As businesses shift from the traditional brick and mortar approach of engaging customers to e-commerce, it has become more evident that financial institutions, especially banks’ business models must change. Banks cannot afford to carry on business as usual, hence the need to evolve from building more banking halls to creating technological solutions which allow customers to conduct seamless transactions online to aid financial inclusion.
According to the Nigerian Communications Commission (NCC), the number of active mobile phone lines recorded in the country rose from 142million in November 2017 to 144 million in December 2017. Statistics from the Nigeria Interbank Settlement System (NIBSS) also showed that the total value of transactions for four major electronic payment channels namely NIBSS Instant Payment (NIP), NIBSS Electronic Funds Transfer (NEFT), Point of Sale (PoS), and Mobile (Inter-scheme) transactions rose by 35% to N69.7 Trillion in 2017 from N51.6 Trillion in 2016.
This reflects the market potentials within the country and the growing need for digital solutions through which every Nigerian, both in the rural and urban area, can easily make transactions without joining banking hall queues for long hours.
The emergence of Financial Technology (FinTech) companies in the Nigerian financial ecosystem has also changed the dynamics within the landscape, thereby challenging financial services’ players especially Deposit Money Banks to be more innovative in creating digital solutions required to meet customers’ needs and improve customer experience.
On the other hand, “digital retailing” has seen customers embrace the Do-It-Yourself (DIY) [self-service] approach of conducting banking transactions—from account opening within minutes to making payments online anywhere, and at any time through Banks’ Mobile Applications. This has largely been facilitated by massive technology investment in the Banking Industry in a fast-changing business world. Besides the seamless transactions on secure platforms, digital retailing makes access to customer’s data easy; this enhances the improvement of the customers experience by personalizing services for every customer.
Most Nigerian financial institutions are taking giant strides to ensure they remain in sync with today’s digital customer behavioural and expectation patterns. As Nigerian banks continue to re-evolve retail banking to deepen financial inclusion, digital retailing in banking will continue to rise given consumers’ choice for convenience, speed, security and efficiency in banking transactions.
Thus, it is essential for banks to focus on providing a more frictionless digital experience to their customers, especially in a highly competitive market. Beyond retail savings, more can be done in small-scale loans to the retail sector of the Nigerian economy.