The need to make financial transactions digital and cashless, coupled with the growing demands by bank customers, have compelled banks to become more innovative, using technology solutions, writes Emma Okonji
The introduction and implementation of the cashless initiative by the Central Bank of Nigeria (CBN) in 2012, no doubt, aroused the appetite of bank customers to place more demands on banks in the areas of improved infrastructure and innovative technology solutions that will enable them enjoy the benefits and convenience associated with cashless economy.
The motive behind the introduction of cashless economy was to reduce the amount of physical cash circulating in the economy and to encourage more electronic-based transactions, designed to drive development and modernisation of payment system as well as to reduce the cost of banking services and to drive financial inclusion by providing more efficient transaction options and greater reach. But the resultant effect of such motive has compelled banks to become more innovative, just to catch-up with customers’ new demands.
The United Bank for Africa (UBA) Plc, which has been at the forefront of technology innovation in the banking sector since 2012, following the commencement of cashless policy in Lagos State, had since then, introduced varieties of technology innovation that are driving the financial sector.
Head, Consumer and Digital Banking at UBA, Dr. Yinka Adedeji, who spoke on technology innovation in the banking sector in Lagos recently, said the cashless initiative of the CBN was fast gaining acceptance both in urban and rural communities because of the convenience that technology innovation has brought to the banking sector.
Adedeji, who reiterated his bank’s commitment to empower more Nigerians through innovative banking solutions, said UBA had in the past, developed innovative technology apps that empowered its customers to do more financial transactions from the comfort of their homes, without visiting the bank.
From the inception of cashless policy in 2012, beginning with Lagos State, new trends have continued to evolve in the banking sector despite CBN’s removal of the penalties on digital payments and collections. The adoption of digital payments has grown in the last one year, signaling a growth rate that is beyond just penalties. People now see more convenience and better security features in using digital channels, a situation that has led to the increase in customers’ demand for improved banking services.
Giving insight to the new trends, Adedeji said: “Banks have experienced rapid changes in the past four years, such that about 70 per cent of bank deposits now come from digital channels, like internet banking, mobile banking, card transfers using Automated Teller Machines (ATM), and Point of Sales (PoS) terminals, compared to about 30 per cent of bank deposits that come from cheques and physical cash.”
Today banks have recorded over 80 per cent outflow of cash through the digital channels that are made available to customers.
These are new developments in the banking sector and they are driving financial growth across banks, and at the same time, increasing customers’ demand for better and convenient services.
Technology is driving all these innovations and growth and the banks have invested so much in technology to meet growing demands. UBA is one bank that has invested heavily in technology and this has triggered the positive changes that UBA customers are experiencing in the banking industry.
Before now, consumer banking used to be separate from digital banking, but today it is difficult to do consumer banking without carrying out digital banking.
The banking operations are gradually changing from opening customer account and providing convenient service to the customer after opening the account, to a situation where customers now freely open bank accounts because of the convenience that is attached to owning a bank account. The current trend is that banks first of all offer convenient customer services before the customer is attracted to open an account to enjoy the existing customer services.
“My role today in UBA is Head, Consumer and Digital Banking, unlike before when it used to be only Head, Consumer Banking and this is strategic because of the evolving trends in the financial sector. Methods of doing remittances in banks have changed to digital, to enable the banks serve their customers better and faster,” Adedeji said.
As at today, banking transactions have been made easier. People can now pay online for their air tickets, utility bills, electricity bills, among others. People can now open bank accounts online without necessarily going into the banking hall, and all these have led to increased customer demand from banks, while the banks are making efforts to address the new trends, using technology solutions.
Other evolving trends
Just as customers’ demands are on the increase, the CBN is also coming with new ideas that would address other evolving trends. The CBN for instance, has allowed customers to lodge up to N2 million into their savings account, using cheques, which was not possible before now, based on financial regulations. So today, customers can run small businesses using a savings account, by depositing cheques into their savings account and people can transact up to N2 million on their savings account.
There are also new developments to bank the unbanked, using instant and electronic channels.
Again, CBN has increased the minimum transactions for ‘Know Your Customer’ (KYC) accounts from N20,000 to N50,000 per day. Students account can also receive as much as N50, 000 and UBA, alongside other banks are at the forefront implementing all of these, hence UBA is rated high in financial transactions across Africa.
With over 10 million customer accounts across the African continent, and over eight million bank accounts spread across Nigeria, UBA said it planned to double the number of such accounts very soon, since the CBN is encouraging more account opening.
Flexibility in banking operations
Talking about flexibility and ease of banking, Adedeji said most banks are fast deploying technology that is enabling ease of financial transactions. He, however, said that UBA has increased the flexibility of internet banking in order to bring in more customers to enjoy the benefits.
“For example, UBA has changed the name of its mobile banking from U-Mobile to UBA Mobile Banking and we also changed from U-Direct Banking to UBA Internet Banking. The changes further simplify our banking operations and give customers better sense of understanding of their financial transactions. Again, we have downloadable apps that could be used for our mobile banking and customers could install them on their mobile devices, downloaded from Google Play. We also have apps that could be used without token device, such that when the app is downloaded, people can actually do secured financial transactions, using the app, without the need for the token,” Adedeji said.
Deploying tech solutions
In order to meet the increasing demand of bank customers, banks have come up with new technology solutions that are not only making financial transactions easier, but also making them secured. The latest technology innovation and deployment from UBA, is ‘Email Moni’, which allows people to send money to customers’ email accounts, which is quite different from sending money to customers’ bank accounts. Announcing the innovation, Adedeji said it is easier to know people’s email addresses than bank account numbers, and this makes it a lot easier to transfer money to several email accounts at the same time, thus reaching out to more people digitally.
“We have launched ‘Email Moni’ officially and it is available in any UBA branch. People can actually send money via internet banking directly to the email account of someone. So people can do multiple money transfers to several email addresses and they receive it as financial figures on their emails. The platform also allows people to request for money from someone, other than sending money to someone. If money is requested, the person has the option to accept the request or decline it. Once it is accepted, the exact amount requested is debited from the account and sent via email to the address where the request came from.
So money could be sent to several people at the same time. What people need do is to enroll for the service and attach their bank accounts,” Adedeji said.
According to him, UBA is using digital identity to replace account numbers. The system has been tested and it is safe.
“Transaction limit with ‘Email Moni’ for individuals is N20,000 per transaction per day, with one time password, which could be increased to N2 million upon request by the customer. But for corporate accounts, there is no limit to transaction. Again, people do not need to have bank account with UBA in order to use the ‘Email Moni’ platform,” Adedeji added.
Point of Sales (PoS) machines
Another technology solution that has been improved upon to meet customers’ demand is the Point of Sales (PoS) machines, where customers could carry out financial transactions with merchant agents, aside using the Automated Teller Machines (ATMs). PoS has gone beyond payments. Some PoS today can be used to pay bills like utility bills and electricity bills and financial transactions are becoming a lot easier because a lot of flexibilities have been introduced to PoS machines by banks.
Although the introduction of cashless policy has increased customers’ demand in the financial sector, the adoption rate of cashless by bank customers has been exceedingly good and encouraging. Most Nigerians including traders and artisans, have since seen the benefits of going cashless and they are fast embracing it.