The banking industry has long been tarnished by fraud and scandals, from the 2008 global financial crisis to smaller, localized cases. These events have left deep scars, eroding trust and making consumers wary of financial institutions. In Nigeria, repeated crises—ranging from Ponzi schemes to microfinance mismanagement—have amplified this distrust, especially among low-income populations. Regulatory efforts like those by the CBN aim to restore stability, but for many, banks remain symbols of profit over people.
Key issues exacerbating the trust deficit among Nigerians using formal financial services include:
Transparency in Pricing: 24 million report unexpected fees or charges after taking a financial product, while 27 million Nigerians using formal institutions believe bank charges are unaffordable. Only 30% were informed of fee changes over the past year (A2F 2023).
Poor Customer Service: A staggering 37% are dissatisfied with customer support, 19% experience frequent service disruptions, and 20% report unfair treatment by bank staff or agents(A2F 2023).
Lack of Clear Financial Information: Nearly half of Nigerians (48%) say that information on financial products is not consistently clear or understandable (A2F 2023).
Fraud Incidences: The FITC Fraud & Forgeries Report (2024) revealed that fraud losses rose from ₦468 million in Q1 to ₦42 billion in Q2 of 2024. Additionally, the A2F 2023 reports 6% of microfinance users lost money to fraud in the past year, while 2.3 million Nigerians reported fraud linked to financial service agents.
Distrust in formal financial institutions isn’t just a matter of perception—it has real, far-reaching consequences. Financial exclusion is one of the most significant outcomes. The A2F 2023 reports about 30 million Nigerians unable to access safer and more affordable financial services.
Building the Bridge to Trust
Rebuilding trust in financial institutions is not a quick fix; it requires systemic, intentional change.
Here are three pillars that must guide this transformation:
Transparency and Accountability
Banks must confront their legacy head-on, acknowledging past failures and committing to transparency. For Nigerian banks, this means clear communication about costs, robust fraud prevention measures, and an unwavering focus on safeguarding customer funds.
Reimagined Customer Service
The Nigerian banking experience is currently synonymous with frustration. Long queues, unresolved complaints, and unempathetic staff create a sense of disconnection. Financial institutions must prioritize customer service in meaningful ways. This includes embracing new technologies to improve the customer experience and ensuring that staff are properly trained to engage with customers more empathetically and efficiently. The goal should foster a partnership with clients, making them feel their needs and concerns are heard and addressed.
Embracing Innovation
Nigerian banks have been slow to adopt digital transformation. Embracing technologies like blockchain for enhanced security, AI for personalized customer experiences, and partnerships with fintechs can create innovative solutions that meet the needs of today’s consumers.
A Call to Action
Restoring trust is not easy, but the rewards are immense. For Nigerian financial institutions, this is not just about survival; it’s about seizing the opportunity to redefine themselves in a rapidly evolving financial landscape.
Transparency, customer-centricity, and innovation are no longer optional—they are the foundation of the future. Nigerians deserve financial institutions they can trust. With a commitment to addressing the root causes of distrust—fraud, poor customer service, and outdated technology—Nigerian banks can redefine themselves and reshape the future of finance in the country.
The time to act is now. Trust isn’t just given—it’s earned. And the stakes have never been higher.
Chioma Nwaiwu is a Research Officer at EFInA.
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