Covid-19 sparks digital banking rush in Nigeria

Many customers who previously avoided e-payment services are being converted following the Covid-19 induced lockdown. Michael Nwadike reports from Lagos

Festus Charles, a 45-year old factory worker based in Lagos, used to have nothing but disdain for e-banking products and services from his banks. He would give countless reasons why e-banking services were unsafe – ranging from excessive bank charges to outright loss of funds to cybercriminals. 

Charles insists he had no reason to abandon cash-based transactions. But his views on internet banking and other e-payment channels changed drastically after the Nigerian government implemented a five-week total economic lockdown in Lagos state, Ogun state and Federal Capital Territory Abuja on March 30 due to the outbreak of the Covid-19 pandemic.

In those weeks, many Nigerians relied on ATMs, Point of Sale (PoS) machines and other e-payment channels to pay for essential commodities as bank branches were closed.

“I was virtually begging everyone I knew to lend me cash and promised to pay after the lockdown was lifted. For the first time in my life, I realised that e-payment channels are essential despite risks associated with them,” he says. 

True to his promise, he was one of thousands of customers who rushed to their bank branches to open new accounts, acquire ATM cards and start internet banking, among other measures when the lockdown was partially lifted in May. Many of the banks witnessed large customer turnout in their branches, with canopies and chairs set up in front of their premises for customers to sit while waiting to be attended to.

Banks invest in technology

The increased demand for digital products and services has prompted many banks to invest more in technology to strengthen their digital services.

In an emailed note to customers, Access Bank said 2020 has redefined how people live and do business amidst the Covid-19 pandemic. “Fortunately, with the improvements on our mobile, internet banking, most of your everyday financial transactions can safely be completed from the comfort of your home using your computer or phone,” it said.

Samson Aneke, group head, digital banking at UBA says his bank has upgraded its mobile app to do more for customers. He says the bank was taking services to the devices that customers hold themselves.

“You would be happier to use the device you came out with from your home to transact than shared facilities. Our new mobile app enables users to view transaction history, net worth, trends amongst others at a glance. We are also considering voice banking across various channels,” he says.

Callistus Obetta, group executive, tech and services at FirstBank, gives an insight on how his bank is using technology to connect with its customers and workforce. He says that organisations needed to build resilient business operations beyond the lockdown period, and that technology would continue to play a dominant role in achieving this. Obetta says the boundaries between the physical, biological and technological walls are blurring, with the convergence between robotics, artificial intelligence. The combination of all these, he adds, will create massive disruption.

“We came up with a completely digital IT strategy, which looks at our infrastructure strategy and security,” he says.

Obetta says his bank, even before the Covid-19 pandemic, had over 85% of its customers initiating digital transactions. “For us, it is important that our platform remains in top shape, because it is primarily the only medium of engagement. A lot of our workforce are now working remotely, and we are able to scale up based on demand and have seen unprecedented growth on our channels.”

Ensuring customers’ safety

Bola Adesola, senior vice-chairman, Africa Standard Chartered Bank Group, says Covid-19 has had an enormous impact on people’s lives and businesses. “As a sense of danger and loss looms, the bank’s priority is to ensure the safety, security and wellbeing of its workforce and managing business vulnerabilities, while maintaining some level of productivity,” she says.

For Abubakar Suleiman, managing director at Sterling Bank, there is a need for banks to keep innovating through the crisis, including planning ahead and staying connected to the customer.

“We have introduced new products and services that support online lending, omni-channel mobile banking platforms and applications that enable people to invest in treasury bills from any location of their convenience,” he says.

However, the number of cybercriminals targeting customer accounts have increased as more people go for e-payment channels.

Isaac Okorafor, a Central Bank of Nigeria director who advises bank customers not to disclose their sensitive bank details to third parties, says cybercriminals are taking advantage of the pandemic to steal sensitive information, or gain unauthorised access to computers or mobile devices using different techniques.

He says that the criminals ask unsuspecting customers to download fraudulent mobile bank apps, which they use to steal information from their victims’ mobile phones.

Other stakeholders insist that despite the risks associated with e-payment, deepening technology infrastructure should be the focus of banks as more people adopt the technology to solve their problems in the new era.