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Published On: Sun, Sep 24th, 2017

E-BANKING: New Hi-Tech culture changes the rules

FELIX OLOYEDE  |

Nigerian banks have moved the theatre of competition from brick and mortar financial service vending to a new place. Here the codes are a series of zeroes and ones, the actors are not svelte ladies in high –heeled shoes and short skirts looking up rather than down or men with smooth cheeks, crew cut hair and body-molded suits who look like they have just stepped out of ‘Men’s Health’ Magazine, the new agents of mass service provision are shiny but unclothed, they are computers that do in a millisecond what humans do in minutes. Welcome to the banking sectors chief industry disruptor; welcome to the digital world. In the last two years Nigerian banks have gone for one another’s jugular like gothic warriors as they migrate thousands of their customers from real world banking halls to ubiquitous internet platforms, the outcome of this epic battle for new digital market share has been mixed as some banks have done better than others.    Nigeria has experienced a fair share of growth in the global move towards electronic payments and settlements. The rise in digital banking has ripped ahead at terabytes with analysts noting that global volumes have grown by 10.1 per cent globally to reach USD426.3 billion in 2015 with Africa and other emerging markets playing a crucial role in this rise, according to a 2016 World Payments Report.       

In Nigeria, an ever growing number of customers are whipping out sleek digital devices such as mobile phones and tablets to do their businesses rather than stroll grudgingly to banking halls. Data obtained from the Central Bank of Nigeria (CBN) show that the volume of transactions carried out through devices such as Point of Sales (PoS) machines alone has grown 86.28 per cent from a modest 2.59 million in 2012 to a staggering 48.2 million (or twenty folds) in May 2017, internet banking and mobile payment volumes also rose by a whopping 325.96 per cent from 2.28 million in 2012 to 9.7 million in 2017 for internet banking and 778.44 per cent from 2.02 million to 20.18 million for mobile payment in the last five years.

True, Automated Teller Machine (ATM) transactions have declined by a wimpy -18.39 per cent over the last five years to 306,462 in May 2017, the value of these transactions went up by 27.78 per cent to NGN2.54 billion in May 2017 from NGN1.98 billion in 2012. This is while the total value of electronic payment transactions have soared 1,372.11 per cent in the last five years from N138.65 billion in 2012 to NGN2.04 trillion in May 2017.

Dr. Dipo Fatokun, Director, Banking and Payments System Department, Central Bank of Nigeria (CBN) believes that several factors could be responsible for the outsized growth of global electronic payments; he believes that a complex combination of factors have given rise to growth in digital infrastructure, these include but are not limited to: stronger encryption measures such as EMV, OTP, Token, 2FA or biometrics, moves by governments to encourage digital payment solutions and banks search for business models that reduce operating costs while improving service delivery quality.

“Electronic payments solutions continue to be fascinating stories across the globe and Nigeria is no exception, but banks and other service providers face a number of challenges in ensuring that they make the most of this opportunity,” he noted while addressing pressmen at an e-payment conferences in Lagos recently.

Quite a number of banks have led the charge in Nigeria with Guaranty Trust Bank (GT Bank), Zenith Bank and Diamond Bank heading strongly through the technology gates as they set the pace in the industry with a variety of online and digital mobile banking solutions. Diamond bank in particular has leveraged the powerful growth in digital consumer banking activities to improve its once bed-ridden balance sheet; Diamond Bank under the leadership of Uzoma Dozie, scion of the founding Managing Director and Chairman of the bank, Pascal Dozie, has invested heavily in technology to improve customers’ service experience at a number of service touch points. Since becoming group managing director (GMD), Uzoma Dozie has shown resolve to setup a focused digital team that would spearhead technological innovation in the crowded industry.

This has led the bank to being the first commercial lender on the continent to introduce fingerprint recognition features on its Diamond Mobile App, a fingerprint reader that allows users of the App to easily and seamlessly login to their accounts by simply recognizing and identifying their individual fingerprints – a technology very few banks in the world have adopted and implemented.

Diamond Bank was also the first to launch Magic Cash in the country, an application or App that works with a mobile phone; it is a no-cheque, no-withdrawal slip and no-debit card financial transaction that gives customers easy access to draw cash from any of the bank’s ATMs at any specified or preferred time.

Therefore it did not come as a surprise when the bank emerged as the Best Bank in Mobile Banking in Nigeria in the 2016 Banking Awards organized by a local newspaper publication. It was also named the ‘Most Innovative Product of the Year’ as the bank’s Cool Teen financial product, designed for teenagers, beat four others to emerge best in class product brand.

Receiving the award then, the chief executive officer of Diamond Bank, who was represented at the event by its Deputy Managing Director, Caroline Anyanwu, said the award was evidence of the bank’s conviction that digital platforms were key to the future of banking. She further stated that Diamond bank’s leading role in providing efficient and cost effective services using mobile phones was strategic.

Confirming the bank’s superior digital service quality, a customer with the online name, Sholatech said, “Diamond Bank is ahead of digital contemporaries by a long pole. The ease of using it electronic services and the simple registration process is superb.’’ As the bank proclaims in its digital adverts, mobileapp is the sweetest way to bank or so it seems as a growing number of banks take to the digital circuit to provide their customers with services that meet the requirements of efficiency, speed and lower opportunity cost.

A customer who goes by the online name Tempest01, when asked about Diamond banks online digital presence noted that, “I am torn between zenith and diamond bank, both banks seem to offer very competitive on line experiences.”

Zenith Bank and GT Bank are the two other commercial lenders in that customers fancy as first rate on line banking service providers. Demilade Olayioye, a customer of Zenith Bank who spoke with Business hallmark noted that she prefered Zenith Bank to other banks she has tried because she hardly encounters any problems while carrying out transactions on the bank’s e-payment platforms.

GT Bank’s USSD *737# has gained strong acceptance among young Nigerians. The bank is said to have popularized the used of USSD codes in the country. A GT Bank customer with the online name, SleekReek declared: “GTB e-banking platform is very user friendly, excellent service. You can just register and start using it without any supervision. It has never failed me once. I use it for all my Forex transfers also without problems.”

The ancient Roman coliseum would have been proud of the emerging battles in the digital market space in Nigeria as several banks swing heavy electronic swords, hold up encryption shields and engage in digital shows of strength to the admiration of customers who are increasingly becoming the chief beneficiary of the new digital banking age. On the downside, the rise of electronics has seen the gradual erosion of certain categories of banking jobs such as tellering, bulk cash counting and to some extent marketing. Routine jobs are biting the dust in the competition arena while jobs that require critical thinking skills such as credit evaluation and administration still carry weight in banking rooms. Credit appraisal memorandums (CAM’s), Asset and Liability Management (ALM) and Credit Risk Management (CRM) remain a staple of the banking business that may not fizzle any time soon.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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