‘ATMs Still Relevant to Bank Customers despite COVID-19’

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Automated Teller Machine

By Emma Okonji

Financial experts have stressed the relevance of massive deployment of Automated Teller Machines (ATMs) across the country in order to achieve Nigeria’s financial inclusion goals and strategies.

The experts stated this at a recent webinar organised by FINTECH1000+, with the theme: “What Future for ATMs in Nigeria – Death or Resurgence”,

They decried the paucity of ATMs deployment across the country, which they put at 22,800, a figure that is about 70,000 less than the targeted over 90,000 ATMs deployment by 2020, and called on the Central Bank of Nigeria (CBN) to implement policies that would enhance faster deployment of ATMs across the country.

Nigeria had in 2011, made a commitment to develop and pursue a financial inclusion strategy that would reduce the adult financial inclusion rate from 46.3 per cent in 2010 to 20 per cent by 2020, but the experts were of the view that insufficient ATMs deployment could hamper Nigeria’s financial inclusion goals and strategies.

Speaking on the dearth of ATMs in Nigeria, the Executive Director, Infrastructure and Business Division at Inlaks, Mr. Tope Dare, said most countries like South Africa, Brazil and India, have more ATM deployments than Nigeria.
According to him, “Worldwide outlook for ATMs remains positive and expected to grow though at muted rates over the next seven to ten years when ATMs are expected to serve as bank branches of the future as banks step up branch closures. Cash remains crucial to the lives of consumers, so the deployment of more ATMs remain the most convenient and reliable channel to offer this essential service to consumers.

“With three times population of South Africa, Nigeria has four times fewer ATMs per 100,000 adults. With similar population to Brazil, Nigeria has 10 times fewer ATMs per 100,000 adults.”

Dare said the revised ATM Policy recently put in place by Reserve Bank of India to attract the requisite investment for the growth and sustenance of the ATM channel, would offer a ready template for Nigeria on the benefits of stakeholder collaboration in sustainable policy making.

He further explained that the total number of ATMs deployed by five top banks in South Africa is about 33,156 , while in Nigeria the total number of ATMs deployed by five top banks is about 13,491, yet Nigerian population is far more than that of South African population.

The Deputy CEO, Payments Processing at Interswitch, Mr. Akeem Lawal, in his presentation, attributed the huge unprecedented crowding being experienced by consumers across ATMs locations in Nigeria, to lack of sufficient ATMs in the country. He therefore, called on the Central Bank of Nigeria to address the situation in the interest of consumers.

He said although the initial ATMs deployment in Nigeria suffered failed adoption/usage during its first 10 years of deployment from 1993 – 2003, he, however, said the number of ATMs deployed over the past 15 years, from 2005 – 2020, has grown significantly at an average of 38 per cent year on year growth rate to about 22,000 in 2020, whilst bank branches have declined due to mergers and branch rationalisations.

Group Head, Digital Banking, Sterling Bank Plc, Mr. Dipo Alabede, said ATM transaction channel would continue to rank as consumers’ best channel of choice, generating over N839 billion in transaction volume.

In a communique issued at the end of the webinar, the financial experts were of the view that CBN and commercial banks should realign all policy action towards meeting the needs of the under-served Nigerians who are evidently being subjected to the most harrowing experience across the grossly inadequate ATMs locations across the country.
They called for rapid expansion in ATM deployment across Nigeria and advised that government should provide incentives for ATMs deployment in remote, semi-urban and rural areas.