DIGITAL BANKING IN NIGERIA AND WHAT YOU SHOULD KNOW
It is almost impossible to see anyone who does not own a bank account in the world today, and one can say that majority of the world’s population has accepted banks as the best saving method.
Some people may want to argue about this, but if you are going to make a comparison of those who do not save with banks, it would be a minimal percentage.
There are numerous banks worldwide, but that is not the focus of this article.
This article would analyze digital banking, especially in Nigeria, and give you all the essential information.
What is Digital Banking
If you are wondering what digital banking means, it is a type of banking system that does not require you to visit a physical banking hall or office before carrying out transactions. With digital banking, you can do all banking activities with the use of gadgets and the internet. This comes as good news for many, especially as it has provision for comfortability.
If you think that digital banking is new globally, you are far from the truth as it is almost as old as internet services. However, it is just gaining popularity worldwide.
Online banking is a system that many banks began to incorporate into their operations, so digital banks are not new. It is not wrong if you would want to describe online banking and digital banking and the same. But, there is a difference.
The difference between online banking and digital banking is that online banking is amongst the services of a bank, meaning that the bank could have both physical activities and online activities, but its online services are restricted. However, digital banks solely operate online and do not have any restrictions. There is no banking activity you need that you cannot carry out with an online bank.
Some of the services of a digital bank include but are not restricted to:
- Payment of Bills
- Withdraw of money
- Applying for loans
- Savings, etc
Suppose digital banking should have a specific history date. In that case, it can be traced back to 1993 when Temenos AG, a banking and financial services company, was founded and is focused on the usage of the internet to perform its services.
ADVANTAGES OF DIGITAL BANKING
People would not be eager to patronize digital banks if it does not have numerous benefits and advantages. Here are some of them:
- Elimination of Queues: Many people do not like to go to banks because of the crowd they would see there. Sometimes, you have to target a specific time to go to a bank, and it might clash with your usual schedule. However, digital banking eliminates this hassle and makes life easier.
- No Charges: Bank charges is one primary concern about banks that people are always voicing out. Sometimes, you can stay and see numerous ridiculous amounts debited from your account, and it would be termed bank charges. Digital banks come as a savior for this as they do not have bank charges.
- Efficient Customer Relationship: Imagine noticing a fraudulent activity with your bank account, and you are in a remote area with no access to the bank. You know that it is a deadly situation before more harm would be done before you can get through to the customer service of the bank. Many non-digital banks entail that a customer physically visits the banking hall before talking to a customer service agent. With digital banks, you can place a call across or chat them up.
- Availability: If there is an urgent need and you have to make a transfer immediately, you can do it with digital banks irrespective of the time of the day. You do not need to waste time and go to the banking hall before it is possible. Digital banking makes transactions more comfortable and quicker.
- Convenience: Sometimes, opening a bank account could take hours or even days as a lot needs to be processed. Some banks may even give a specific amount required before the account can be created. However, it is not so with digital banks. You can open a digital bank account with no money, and it can be done from the comfort of your home.
DISADVANTAGES OF DIGITAL BANKING
People say that anything which has benefits would also have drawbacks. We cannot claim that it is always rosy with digital banking, so here are some disadvantages:
- Traffic: Everyone loves ease and comfort, so there is an increase in the number of people migrating to digital banking. However, this has an adverse effect as it creates extra traffic to the servers of the banks. You will notice that there will be a higher frequency in the number of times the server is down, and this would delay transactions.
- Dependency on the Internet: We earlier stated how digital banking could be traced back to the invention of the internet, as that is how it operates. Imagine you are in an area that has no internet connectivity. Of course, you would not be able to do any transaction with your bank. It can be frustrating when this happens. The dependency on the internet also limits the thriving nature of internet banking as it is not feasible in rural areas that do not have internet. Many of the people in these places cannot use digital banking.
- Security Risk: Although this situation can also happen if it is a physical bank, many argue that it is higher with digital banking. Hackers are everywhere, and there is an increase in the hacking crime rate. Since digital banking works with the internet, it faces a higher security risk as people can get information and databases of customers and may use it to access their personal accounts, thus, draining funds. It is why a password is always required, and you should not share any of the vital details with anybody.
History of Digital Banking in Nigeria
Many Nigerian banks have incorporated online banking into their services, but we can all agree that have online banking features does not classify a bank as a digital bank.
United Bank of Africa is the oldest Nigeria bank and one would take that it would be the first to take a leap at digital banking. However, we are still awaiting what would come from them.
In 2017, WEMA bank announced the WEMA Alat which is its version of digital banking. Thus, making it the first digital bank in Nigeria. We can say that 2017 marks the years digital banking began in Nigeria.
Although Wema Alat is operated by Wema bank, it is a full digital bank whose operates differ from the running of the physical Wema bank. Wema bank has been in existence for about 75 years.
There has been the springing of many digital other banks since Wema Alat, and it is not surprising as people love to venture into things that are operating successfully.
One can say that many people appreciated the creation of Wema Alat as it got more than 250,000 customers in its first year of existence.
It was the Best Digital Bank for 2017 at the World Finance Digital Banking Awards, and Best Digital Bank in Africa at the Asian Banker Awards in 2018.
