“Bigger” no longer “better”, as banks accelerate Fintech adoption
According to the Economist, more than $25 billion has been invested in Fintech globally in the last five years. Forward-looking financial institutions, hence, are already upping their tech game as they vie for better customer experience, more insightful data analysis, and increasing cybersecurity.
The second quarter (Q2) report released by the National Bureau of Statistics (NBS) in August showed that the total number of banks’ staff decreased from 77,096 in Q1 2017 to 75,607 in Q2 2017. The decline in staff was complemented by a third consecutive drop in bank cheque transactions to 2.647 million in volume from 2.650 million in Q1 2017, and N1.3 trillion in value from N1.4 trillion in Q1 2017.
In the same quarter, ATM transactions reached an all-time high in terms of volume (187,805,431 from 178,964,710 in Q1) and value (N1.54 trillion from N1.50 trillion in Q1). Point of Sales (POS) transaction were also in positive territory as volume reached 32,774,732 (N324 billion) from 26, 646,982 (N286 billion) in Q1. NIBSS Instant Payment (NIP) volume also grew from 69,657,556 in Q1 to 80,823,134. WEB transaction volume went to 5,965,106 from 5,520,058 in Q1.
Volume for mobile payments, the poster child of fintech companies, dropped from 12,609,706 in Q1 to 11,559,108 in Q2. Nevertheless, the value was unaffected as it grew from N261 billion to N295 billion.
Bank customers that are leveraging technology to carry out their transactions are on the rise, which for many banks means, more staff recruitment does not reckon as priority. In any case, some banks are using the opportunity to reduce their overhead cost by letting some of their staff go. For instance, staff strength has been on the decline since Q4 2016 and has continued to Q2 2017 at -1.93%.
Banks Placing New Bets
Wema Bank took many people by surprise with the launch of ALAT by Wema in 2017. Usually, most banks would release an app that provides basic services such as account checking, money transfers, airtime recharge and bills payment. However, ALAT – coming from a 72 years old institution known for conservatism, is arguably the first 100 percent digital banking application in Nigeria. It enables users to carry out all banking transaction without having to enter a Wema banking hall. With the ALAT app, customers can request for debit cards and it gets delivered to their homes within 2 to 3 days. The bank hopes to serve 3 million customers with its application. The bank was awarded the Most Innovative Product for 2016 by Inlaks Limited for its solar powered mobile banking trucks.
Stanbic IBTC is not a new comer to digital innovation. In 2016, the bank sealed a digital inclusion partnership with technology giant Google and launched a 24 hour digital bank branch. The Stanbic IBTC mobile application #Appyness goes beyond providing basic banking services like account transfer, bill payment etc to providing money investment opportunities for customers.
Diamond Bank is doing everything it can to entrench millennial excitement in its digital activities and appears to be winning. Its partnership with Visa on mVisa gives thousands of customers who use the Visa cards the convenience to make transactions from within the Diamond Bank mobile application. The bank which has already recorded 2 million downloads of its mobile application is poised for more innovation of its banking services.
To be concluded next week…
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