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Exploring branchless, other digital forms of banking in a crisis

Banks these days have the digital options that allow their customers to manage the vast majority of banking needs without leaving their homes.

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Digital technology and blockchain altering conventional banking models - Emefiele, Exploring branchless and other digital forms of banking in a crisis

We are certainly living in unprecedented times. An indicator, which calls for concern, is how the number of Coronavirus cases has increased from 2 to 81 in the span of some weeks in Nigeria and unfortunately, this continues to rise with each passing hour. Many countries are reaching a rather critical infection juncture where things may likely get out of control.

The Nigerian government, especially in Lagos, has begun to implement the “self-quarantine” rule for its residents. Over this past week, churches, mosques and even banks have begun taking precautions against the spread of the virus.

Recession looms as UN, ILO declare 25 million will become jobless

Union Bank announced that it had instructed its employees who can work from home to do just that during this period. Ecobank sent a circular to all vendors not to come to its locations except for essential services and pre-approval.

Even more recently, Access Bank Plc announced that an individual, who visited one of their branches in Lagos on the 16th of March, 2020 was tested positive for the virus, and so the bank urged its customers to take full advantage of their digital platforms instead for all their banking needs.

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The chaotic effects of the pandemic make it rather unclear what the Nigerian financial services industry will look like after the crisis is over, especially in banking. Fortunately, banks these days have the digital options that allow their customers to manage the vast majority of banking needs without leaving their homes. Now more than ever, the importance of exploring digital platforms and tools in banking or the lack thereof is increasingly highlighted.

[READ MORE: Digital payments sustains surge, affirms growth prospects)

Therefore these questions arise:

  • Are Nigerian Fintechs prepared for the worst possible outcome in a global crisis?
  • Giving that with any significant market pullback, opportunities will eventually arise amid the disruptions, are they ready to employ all tactics needed to milk these opportunities?
  • Is this an opportunity to strive for a future where digital and branchless banking solely driven by technology could change the way we bank?

Globally, there is an indication that the pandemic could hasten all forms of digital banking trends, and bankers are reporting that digital usage is rising alongside the proliferation of the virus. In many cases, it is surging.

Nigeria records a rather significant number of people with a preference for online and mobile banking, however, there is still is a large number of people who depend solely on brick and mortar banks to manage their finances. Could bank agents be the solution for these categories of customers?

To keep up with safety precautions, more Nigerian banks may need to encourage the use of online and mobile platforms and increase their assistance with customers to execute work outside the branch and as well as encourage the activities of their various agents with branchless banking.

It is undeniable that in the past few years, branchless banking, which has relatively become a mantra for Nigeria, has been impactful in facilitating financial inclusion. Inclusion has always been a concern in most countries of the world and even more so in Nigeria due to certain geographic conditions of the country. Over and again, we discuss the challenges to reach out to the underbanked rural areas within the country.

The increasing fear and quarantine measures are bound to keep customers away from bank branches at this time, so the opportunities abound in branchless banking can now be fully explored. The outbreak also makes this a great time to make a move toward a germ- free banking experience. This will facilitate the process of financial inclusion as it allows access to people in remote areas and is preferential to younger generations and most importantly is much more cost-effective.

[READ ALSO: COVID-19 Pandemic: Ecobank encourages customers to adopt digital self-service solutions)

The truth with everything happening, we might not have much of a choice than to fully adopt technology and digital banking seeing as for the foreseeable future, movements will be limited to its barest possible minimum and rightly so.

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There are many upsides to fully adopting digital and branchless banking, and Nigeria has successfully adopted agency banking in this sector but more importantly, these suggestions will help permit the full transformation of our financial services industry especially at a time like this:

  • Retail outlets: Remote or not, every neighbourhood has a number of retail stores offering a variety of products but not financial services. There is no time or money for banks to spend on building their own retail presence right now. Exploring these existing retail outlets offers the opportunity to create a familiar service environment for less educated people helping them feel safe rather than intimidated or overwhelmed.
  • Trust through technology: In the adoption of branchless banking, as bank-customer interface shifts to a third-party retail environment ensuring trust is paramount. Even in fear, customers need to have confidence in the activities carried out by both bank agents and non-bank agents.
  • Mobile phones: Nigerians already have implemented the culture of USSD codes, we, however, need to explore that even more. Ensuring that mobile phone users can enjoy financial services with speed and ease could change the entire user experience.