LIST OF DIGITAL BANKS IN NIGERIA
Some digital banks have sprung up since the establishment of Wema Alat. Here are the digital banks in Nigeria:
- Wema Alat: As the pioneer digital bank, there are many expectations from this bank, and it tries to meet up. There is almost nothing you would require from a physical banking hall that you cannot get with Wema Alat. Some people may expect zero fees on transfers when using this bank, but it is not so. There is a transfer fee of 50 naira per transaction when using Wema Alat. However, many people argue that this fee is low when compared to what usual banks charge. Wema Alat offers you a debit card to make your transactions seamless and allows its customers to take a loan of up to 200,000 naira. It has provision for multiple savings options which appeals to users, and its automated savings plan earns customers a 10 percent annual interest. The signup process for this digital bank is comfortable as it requires you only your phone and internet connection. You can fill in all the required essentials at your pace. Some people complain that the interface of Wema Alat is complicated to navigate, and there is an increase in the number of complaints about their general services. It may be that they are slacking, and may hope for improvement.
- Eyowo: These people describe themselves as a bank that allows you bank with your phone number. It enables people to have savings with interest that starts from 5% and goes up to 13% yearly. It is a considerable rate when compared to what you would get when you bank with a non-digital bank. These people do not necessarily depend on an internet connection but have their focus on phone numbers. Thus, those who own phones but do not have access to the internet can carry out transactions. Typically, this comes in-handy for those who stay in rural areas as many of them cannot afford the internet or usually experience issues while using it. Eyowo allows you to send money to people via their phone numbers, and you can also receive money. The process of sending money also lets you send to their bank accounts. If you wish to take a loan with this bank, it is also feasible. Although the popularity of this digital bank is not high yet, those who use it have commended the bank about its easy and straightforward interface. Eyowo also allows you to pay bills, so there is nothing you desired to do that cannot be done with Eyowo.
- Kuda: The numerous charges that banks bill their customers gets annoying, so Kuda came into existence and prides itself as the bank of the free. It means that they wish to ease down on the charges, including charges you get from other banks when you make transfers. If you use Kuda, you will notice that they would not give you any bill like maintenance fee. Instead, you will get 25 free transfers every month, and you will be charged 10 naira per transaction if you exceed 25. As with any other bank, you can save with Kuda and get an interest of 10% – 5%. One of downside to using Kuda is that it does not have provision for loans. Thus, if this is your aim of banking with them, you will be disappointed. Interestingly, people love when an application has a dark mode version, and Kuda incorporated this feature into its app. Thus, it gives ease to many customers. Another downside to the Kuda app is that fact that all the components are not at thumb’s reach. Some people may complain that it is not simple, but the goal is for the app to work correctly. You can set up a Kuda account within minutes as all your need is your phone and an internet connection.
- Sparkle: Amongst all the digital banks in Nigeria, this is the newest, and it is striving hard amongst its competitors. It is reported that Sparkle is owned by the former CEO of Diamond bank who decided to start up the company after Diamond bank merged with Access bank in 2019. Sparkle offers you a platform which they hope to be interactive as they want to provide transparency at all times. They ensure to give instant notifications in case of any transaction so that you can manage your money effectively. It also allows you to pay any bill you desire whenever you want. Since the CEO had previous experience in the banking sector, the bank strives to ensure that it gives security to its customers, so they make it a significant priority. As a plus, Sparkle allows you to collaborate with merchants at a cheaper rate. You can directly interact with them through Sparkle, and you will be amazed at the offers you would get. They also promise free no extra charges while using their bank, and would give customers free interbank charge till 2021. Since it is new, it is not yet as famous as others. More information would be gotten as time goes on.
- Rubies: Rubies Bank associate themselves with the slogan, ‘The 21st Century Banking Experience.’ They believe that they have an endless stream of idea on how to better the banking sector, and they are always ready to deliver. They do not limit themselves as they offer services to individuals, fintech, businesses, and financial institutions. It provides many benefits, but the focus would be on the digital personal bank. Asides from the fact that you can save with Rubies Bank, it also offers provision for a custom savings plan, and you can easily monitor it. It gives a card to its customers to make transactions more comfortable, and you can fund the account through the debit card or from any other bank account. It assures its customers that although the account opening process is straightforward, they are reliable and secure. They promise that they would not give any cause for regrets. There is something called the Rubies rulebook which allows customizing specific automated instructions on your bank account. Rubies bank does not have provision for its customers to take loans. Other transactions you do with a regular bank can be done using Rubies bank except taking loans. You will get 2%- 5% interest on your savings, and a charge of 10 naira for interbank transfer.
- V Bank: Although it did not initially start as a digital bank, it has come into the scene to make a narrative, and it has been positive remarks so far. Some of the features and offers of V bank has made it popular amongst many, and people who wish to patronize digital banks have it as one of their top choices. It may be because it has zero hidden charges as even interbank transfers are free. Other digital banks subside the cost of interbank transfers for its customers, but V Bank ensures that it happens at no cost. This bank also goes further to ensure that it has a provision of loans for its customers, so they are ready to assist in times of emergency. It is slowly proving itself to be a bank for the people, and its customers are commending the efforts so far. If you own a savings account with V Bank, you will get 8% – 14% interest. However, users complain sometimes about the cashless withdrawal, but this does not invalidate other efficient features of the bank. After all, whatever has an advantage is also prone to have a disadvantage. You can pay bills with your V Bank account, and budgeting is also made possible. Time shall tell the position this bank would have amongst the ratings of digital banks in Nigeria.
