly, while supporting portfolio diversification objectives to deliver sustainable growth.

“Our primary objective is to establish final inclusion and encourage savings among this segment of our customers through our value-adding solutions. Now that the bank has added ‘feathers’ with these products, expectations are high among customers of yet another pace-setting innovation,” he added.