• Monday, June 24, 2024
businessday logo


Tech talent shortage threatens financial inclusion, innovation

Lessons from India, Kenya’s talent export models

The mass resignation of skilled information technology professionals from the banking industry is already causing a severe strain in digital financial operations such as mobile transfers and Unstructured Supplementary Service Data.

Analysts say that the talent exodus creates gaps in the efficient running of mobile banking services which poses a threat to Nigeria’s financial inclusion drive, digital innovation and the growth of fintechs.

“It is going to affect the case of innovation in the financial services sector because the focus will now be on stabilising current platforms,” Ayodeji Ebo, managing director/chief business officer at Optimus by Afrinvest Limited, said.

Ebo said it would affect the confidence of customers using the platforms because of the increased failed transactions.

Stephen Nejo, a Lagos-based banker, said it would delay the resolution of customers’ complaints.

“It is a tough one because one person is doing the job of 10 persons or very few experienced people are busy training new intakes that don’t have the experience,” Nejo said.

The importance of financial inclusion, which is a key enabler to reducing extreme poverty and boosting shared prosperity, has made it to be identified as an enabler for seven of the 17 Sustainable Development Goals 2030.

This is why the Central Bank of Nigeria has been finding ways to reduce the unbanked population by introducing initiatives capable of bringing more people into the financial system.

In 2020, Nigeria’s financial inclusion rate grew to 64.1 percent in 2020 from 63.2 percent in 2018, according to Enhancing Financial Innovation & Access. But despite the improvement, the 2020 figure is below the CBN’s 80 percent financial inclusion target for 2020.

For 2021, a Global Findex report by the World Bank said the country’s banked population increased by 15.6 percentage points to 45.3 percent from 29.7 percent in 2011.

During a post-Bankers’ Committee meeting press briefing held in April, Abubakar Suleiman, chief executive officer at Sterling Bank Plc, complained of how the banking industry had been hit by the great resignation.

“So many of our very experienced talents, especially in the area of software engineering, are either leaving the industry or leaving the country,” Suleiman said.

The Great Resignation, also known as the Big Quit and the Great Reshuffle, is an ongoing trend in which employees are voluntarily exiting their employment obligations since the late 2020 and early 2021.

To elaborate more on the issues, a business development officer who wishes to be only identified as Tunde told BusinessDay that his company encountered glitches when it wanted to pay salaries.

“The processes went well until it got back to the head of IT who had resigned at the time of the transactions. Hence it led to system glitches making several funds to go out without proper checking,” he said.

Olumide Akintoye, a student of the University of Lagos, also complained that one of the top tier-one banks had yet to resolve the failed transactions that occurred since last month.

“When I used the bank’s ATM; I requested for N5,000 but only received N3,000. I tried again the second time, asking for N2,000, but it only gave me N1,000. I complained twice to the bank, but till date, neither a reversal nor a response has been received from the bank,” she said.

Read also: Squad to Hydrogen: Nigeria’s big banks join fintech fray

The financial sector is very delicate. Imagine if someone’s account was hacked, then millions of naira or dollars are at risk, says Olamide Adeyeye, a Lagos-based human development researcher. “So, the banks are really feeling the heat which might eventually affect their bottom line.”

Nigerians with globally marketable skills have been migrating to other countries through study and work visas due to the country’s social economic conditions such as inflation, unemployment, and insecurity, among others, which have worsened over the past six years.

According to the National Bureau of Statistics, the country’s inflation rate stood at 20.50 percent in August 2022, the highest in 16 years and 10 months. As at the fourth quarter of 2020, 23.2 million people are unemployed out of 69.7 million in the labour force.

The rising inflation and continual devaluation of the naira against the dollar has spurred local talent to seek foreign employers in order to earn in dollars as a hedge against inflation and devaluation.

The COVID-19 pandemic has also opened up international remote working opportunities to Nigerians.

Kassy Olisakwe, senior blockchain developer, said: “Nigerian banks often outsource their core processes to handlers (people that help them to process their transactions, store their data etc.) outside the banking system.

“Delay is often caused by having too many middlemen. It is easier for them to outsource because the talent to build the systems are scarce.”

Data from the British government shows that the number of Nigerians granted student visas by the United Kingdom increased by 222.8 percent to 65,929, the highest in four years in June 2022 from 20,427 in the same period of 2021.

In terms of skilled work visas, Nigeria grew by 109.1 percent to 15,772 in June 2022. And Canada’s study permits for Nigeria increased by 30.3 percent to 13,745 in 2021 from 10,550 in 2020.

BusinessDay reported last week that some banks have adjusted the education criteria for their recruitment process in a bid to cope with the skills gap.

A survey of job listings from recruitment websites found that Access Bank, First Bank, Guaranty Trust Bank, First City Monument Bank and Polaris Bank have now reduced the minimum eligibility criteria for their 2022 Graduate Trainee Programs to a second-class lower grade (2.2), from the second-upper class (2.1) and first class grades that used to be demanded from job seekers.