- Bank with Mint: It would not be proper to causally discuss one digital banks that is making waves, so it is right for it to be properly disserted.
Bank with Mint
As with any other digital bank, you know that you stand to benefit a lot from Bank with Mint. It has mouthwatering offers that make it hard for anyone to refuse registering and owning an account with this bank.
Are you in doubt? Check them out:
- Seamless Account Opening Process: It is common knowledge that you cannot escape paperwork if you are setting up an account with regular banks, but you are saved of this stress when you decide to sign up on Bank with Mint. When you download the application on your phone, it does not take time for you to get started. The best part of it all is that the application is compatible on all devices, so there is no hassle of if it is an android phone or IOS; it also has web compatibility. In the same vein, you can have the application downloaded on all devices and have them running simultaneously.
- Customer Service: Bank with Mint has efficient hands on board to ensure that they always resolve the issues of their clients. With other regular banks, you are met with the issue of long waiting time on the phone before you can get through to a customer service agent; wasting your time and credit. Sometimes, it does not connect after the long wait. However, you can avoid this if you use Bank with Mint as its website and application have an interface where you can chat with representatives of the bank. The best part of it is that these people are always available 24/7. Thus, your issue can be resolved even at midnight.
- Instant Notifications: Bank with Mint understand the need for transparency with its customers, so it does not delay in sending notifications when you carry out any transaction. It also helps to eliminate the idea of confusion. You will agree that some regular banks delay in sending notifications, and you can sometimes get the alert for a transaction after 3 days. It confuses the customer as they stay trying to figure out what led to the notification they are getting. If you own a Bank with Mint account, you are assured of instant notifications always so that you can know about your money.
- Flexible Saving Options: As a digital bank, it understands the need that customers have for savings. After all, savings is one of the reasons why people patronize banks. Thus, it is only right to have attractive and flexible saving options. You can control your savings goal as it has the option of allowing customers to make one-time savings or something that can be done periodically. As a customer with this bank, you can set goals based on your needs and link an account where it can be making debits. Bank with Mint strives to ensure that its customers never lack in rainy days.
- Interest: Regular banks give its customers interest when they save, so you should also expect this from Bank with Mint. We cannot provide a specific figure on the percentage that this bank offers, but we can assure that it is higher than what you would get from regular banks. However, the minimum interest rate you can get from Bank with Mint is 6%. When you decide to save with this bank, three tiers offer different interest rates. It is left to you to choose the best suitable option. However, you should know that the higher you save, the higher interest you would get.
- Skip Queues: one of the top-most factors that make people decide to use a digital bank is the fact that they get to skip the hassle of long queues that are associated with regular physical banks. However, it is not the case with all digital banks. Some digital banks usually have irregularities and faults that leave their customers frustrated and with no other choice than to visit the physical office so that they can resolve the issue. However, if you have a Bank with Mint account, you have the assurance that you would not have any reason to visit the physical office.
- Payment of Bills: At a point in life, you would need to pay different bills, and it would require a bank. Would you rather go through rigorous processes at a banking hall or be able to pay bills at the click of a finger from the comfort of your home? Bank with Mint offers you a luxurious bill payment process to ensure that you do not encounter any stress. When you download the app, you would notice that it has an easy to operate interface. Thus, you will not have any complaint or encounter any difficulty. Irrespective of the time in the day you need to pay your bills, Bank with Mint is there for you.
- Charges: Exorbitant charges is amongst the numerous complains that people have about regular banks, and Bank with Mint is here to ensure that its customers do not experience such. Sometimes you would stay and get numerous debit alerts which would have you panicking thinking that someone has gained access to your account. However, you would later discover that all the debits were for bank charges. Bank with Mint is not here to drop fake promises, but they have the fairest charges rate amongst all the banks. Bank with Mint charges its customers 1 naira per month as maintenance fee per million. It is the fairest you would get in the country.
- Budget Planner: Bank with Mint understands how some customers get lost in expenses and wishes to help them with effective planning. They have plans for a budget planner which is not out yet, but other functions are in place such as the mint tips which are built from your transaction history. Your Account learns as you spend, meaning it can suggest how you can save better, reduce spending on certain categories to meet your goals, and even enjoy discounts on common expenses. It also helps to set limits on spending as the bank understands that it can be tasking to keep track of how much you spend while staying on track with your goals. That’s why we put you in control to set limits as often as you want. Want to minimize expenses daily, or be more flexible for emergencies? Your Mint Account is there to help.
Bank with Mint has many benefits, and we would not be wrong to classify it as the best digital bank in Nigeria currently. You should download and set up your account as a trial, would convince you.
If you desire a stress and hassle free banking process, you should create a Bank with Mint account!