• Friday, May 24, 2024
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BusinessDay

When retail shops become future banking hall

With the rapid changes in the financial services sector of the economy, it is expected that retail shops (agents) would become banking hall for consumers’ neighbourhood in the future.

What are those changes? Jay Alabraba, co-founder and director, Paga, says heightened competition is forcing better customer relationship management across board. Apart from that, Nigeria is going cashless. E-payments and electronic transfers will continue to grow.

Basic transactions are possible remotely via ATMs, mobile money and mobile banking – the banking hall is irrelevant for many.

Also, the mobile phone and computer are rapidly becoming the retail banking process point of choice.

Alabraba, who spoke at the just concluded eight annual banking and finance conference organised by the Chartered Institute of Bankers of Nigeria (CIBN), asks that microfinance banks are plenty, but are they really able to serve the people right in their communities?

He highlights the benefits of having retail shop as banking hall to include one-stop-shop, solves more problems, no need to go long distance, agents can spend more time explaining products and services, familiar/speak same language, and lower cost products.

The benefits to banks include lower infrastructure costs, can offer low cost products due to better margins, cheaper source of funds for loan book, include more people by going deeper into urban and rural communities.

However, the Central Bank of Nigeria (CBN) has laid a strong foundation towards this future.

What are those foundation? “Mobile Payments” and “Agent Banking” are critical strategies of the CBN to achieve financial inclusion, says Alabraba.

Also speaking at the CIBN conference, Dipo Fatokun, director, banking and payments system department, CBN, says the CBN has put in place policies and initiatives for the overall development of the payments system, saying there is need for effective and efficient risk management strategies/framework/processes by the banks and other financial institutions.

Fatokun identifies implementation challenges of e-payments to include Economic Constrains & Cash Culture, explaining that Nigeria is a cash-based economy and majority of its people prefer cash transactions to the detriment of e-payments, public acceptance of innovations, infrastructure (power, communication, roads and other means of transportations), network connectivity, arising from NIBSS, switches, banks and telcos – unavailability of financial services 24/7, non passage of National Payments Systems Management Bill by the National Assembly and admissibility of electronic evidence in court.

The apex bank requires the support of key stakeholders in the payment system for continuous improvements in the sector and the development of the Nigerian economy, he says.

In her address of welcome, the CIBN president, Debola Osibogun, says the institute had developed its relevance over the years as an active partner in the economy., saying “it is pleasing to note that previous editions of this conference have made far reaching policy recommendations, some of which have been implemented by the government, resulting in the setting up of key agencies that are impacting the economy in no small measure today.”

HOPE MOSES-ASHIKE