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The barriers to customer adoption have less to do with attitudes about technology (fear of change, unfamiliar user interfaces, security concerns, etc. although that is valid as well) than with communicating precise customer benefits and financial incentives for various business providers.

When you consider the hundred thousand bank agents operating in all forms of mobile money platforms for receiving and making payments in the city of Lagos alone, it shows that the electronic value transfer system can go even further if only experts can be deliberate in their inclusion efforts and that users have a real incentive to use them, now is perfect as there is an urgent need for social distancing and a limit to physical contact that cannot be achieved with the regular banks.

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform. To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

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Coronavirus

COVID-19 Update in Nigeria

On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria.

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 56,956 confirmed cases.

On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria, having carried out a total daily test of 2,609 samples across the country.

To date, 56,956 cases have been confirmed, 48,305 cases have been discharged and 1,094 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 482,321  tests have been carried out as of September 18th, 2020 compared to 479,712 tests a day earlier.

COVID-19 Case Updates- 18th September 2020,

  • Total Number of Cases – 56,956
  • Total Number Discharged – 48,305
  • Total Deaths – 1,094
  • Total Tests Carried out – 482,321

According to the NCDC, the 221 new cases were reported from 18 states- Lagos (59), Abia (46), FCT (22), Gombe (20), Plateau (17), Rivers (11), Bauchi (7), Benue (6), Ekiti (6), Imo (6), Kaduna (4), Kwara (4), Ondo (4), Ogun (3), Osun (3), Bayelsa (1), Edo (1), Kano (1)

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,827, followed by Abuja (5,526), Oyo (3,226), Plateau (3,192), Edo (2,611), Kaduna (2,326), Rivers (2,220), Delta (1,799), Ogun (1,758), Kano (1,734), Ondo (1,594), Enugu (1,234), Ebonyi (1,035), Kwara (1,013), Abia (881), Katsina (845), Osun (810), Gombe (799), Borno (741), and Bauchi (689).

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Imo State has recorded 557 cases, Benue (473), Nasarawa (447), Bayelsa (394),  Jigawa (322), Ekiti (313), Akwa Ibom (288), Niger (250), Anambra (232), Adamawa (230), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (73), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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Business

BREAKING: Fire guts fuel tanker, vehicles at Anthony, Lagos

The tanker conveying PMS lost control while in motion and subsequently fell sideways.

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NNPC reacts to Lagos pipeline explosion

There is a fire outbreak, which has gutted a fuel tanker, at Anthony inward Gbagada, Lagos State.

This was disclosed by the Federal Fire Service via its Twitter handle on Friday evening. The incident, which occurred around 10 pm, has razed at least two vehicles.

The agency urged road users to avoid the area and take alternative routes.

Also, the Director-General of the Lagos State Emergency Agency, Dr Olufemi Oke-Osanyintolu, confirmed the incident.

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He said, “The Agency responded to distress calls and upon arrival at the scene of incident, it was discovered that a tanker with unknown registration number conveying PMS lost control while in motion and subsequently fell sideways.

“This led to an explosion in which two unidentified vehicles were burnt.”

A joint team of responders led by the Federal Fire Service, LASEMA, LASG fire service, LRU fire unit, Nigeria Police and LASTMA are working together to curb the inferno from escalating further.

Details soon …

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Tech News

Facebook to open Lagos office in 2021

When the social media giant comes to Nigeria, it will be its second office on the African continent.

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Facebook set to award $3 million in Community Accelerator program, Facebook to invest $100 million in media houses as coronavirus crashes their revenue, Facebook to expand Coronavirus Information Centre to Nigeria, 16 other African countries

Social Media giant, Facebook announced it would open an office in Lagos in 2021, its second office in the continent and the first in Africa to house software engineers.

This was announced by Facebook Program Manager, Chimdindu Aneke on social media. “We are opening a Facebook office in Lagos, Nigeria later in 2021,” he said.

He added that the office would be the first in Africa by Facebook for the purpose of engineering and “building for the future of Africa and beyond”.

Media aide to the Presidency, Tolu Ogunlesi quoted Facebook saying, “As part of its continued commitment and ongoing investment in Africa, Facebook today announced it will be opening an office in Lagos, Nigeria – its second office on the African continent.”

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In 2019, Facebook’s biggest market in Africa was Nigeria with 33 million monthly active users.

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