The smart banking Nigeria deserves
The COVID-19 lockdown did not only change spending habits, but it also changed my banking habits remarkably. Yes, there was no single banking activity I desired that I couldn’t carry out. If there was anything different, the experience has been convenient and more seamless. Perhaps, the pandemic has taught the bankers more of the soft skills most of them have flaunted as their unique selling points.
A few weeks before the lockdown was imposed, I noticed a somewhat strange mixed feeling about going to the bank. Mixed feeling because I cannot explain whether I was too satisfied with smart banking practices I resumed the year with or I was scared of the health risk that goes with the push and shove in banking halls. During the lockdown, I perfected my new smart banking habits.
Something struck me in the first two weeks into the partial opening. Hundreds of customers would mill around banking premises in Lagos metropolis each day, struggling to gain entrance. I became curious. Does anybody still withdraw money from one bank to deposit in another or for transaction purposes? On inquiry, I was shocked to hear that somebody would spend an hour on a queue to check their account balances?
Then, I concluded that either the banks are not doing enough to provide sufficient education on the value of their electronic products or lots of customers have foreclosed any form of knowledge that rivals the look-and-feel of a banking hall. It is understandable if a customer in Ewu or Abaji queues withdraw N3,000. But if Lagos and Abuja residents still bother customer service officers about account status, it means the journey to an era of efficient electronic banking is yet to start. It also implies that the billions of naira commercial banks invest in smart technologies yearly is a waste.
Safe when I misplaced a debit card and needed to replace it, I have not visited a bank in the past four months. If there is anything I cannot do on either my Access Bank app or at an ATM, it is probably a complaint to be sorted out via email. And quite a number of the banks are becoming very swift in their responses. I have, in the past one month, resolved two failed transactions via emails. I did not have to call once.
The talks about e-banking sound like a fairy tale to many people. Interestingly, electronic banking can only be as smart as the customers, as no operator can compel an unwilling customer to adopt its digital products. No doubt, banks and the industry regulators have a lot to do to address safety and security issues. But when you research the reported cases of frauds, you will agree that a larger percentage border on integrity and ethical issues. On the introduction of the cashless programme about three years ago, eight commercial banks reportedly spent N34.2 billion in nine months on soft infrastructure. The same banks had earlier invested N25 billion in related digital banking support infrastructure shortly before then.
There is virtually an app for everything under the sun. And with digital evolution, you can do also anything – attend a conference; brainstorm with colleagues; hold a board meeting; seal a transaction in any part of the world; make a presentation etc – from the comfort of your bedroom. Kenya, a country of similar socio-economic character, with that of Nigeria understood this emerging trend much earlier and started a gradual but consistent transformation. Today, Kenya‘s mobile money adoption is next to none in Africa.
Sure, Nigeria, supposedly the giant of Africa, is a latecomer in the smart banking era. But what we lost to sloppiness, we are gaining through our unusual creativity, courage and speed. Nigerian banks are dusting off the brick-and-mortar structure mentality to embrace the digital model, and are fast retooling there operations to align with the emerging lifestyle. Thus, the competition has shifted from brand networks to speed and convenience.
This model is more socially-relevant today than any other time as cash transaction does not only cause the country with economic losses but also afflicts it with health hazards. So, it is time to go digital. With USSD banking, a mobile telephone is cash on the go. If the country seriously wants to contain the spread of COVID-19, USSD banking is also a sellable point that can penetrate even rural communities and deepen financial inclusion. Indeed, the pandemic has become a major reason a visit to the bank has become more of a nightmare than pleasure.
At a higher scale, the banks must necessarily remake their human resource philosophy. The bulk of personnel of the old older are tellers and officers assigned to other routines that are not intellectually edifying. Often, banks employ first-class graduates in important faculties as important as science, technology, engineering and mathematics (STEM) to fill these regular jobs. What better way to abuse a nation’s human capital!
Future banking is the one with more tech experts than tellers. And that future is now. This is not politically convenient but this is one reality the country cannot run ignore for too long. In the hit of the COVID-19 shutdown, Access Bank’s CEO, Herbert Wigwe, said the bank would keep a lean structure as some of its branches would not be opened in the meantime. The statement, which hit the uneasy political chord, speaks brutally to the reality of the industry even beyond Covid-19. The irony is that even those who criticized the bank chief are not ready to forfeit a naira to a bank run, which can only be prevented with a courageous decision like his.
This brings to the fore the absurdity of our national life. We have deliberately refused to believe the old economic truism – there is no free lunch. Every decision goes with a cost. The overburdened banking industry will always explore every excuse in the book to milk its customers and remain in business. The high cost of banking is passed on to customers in the form of unreasonable interest rates that discourage investment. But a lean banking operation translates to low operating costs and affordable interest rates in the long-run.
The industry, nay the country, is at a crossroads. To technologically transform the industry a lean but efficient model that supports national development or continues on the race to the bottom. It is a decision we cannot leave to bankers alone.
Iyatse, a journalist/public relations practitioner, wrote from Lagos.
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