How Technology is helping to Increase Access to Financial Services in Nigeria
Source: Feranmi Ajuwon
One of the most critical drivers of economic growth is financial inclusion. This is because access to financial services have so far been proven as a means to empowering people in various ways such as enabling businesses reach a larger market, facilitating the monitoring of inflows and outflows such that risks are minimized and most importantly helping to minimize income inequality.
Though many are still financially excluded in Nigeria with about 42% of the population lacking access to formal financial services (Efina, 2016), technology has enabled the banking industry provide various means through which these excluded persons can access financial services thus serving as an effective tool to bridge the financial inclusion gap.
Following the introduction of the cashless policy by the Central Bank of Nigeria in 2012, the banking sector has witnessed a quantum leap in the use of electronic channels of payment such as internet banking, automated teller machines (ATM), point of sale (PoS) devices and mobile applications, while financial technology (fintech) platforms have become the norm. In addition, many banks have gone further to partner with fintech institutions and the telecommunications industry to facilitate the increased use of these services thus enhancing access to financial services without having to build more branches.
The impact of this is seen in the growth of retail and digital banking, the ecommerce industry and the facilitation of credit services. According to the National Bureau of Statistics, the volume of transactions done through electronic payment channels in Nigeria is about 509.67million as at Q2 2018, while the value of these transactions is worth N32.9billion. Furthermore, with the advent of artificial intelligence, banks can now make use of customer’s data to creatively develop affordable and easily accessible products and services tailored directly to meeting customers’ needs.
With more banks aggressively adopting financial technologies that are moving the bank branch to devices, there is no doubt that more individuals will become financially included in the near future. A case in point is Zenith Bank’s upgrade of its mobile app to support account opening and Qwerty Banking (transactions while using any chatting app like Whatsapp or Telegram). The Bank is also a big investor in the use of Unstructured Supplementary Service Data (USSD) with its *966# short codes. Additionally, its Scan to Pay solution is one of the few in Nigeria that supports MasterPass and mVisa payments.
Despite the strides however, more needs to be done in the area of beefing up financial literacy campaigns such that individuals not only have access to these financial products and services but are able to convert them to improve their financial status.
Feranmi Ajuwon is a freelance content writer and can be reached via firstname.lastname@example.org