The impact of Digital Banking on Financial Accessibility in Nigeria

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MOBILE DIGITAL SERVICES

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The use of mobile and internet banking services, Automated Teller Machines, Point Of Sale (POS) operations and other Mobile money services has increased tremendously in recent times in Nigeria owing to the digitalization of financial operations. With this, it has become much easier and faster to access and manage our finances; to send, receive or withdraw money. Similarly, loan services and online payment services have also been incorporated, making such services easier to access and use. Thus, digital banking now serves as a powerful tool that bridges the gap and provides quicker financial services to everyone in urban or rural parts of Nigeria.

This recent financial advancement is driven by the rapid growth of financial technology and its operations, and with this trend, we can notice the significant impact on the Nigerian economy, which is obviously one of Africa’s largest economies.

Our aim, in this piece, is to explore the impact of digital banking on financial accessibility in Nigeria, and to do this we shall present an overview of digital banking solutions and applications, as well as other digital solutions for mobile payments in Nigeria, then we shall give an assessment of how digital banking has improved financial accessibility in Nigeria; put differently, how it has become easier to manage and control our finances in Nigeria owing to digital banking. Finally, we shall discuss the challenges in digital banking adoption in Nigeria.

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OVERVIEW OF DIGITAL BANKING SOLUTIONS AND APPLICATIONS

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In our present day, digital banking in Nigeria continues to flourish owing to the rise in the multiple applications and solutions that are being developed. These applications tend to offer solutions to specific or multiple issues; however, each isn’t sufficient to provide solutions to all issues. Thus, to a very large extent, they complement each other in their attempt to ease the stress on financial accessibility in the country.

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Mobile Banking applications

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With the emergence of Mobile Banking applications, individuals are no longer required to go to banks physically in order to carry out banking related transactions, instead they can perform most of the banking related transactions through their mobile phones. They are only required to connect their bank account to their mobile banking applications, internet banking services or the USSD banking services. When this is done, they can carry out their payment transactions which ranges from sending or receiving money to making payments for airtime, utility bills and travel bills.

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Automated Teller Machine (ATM)

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The Automated Teller Machine came in as a response to the need to make some cash related transactions outside the banking hall since mobile banking applications don’t deal with “physical cash.” Thus, in the case of the Automated Teller Machine, there’s opportunity for withdrawal of cash from one’s account and transfer of cash to another’s account using your unique ATM card. Also, since the ATM are positioned at various stands; within banking premises, super market premises and locations where people converge daily, it makes it easily accessible to people to make this type of transactions.

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Point of Sale (POS)

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The Automated Teller Machine was a ground-breaking solution to the need to perform cash related transactions, however, it was limited in its presence across many rural communities. In this case, individuals had to line up in long queues to make these transactions at central areas in the community, and some of these ATM stalls also had limited cash in it. Thus, the Point-of-Sale operatives came on board to make this exercise less burdensome. In the case of the POS operations, the operators use a smaller machine which is connected to their local account, and through this machine they offer services such as sending, receiving or withdrawing cash for customers.

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Other Digital Wallets and Mobile Money services

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Aside the banking applications and solutions, other digital wallets also exist which enables you send and receive money, make payment for online purchases and pay for utility bills, among many others. Some of these services came on board to respond to the restrictions on international transactions on the Naira cards which is capped at $20. Also, many of these digital wallets provide the opportunities for Point Of Sale services. Some of the well-known mobile wallets include: Opay, PalmPay, Flutterwave, Paga and Chippercash. Some of these wallets also makes international transactions easy and faster.

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QR code-based payments

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One recent trend in the financial sector is the emergence of the Quick Response Code, which is widely known as the QR code. With the QR code, users are required to scan the barcode with their mobile and other related devices, and, with this, individuals can make financial transactions quickly via their mobile wallets.

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ADVANTAGES OF DIGITAL BANKING FOR FINANCIAL ACCESSIBILITY

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Having given an overview of the digital banking services and applications we have in Nigeria, it is apt, at this juncture, to discuss the advantages of these digital banking solutions and how they have aided to promote financial accessibility in Nigeria.

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Increased Accessibility, Convenience and Flexibility:

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The digital banking operations have increased access to banking services and operations in Nigeria. With this, individuals now have the option to carry out transactions from the comfort of their homes or on-the-road with their mobile phones and other services without relying on their presence in the banking hall before these transactions can be done. Thus, transactions can be easily carried out during non-banking days/hours, as well as at midnight with ease.

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Reduction in transaction costs and time:

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Unlike the traditional banking services which requires your physical presence in banking halls no matter the distance, mobile banking services can be carried out from anywhere and at any time via your mobile devices. Thus, this implies that you are not required to spend much time to go to the banking halls, or much money to transport yourself to the banking location or to stand in the long queues in the bank before you can make financial transactions. Thus, this saves time and reduces the expenses or cost involved in such transactions if it were done physically.

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CHALLENGES IN DIGITAL BANKING ADOPTION

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In as much as the digital banking services have greatly improved financial accessibility in Nigeria, there are some challenges which have bedeviled these services in Nigeria. They include:

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Infrastructural limitations and Network Connectivity Issues:

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While using many mobile money services in Nigeria, many users experience certain issues from network connectivity to the limitations of that particular services. In this case, transactions get to be delayed or cancelled, and sometimes the money may get stuck. Similarly, the banks sometimes make it really difficult for us to get refunds, and thus, this creates deep trust issues between ourselves and these services.

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Security Concerns and Fraud:

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With the rise of mobile banking services, there have been an alarming increase in the rate of scammers trying to steal moneys from individuals by asking them of their details in a crook manner.

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It is important that these issues are addressed so that more people may get to benefit from the financial accessibility that these services offer. However, if more people begin to lose trust in these services and their security challenges, it may be more difficult for it to succeed.

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• Logo Collage property of: Hive Learners, Ecency, Leofinance, Hive, 3speak and Ksam.
• Designs created via Canva Mobile App
• Images are mine

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I AM KSAM

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_{I may not be your favourite author, but you can journey with me to help me develop my writing skills. I am always open to criticism, correction and learning 🥰.}