The impact of the COVID-19 pandemic which worsened Nigeria’s already weak economy may have also helped in deepening technology adoption in Africa’s largest economy, findings from the financials of the country’s tier-one banks have shown.
Earnings from electronic transactions by Nigeria’s five systemic important banks grew by most in seven years in the first half of 2021.
Nigeria’s largest financial institutions in the first six months of 2021 grew their earnings from e-channels by 43.03 percent to N83 billion from N58.03 billion in the corresponding period of 2020.
The income from the banks’ e-business in the review period was higher by 12.59 percent compared to the N73.72 billion recorded in the comparable period of 2019, the year before the Central Bank reduced charges on banks’ transactions. A proof that Nigeria’s digital economy may be riding on the impact of the COVID-19 pandemic to expand.
In furtherance of its quest to make financial services more accessible and affordable to various stakeholders in the economy, the Central Bank of Nigeria last year reviewed downward most charges for banking services.
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Effect from January 1, 2020, charges on electronic funds transfer, for instance, will attract N10 for transactions below N5,000; N25 for those between N5,001 and N50,000, and just N50 for those above N50,000. This is compared to the initial flat rate of N52 per transfer, the apex banks said.
“In a bid to encourage financial inclusion and to reduce the burden of bank charges on consumers of financial service, CBN has issued a revised Guide to charges by Banks, Other Financial and Non-Bank Financial institutions in response to the evolution in the financial industry over the last few years,” the apex bank said on its Twitter handle on Monday.
The Guide which was first released 15 years ago was revised in 2013 and 2017 in the light of market developments such as innovations in products and/or channels and new industry participants.
To ensure that banks attend to every customer’s complaint, CBN had directed banks to log every complaint received from their customers into the Consumer Complaints Management System (CCMS).
The CBN also warned through its tweet that “failure to log and provide the code to the customer will amount to a breach and is sanctionable with a penalty of N1million per breach.”
A breakdown of the financial result of the biggest lenders in Africa’s largest economy showed that UBA topped the gainers’ chart with N30 billion, higher than the N 17.93 billion reported in the same period of the preceding year.
This was followed by FBN Holdings with N29 billion, Zenith Bank (N17 billion). GTB and Access Bank completed the list with N5.54 billion and N2.42 billion, respectively.
Nigerian banks have continued to introduce digital products into the financial sector and their operations, driven by the need to eradicate long queues in banking halls, make cash transactions easier and faster and resolve other issues associated with payments and financial transactions. This is believed to have contributed to the growth reported in banks’ revenue from e-transactions.
