Promoting Financial Inclusion
Ugo Aliogo writes on the contribution of FirstBank Nigeria Limited to Nigeria’s financial inclusion journey
The mobile phone has become a veritable tool for enhancing financial inclusion and has continued to support mobile payments, m-commerce, m-banking and other financial transactions, a study has revealed.
A Central Bank of Nigeria (CBN) study on regulatory framework for the Use of Unstructured Supplementary Services Data for Financial Services in Nigeria, explained that providers of mobile-based financial services have options of adopting varying technologies for enabling access and transmitting data including Short Messaging Service (SMS), Unstructured Supplementary Service Data (USSD), Interactive Voice Response (IVR) and Wireless Application Protocol (WAP), stand-alone mobile application clients and SIM Tool Kit (STK).
The study further observed that the USSD technology is a protocol used by the GSM network to communicate with a service provider’s platform.
It stated: “The USSD technology is a session based, real time messaging communication technology, which is accessed through a string, which starts normally with asterisk (*) and ends with a hash (#). It is implemented as an interactive menu driven service or command service. It has a shorter turnaround time than SMS, and unlike SMS, it does not operate by store and forward which indicates that data are neither stored on the mobile phone nor on the application. USSD technology is considered cost effective, more user-friendly, faster in concluding transactions, and handset agnostic.”
The study added that some of the participants on the USSD ecosystem are financial institutions, mobile money operators, mobile network operators, value added services providers, and customers.
The USSD channel is one of the measures put in place by CBN to drive financial inclusion. The USSD channels of many banks have an interface that allows customers to open bank accounts. The CBN believes that collaborative efforts by non-finance entities and banks would be critical in building a robust financial system that has a wider reach and enables better integration across different payment gateways in a reliable and secure and convenient manner.
Technology and automation are some of the key innovations in 21st century banking. These two concepts are key measures put in place by banking institutions to promote convenience and ensure that virtual banking is possible. These innovative efforts have eliminated the logjam in banking transactions caused often times by the huge crowd in the banking halls.
Today, the banking processes have become seamless, and people carry out volume of transactions on their palms with their mobile phones. As a key player in the financial sector, First Bank Nigeria is playing its role in driving increased financial inclusion through online banking especially on its USSD channel using *894#. The bank recently revealed that over 9.5 million customers are active on the platform.
The platform is an easy to use, convenient, fast, user-friendly mobile banking channel through which various banking activities are carried-out on a mobile phone across all the operational GSM network services in the country – without the use of the internet.
Customers are able to enjoy a wide range of banking services on the bank’s *894# USSD channel. These services include; utility bill payment, data and call credit recharge and subscription for self and third-party individuals, balance enquiry, merchant payment. This is in clear demonstration of its acknowledged leadership in electronic banking.
The bank’s USSD banking service, launched in January 2015, is an easy to use, convenient, fast, user-friendly mobile banking channel through which various banking activities are carried out on a mobile phone across the four major GSM network operators in the country without the use of the internet.
Customers are able to enjoy a wide range of banking services using the bank’s *894# USSD banking. These services include; data and airtime top-up for self and third-party individuals, quick balance enquiry, fund transfers, BVN enquiry, BVN linkage, mini-statement, account number
enquiry, account opening, merchant payment and firstadvance loan service. The firstadvance loan service enables salary earners take a loan up to 50% of their monthly salary.
The Group Executive, e-Business and Retail Products, FirstBank, Chuma Ezirim, FirstBank said: “At FirstBank, we are excited about the impact our innovative solutions are making in the Nigerian payment landscape. Our *894# USSD banking has been a viable platform through which we take our banking services to the doorstep of our customers, right on the palm of their hands, without the limitation of an internet connection. We remain committed to creating various avenues to enable Nigerians carry out various financial activities conveniently, safely and securely anytime, anywhere in Nigeria.”
Cash Policy and COVID-19
During the lockdown in Lagos and Ogun States and Federal Capital Territory (FCT), stakeholders in the financial sector urged to the Central Bank of Nigeria (CBN) to ensure that people make increased use of online banking to reduce the physical currency exchange in bid to contain the spread of the coronavirus.
One of such stakeholders is the President, the Consumer Awareness and Financial Enlightenment Initiative (CAFEi), Mrs. Debola Osibogun, who called on the Central Bank of Nigeria (CBN) to mop-up dirty notes in circulation to avoid further spread of the Coronavirus through currency exchange as the country battles to curb the spread of Coronavirus (COVID-19).
She said the recent reports indicate that the Coronavirus can survive on surfaces for as long as 72 hours leading experts to believe it can be transmitted through currency exchange, “this belief has prompted organisations in other countries including China to begin disinfecting cash with ultraviolet heat treatment.”
Osibogun, in the statement further noted that given the high rate of physical currency transactions in the country, there is has a higher vulnerability for spread of the virus through currency exchange.
According to the CAFEi President, “This move should be bundled with the aggressive promotion of the cashless policy of the Apex Bank consistent with its policy of financial inclusion. This two-pronged approach will ensure the spread of the virus is minimized in our day-to-day financial transactions and the use of alternative channels becomes an integral part of our existence. While government is emphasizing good hygiene and social distancing, it is important they also create more awareness about the need for people to disinfect their hands immediately after touching cash, cards, POS Machines and ATMs.
“Considering that Nigeria is a predominantly cash based economy this is something that needs to be taken very seriously by the government. The Chinese in suspecting the spread of COVID-19 by banknotes have began sterilising banknotes from COVID-19 prone areas with ultraviolet heat treatment. Given the volume of cash transactions in Nigeria one can only conclude that the country runs a greater risk of the virus spreading via banknotes if the infection rate in the country is not curbed. The CBN should pay attention to the banknotes in the days ahead if we are to win the battle against the COVID-19 virus.
“As at the April, 10 the number of cases reported by the Nigerian Centre for Disease Control (NCDC) stated that the country has recorded 310 cases majority of them in Lagos state. If this situation escalates further the CBN might want to refresh banknotes and do a more aggressive promotion of its cashless policy. The current situation presents a perfect opportunity for the CBN to get a further buy in from the populace into its cashless policy thereby increasing financial inclusion. Payment modes that limit direct contact with physical cash (online banking and mobile banking) should be promoted more aggressively during this period.”
CBN and USSD
In November, 2019, the CBN has disclosed that it is in talks with telecommunications companies (telcos) and the Nigerian Communication Commission (NCC) for new Unstructured Supplementary Service Data (USSD) charges.
The disclosure was made by Samuel Okojere, CBN’s Director of Payment System Management while speaking at the 2019 Mobile Money Conference organised by the Association of Licensed Mobile Payment Operators (ALMPO).
Okojere, who was represented by Aisha Isa-Olatinwo, Assistant Director Payment System Department, CBN, while speaking on the role of regulators in accelerating mobile money adoption in Nigeria said, engagement with the NCC is still ongoing to find a new conducive pricing regime for USSD services in the Industry. Notwithstanding the progress made in Mobile Money adoption we have a lot of ground to cover up in Nigeria as a whole. The last survey by EfiNa showed that the level of exclusion is still far from the national target. Our challenge is more pronounced in the part of the country with insurgency and other skirmishes. Furthermore, it is necessary that we improve the agent’s footprints across the country to bring the services closer to the excluded. This represents the opportunity for mobile money operators to make their operations counts in a quest to have a highly inclusive financial system in Nigeria.”