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Technology takes centre stage in financial transaction as Mobile App tops Nigerians’ choice

Mobile banking

Mobile & App Banking is the most preferred online digital platform for making financial transactions among Nigerians, the 2019 Consumer Digital Banking Satisfaction report by Agusto & Co., a foremost Pan-African credit rating agency has shown.

The advent of smartphones, which are typically internet-enabled and allows customers to easily execute banking transactions, explains why a larger percentage of respondents from the report use Mobile & App banking as the primary platform.

An analysis of the report revealed that internet banking platform requires more security details of customers when carrying out transactions, and as a result, the Mobile & App banking is mostly “preferred by customers executing out larger value transactions.”

The report by Agusto & Co., focused on the eight largest commercial banks out of Nigeria’s 18 deposit money banks operating in the country. The banks were selected based on their asset sizes as of December 31, 2018.

“Respondents were drawn from four out of the six geopolitical zones in Nigeria. Respondents from the Federal capital territory represented the North-Central geopolitical zone, the North-West region was represented by respondents from Kano state while respondents in Rivers and Lagos states represent the South-South and South-West geopolitical zones respectively,” the report stated.

According to the Lagos-based credit rating agency, the objective of the survey was to create an independent appraisal of the ease of using digital banking platforms by the Nigerian populace following an increased competition by banks on digital platforms as well as the growing quest for financial inclusion using digital means.

From the survey, a cross-section of bank customers in Nigeria revealed that Mobile & App banking is the platform of choice, 60 percent of respondents use the platform as their primary digital platform. USSD is the primary platform for 19.2 percent of the respondents while 19.6percent of the respondents use internet banking as their primary digital platform.

“USSD banking which supports the financial inclusion objective of the CBN is the second most used platform by respondents as customers are able to carry out banking transactions without access to internet facilities,” Agusto & Co said in a mail response to BusinessDay on Monday.

Through the National Financial Inclusion Strategy (NFIS), the Central Bank of Nigeria plans to ensure 80percent of the country’s population is included in the financial net by 2020. It also targets a 95 percent financial inclusion rate by 2024.

The Central Bank adopted the NFIS in 2012 to reduce the percentage of adult Nigerians who do not have access to financial services from 46.3 percent in 2010 to 20 percent in 2020.

However, most recent data by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning that as much as 36.8 percent of adults still lack access to financial services.

Commenting on how to deepen financial inclusion in a country like Nigeria where millions live on less than $2 a day, Patrick Akinwuntan, the Managing Director of Ecobank Nigeria said: “one of the most important gadgets that can be used to spur inclusive financial inclusion is mobile phone and so if there are charges attached to the use, it will affect inclusion.”

According to Oghogho Osula, financial expert and former MD/CEO of Coronation Trustees Limited, Nigeria has a large mobile market, and the huge number provides an opportunity to use it in deploying easy-to-use technology that can improve access to financial services.

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“Ease of navigation remains a major factor that attracts and retains customers on the digital banking platforms,” Agusto & Co. said.

Further analysis of the Consumer Digital Banking Satisfaction report by Agusto & Co. revealed that the Mobile & App banking platform that offers relatively easy and convenient access to banking services is the most popular digital banking platform among respondents as 82.6percent are aware of the platform.

About 57.2percent of the respondents are aware of the internet banking platform while 45percent are aware of the Unstructured Supplementary Service Data (USSD) platform. An average of 61.6percent of respondents is aware of the three major banking platforms.

“Chatbot programs such as (Ecobank’s Rafiki and Leo by UBA) that uses artificial intelligence to enable customers to execute transactions and address inquiries were also identified by the respondents, albeit marginal,” the report said.

From the findings by Agusto & Co when it asked respondents to rate how secure they felt when initiating transactions on their respective Bank’s platforms, it recommended that: “Banks should increase investment in technology to ensure the protection of customers’ data. Banks should also educate the customers on the importance of protecting the security details on various digital platforms.”

A new public opinion poll conducted by NOIPolls shows that 61 percent of the country’s population is now using the internet.This translates to about 120 million Nigerians who are now using the internet, thanks to the affordable and fairly used phones that have found their way into the country.

“With a very well-developed mobile market, and many tech-savvy consumers, there are exciting opportunities for mobile-based digital identity solutions in Nigeria,” Calum Handforth, Senior Consultant at GSMA said.

The Consumer Digital Banking Satisfaction Index report by Agusto & Co.in its second year assigned a ‘4 Star’ rating to Zenith Bank Plc as it scored the highest in terms of digital banking satisfaction to customers, emerging the ‘Best Digital Bank in Nigeria’.

According to the rating agency, the report which took into account a number of factors like ease of navigation, range of services available on the platforms, range of platforms known by customers, perceived security strength and transaction success rates was designed to gain insight into the behavioural patterns of the respondents, these respondents were selected from both the formal and the informal sector. “The output of the Index is based on information provided by respondents on the top eight banks in Nigeria by total assets as of 31 December 2018.”

“The ‘4 Star’ rating assigned to Zenith Bank Plc reflects transaction success rates, ease of use, perceived security and good troubleshooting & IT resolution on its different digital platforms. The Index revealed that Zenith Bank Plc has the highest transaction success rates on the bank’s digital banking platforms,” it said.

 

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