Deepening Banking through Fintech

Banking in Nigeria has taken so many technological dimensions, innovations, creativity and ease of carrying out financial transactions, all evolving as financial technology (fintech) companies.

Fintech is a new trending innovative technology aimed at improving activities in the finance industry. This include: digitalising process, processes previously handled with paper money and human transactions.

The advent of fintech could be attributed to the cashless economy policy introduced by the Central Bank of Nigeria (CBN).

The President, Fintech Association of Nigeria, Dr Segun Aina, said there was no doubt that “Africa is becoming the toast of global and local Fintech investors as evident by the volume of funds being channelled into the continent’s Fintech start-ups’’.

Aina, quoting Financial Focus Journal of PwC in Africa, said: “Fintech investments are estimated to have increased by a Compound Annual Growth Rate (CAGR) of over 58 per cent between 2014 and 2016 to 800 million dollars.

“It can possibly be valued at three billion dollars by 2020 with Nigeria and South Africa receiving a significant portion of the investments.

“Non-Governmental Organisations have also been relentless in funding innovations in order to drive financial inclusion in Sub-Saharan Africa, thereby reducing poverty and engendering conditions that improve living conditions on the continent.’’ he said.

Not only are fintechs providing employment opportunities, but also boosting the nation`s economy, especially with the drive for 80 per cent financial inclusion by 2020.

Also in its drive to achieve financial inclusion, First Bank of Nigeria (FBN) has followed up in the drive by providing various platforms whereby over 12 million customers and still counting, have access to technological innovations to carry out their banking transactions.

The FBN, also through the technological innovations introduced into banking (Fintechs), empowered start-ups with unique innovative ideas and created employment.

Fintechs and financial inclusion are interwoven and major ingredients for success to be achieved in the finance industry.

The FBN Managing Director, Dr Adesola Adeduntan, said at the launch of Whatsapp Banking that, as a leading banking services provider, FBN was determined to offer satisfactory financial services to customers by devising ways of effectively meeting their needs.

Adeduntan said that the bank had optimised digital banking for convenience.

“Since we have 12.5 million customers with 20 billion worth of transactions monthly, it has become necessary for us to create new technology innovations to meet their needs.

“Our FirstMobile app, Firstonline, FirstMonie and USSD banking are some of the channels we have put in place to make this happen.

“FirstBank Chat Banking on Whatsapp is our latest addition. We have gone live with this product and we are pleased to formally introduce this product to our media partners today,’’ he said.

The managing director said that the app was another significant milestone in the bank’s mission to provide convenient and fast payment solutions to its customers.

He said: “It is a new channel for access to our services; a convenient way to make payment and an easy-to-use banking application.

“Banking with FirstBank on WhatsApp is secure, accessible and convenient.

“You can now carry out basic banking transactions such as inter and intra bank fund transfer, pay bills, buy airtime, buy data and check your account balance on your WhatsApp.’’

Adeduntan added that customers would be able to generate a WhatsApp banking PIN to be able to carry out the transactions.

He explained that transaction authentication would be done using a safe link, thereby ensuring the security of banking details.

First Bank of Nigeria had earlier organised a `Hackathon’competition and rewarded startups with innovative ideas that would boost or bring about ease of carrying out financial transactions.

Mrs Folake Ani -Mumuney, Group Head, Marketing and Corporate Communications of FBN, said the event was convened to increase support and collaboration with the technology community and deepen the banks technological inclusion framework.

Ani-Mumuney said that banks, to drive financial inclusion, must structure highly-relevant and simplified financial solutions that meet the specific needs of their customers at an affordable cost.

She said that understanding customers’ needs before pushing outtechnology innovations was very essential.

Another innovation is the Whatsapp banking. It is a known fact that Whatsapp is most widely used and fastest form of chatting and its introduction into banking had made banking accessible.

Mrs Lola Ekugo, Head, Digital Innovation Lab, said: “We launched Whatsapp banking to serve our customers.

“What we are saying is that for our customers, we want convenience for them. Whatsapp banking is the most widely used chatting platform.

“You are already carrying out conversations on the Whatsapp; so why not just bank.

“We are meeting our customers where they are; we are already there.

“You can chat; you can carry out your transactions or check your balance; send money to your friends; buy airtime all on Whatsapp.

“The Whatsapp banking is very friendly. We modeled it similar to what we do on the Unstructured Supplementary Service Data (USSD) platform.

“So in terms of charging, we are not going to charge anymore. For us, it is for convenience for our customers.

“Anybody can use it especially if you are on Whatsapp,’’

According to her, CBN gave a target of 80 per cent financial inclusion by 2020 and we as a bank, we are also thinking about our customers.

“This will potentially allow you to transact more. So, wherever you are or whoever you are, as long as you have Whatsapp, you can transact.

“We are working toward financial inclusion as well as how would it affect the economy. Even the traders would be able to pay bills without leaving their stalls,’’ Ekugo said.

She said that those who could not use the Whatsapp, could use the USSD so that the under-served can be financially included.

Ekugo said accessible digital channels would provide greaterconvenience for customers at a lower cost for banks and also provide solutions to challenges related to infrastructure in the country.

“We recognise the fact that some of our customers who have small phones, cannot use the app because of the limitation of data. That is why we have options which our customers can key into to access financial services,’’ she said.

Mr Chuma Ezirim, a financial expert, said that the Whatsapp banking was an encouraging innovation that would enable active banking among customers.

According to him, it will also contribute to the economy by getting those financially excluded to be financially included.

Ezirim said that the only impediment of the chat banking “is if a customer has a small phone or limited data’’.

He said that in such a case, the other platforms could be accessed.

“This would leave no doubt that not only is First Bank striving to achieve financial inclusion but also rendering Corporate Social Responsibility (CSR) through the “Hackathon’’ competition that empowered youths.

It is noteworthy that Fintech has come to stay to enable banks and other financial services providers to provide value-adding services to meet their numerous customers’ increasing needs.

There is no doubt that Fintech will revolutionise the banking and financial services delivery systems and improve the way services are delivered to customers.