Since the Central Bank of Nigeria (CBN) introduced the cashless policy several years ago to, among others, encourage the Nigerian banking public to switch to alternative means or channels in place of cash transactions, banks in Nigeria have witnessed steady growth in the use of their automated platforms –online, mobile and ATM. When hurricane coronavirus, so to speak, made landfall on Nigerian soil and forced government to impose lockdowns as part of measures to curtail its spread, banks experienced an unprecedented surge in customer activity on their automated channels.
People like Sunny (real name changed to protect his identity) ensured that the banks’ automated channels more than made up for whatevershortfall was occasioned by the lack, or restriction,of in-branch, in-person transactions due to the lockdowns. He recalls often boastingbefore the COVID-19 era: “I don’t do mobile or online banking. I can’t trust those channels. I must visit the branch because I want to physically see the processes involved in fulfilling my banking requests.”Nowask Sunny the last time he entered a bank branch to do any transactions. Not just that he cannot remember, he actually has no plans to visit any bank branch anytime soon even without lockdowns or the tight restrictions in place anymore. He says he has moved on permanently. Yes, the diehard bricks-and-mortar bank customer has become an unrepentant convert to digital banking.
Sunny is not alone. Available data suggests that many more people have been making the switch to alternative banking channels since COVID-19 disrupted life as we knew it and became a more or less permanent feature of our everyday living. Take, for example, the number of people who turned to Firstmonie, the agency banking platform FirstBank set up to champion its financial inclusion drive and accelerate the extension of financial services to the unbanked and under-banked, particularly in the hinterland.Firstmonie witnessed a massive 63-fold increase in the number of new wallets created in 2020 when compared with its 2019 figure. Each of these new wallets represents a new user seeking to carry out basic banking transactions, such as sending or receivingmoney, paying for services like electricity, cable subscription and airtime, enrolment for bank verification number (BVN), opening a bank account and making deposits via the Firstmonie platform.
Undeniably, the growth was helped by the unmatched size of FirstBank’s agent banking network in Nigeria. Numbering over 86,000 Firstmonie agents as at the end of 2020, with over 26 per cent of them being females, they are widely distributed across all but two of Nigeria’s 774 Local Government Areas, making FirstBank’s agent banking network the most widespread in Nigeria and the largest bank-led network in Africa. In terms of volume, these agents, FirstBank fondly calls Human ATMs, processed over295 million transactions with a value of N6.65trillion in 2020. They alsoopened more than 196,000 new accounts.
A similar trend, even if not as spectacular, was witnessed in FirstBank’s other alternative channels. Its WhatsApp channel (chatbanking) which has been programmed to enable customers resolve a variety of issues by following specific prompts without the need for any of the bank’s customer service personnel to intervene, saw a 35 per cent increase in new users in 2020. These new users would probably have preferred an in-branch face-to-face meeting with a customer service personnel. But what chat banking (via +234 812 444 4000) offers to the customer is a more convenient, “queue-less” and inexpensive alternative resolution mechanism that could even be more effective, depending on the issue the customer wants resolved.
All the new users of FirstBank’s online banking channel, FirstOnline,in 2020 would have been pleasantly surprised that they could carry out so many more banking transactions from the comfort of their home or office using their laptop or other device and wondered why they had to wait for a pandemic to make such a good choice for them. Each new user was part of the28 per cent increase in enrolment the online service experienced in 2020. FirstBank’s mobile banking channel/app, FirstMobile, also enjoyed a boost in numbers in 2020. The service saw a 17 per cent increase in new users in 2020. New users of the two channels also contributed to the approximately 256 million transactions shared between FirstOnline and FirstMobilein 2020. The transactions were worth N15.7trillion.
USSD (Unstructured Supplementary Service Data) banking via *894# direct short code saw a 22 per cent growth rate in 2020, pushing the total number of users on the channel to 11.2 million withabout 1,944 financial transactionsprocessedin one minute as at year end. The new customers on the platform, which advantages include real-time messaging service, speed, instant value and no requirement for Internet access, are now getting a taste of the world of convenient banking via mobile phone that earlier users are already taking for granted.FirstBank had over1,254,467 accounts opened through the USSD code in 2020.
The year 2020 also saw FirstBank’s Point-of-Sale (PoS) businessgrowing by 16% with the value of PoS transactionsexceeding N199billion. Compared to 2019, the channel witnessed a 125% increase in the number of active merchants such that by year end, FirstBank had 72 of them. And the number of transactions processed in 2020 grew by 199% with a value accumulation of N45 billion.
FirstBank, with the largest ATM network in Nigeria, also served a large number of customers and non-customers through the channel, which closed with 3,111 configured ATM terminals in 2020. These terminals dispensed over N2.3 trillion to users in spite ofthe COVID-19 pandemic and its associated lockdowns and social unrest. In fact, because of the pandemic and health concerns, FirstBank provided a contactless ATM solution that leverages digital channels. The bank also included a “large sum bulk withdrawal” feature on its ATM terminals in 2020 to improve its ATM services andensure customer satisfaction.
While COVID-19, undoubtedly, has played a role in accelerating the switch to alternative banking channels, the importance of growing trust in the channels by customers in determining which bank and what alternative channels they used, should not be discounted. Sunny (remember the new convert to digital banking channels?) underlined this point when he remarked, “I’m getting more and more comfortable with digital banking. I think our banks are making a lot of investments in the technology behind digital banking to make it more secure and trustworthy for customers.” FirstBank’s rising numbers in terms of customer use of its alternative banking channels speak volumes about this growing trust between the bank and the banking public.
