The Rise of Nigeria’s Invisible Bank

By David Idoru

In a world of digital banking and with innovation and technology positioning itself as the future of payments, there are several opportunities for organisations to solve some of the world’s biggest challenges and enhance large scale production. Digital banking in Nigeria has evolved significantly and have become an important part of our daily activities, driving e-commerce, utilities and effective everyday solutions.
On innovation around digital banking, it is a common perception that this solution is the brainchild of Fintech firms, generally because while traditional banks in Nigeria stood and watched from the sidelines, Fintech firms (most of which are strictly neobanks) began to swiftly launch investments and savings products that appealed to everyone.
What the traditional banks began to learn from this is that individuals are constantly looking for the most convenient ways to carry out transactions and will eliminate the time spent in physical banks if they have the power to do so. Once this existing gap was identified, traditional banks became challenged to penetrate the digital banking space tailored to the needs of the everyday consumer and also as a means to encourage the financial inclusion mandate from the CBN.
When we looked at the recent NIBSS report, the total number of bank accounts as at September 2019 was 123.9 Million; with the total number of active accounts at 74.7 Million, and the total number of active bank customers (individuals) at 69.0 Million. The importance of quick access to finance cannot be undervalued and with financial exclusion still, a barrier in Nigeria – only a digital innovation in banking can influence growth in the sector.
While the obvious financial inclusion challenge is something we are keen to addressing, we ask ourselves, is this a problem that digital banking and innovation can solve? Yes, it certainly is. To buttress this, a report demonstrated that 59% of Nigerian customers prefer digital methods of banking, with only about 15% still fixed on the traditional form.
In the payments ecosystem, we decided at Standard Chartered Bank that it was important to drive this digital innovation with a completely virtual type of retail banking that is both efficient and convenient. In December of 2019, we launched Nigeria’s first digital bank to address everyday payment problems without the need for customers to walk into a physical bank.
Unlike other neobanks, our digital bank communicates an ‘unstoppable and banking everywhere’ message to customers and for the first time, Nigerians are experiencing a branchless, digital bank that offers savings accounts, current accounts, fixed deposits (with the option of joint accounts) along with Lending and Wealth Management solutions and a client onboarding process that takes only 10 minutes. These kinds of innovation are possible due to the level of investments we have made to ensure that it delivers digital banking comparable to none. In the last 3-5 years, Standard Chartered has invested over USD3 billion in technology.
We have also taken a ‘Capturing the Digital Initiative’ approach that ensures that about 70% of the most common service requests can be handled by our digital bank with distinct benefits such as a zero charge on all interbank transactions, zero charges on SMS notifications and free delivery of cards to customers regardless of location.
For us, our sense and definition of a digital bank would resonate more with one that serves its clients without them ever needing to come to the branch if they don’t want to, not even to open an account – It means giving people the choice to do everything digitally from their mobile phones.
The future of banking is moving towards outstanding customer satisfaction as customers would now begin to perceive financial institutions as no longer ‘places where people go to Bank’ but as ‘organisations customers choose for financial transactions’. This would automatically mean that people will have more choices and banking will be more convenient. In this regard, digitalization will no longer be seen as a destination but as the path to the superior client experience.
While most banks might feel threatened by Fintech who wants a piece of the pie, it is also important that banks realize that collaboration will push the industry further. A good number of Fintechs come with a great source of talent, ideas and new technologies that banks as stand-alone may not possess in good capacity. As a result of this, Standard Chartered looks to move the digital banking forward by leveraging collaborations with Fintech firms in the coming years. We all must sit up and embrace the digital banking which in it lies the true satisfaction of the customer.

David Idoru is the Head of Retail Banking, Standard Chartered Bank Nigeria.






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