Fintech booms as naira crisis expands banks' digital platforms

The naira crisis and the inability of banks to rise to the occasion has prompted customers to adopt mobile money platforms. Funmi FABUNMI writes about how this has resulted in a booming business for fintech

The overhaul of naira banknotes has caused a crisis that has made day-to-day operations difficult for many people and organizations. Due to a cash crunch in February, the Nigerian economy nearly collapsed, leading to protests across the country. As a result, the government has reintroduced the old N200 banknotes into circulation, extending the deadline for their abolition by 60 days until April 10.

The scarcity of liquidity that has characterized the naira overhaul has caused conventional banks to grapple with concurrent pressure from Nigerians migrating to mobile and digital banking, which has stretched their platforms. forms.

Banks have been forced to close their doors to customers due to angry customers protesting their inability to withdraw cash. With ATMs disabled and over-the-counter transactions non-existent, banks' digital platforms have been overwhelmed. Many bank customers have been blocked because they were unable to complete their transactions.

Digital banking became increasingly erratic, and transfers that were typically completed in minutes took days to deliver. For example, Convexity Founder and COO Adedeji Owonibi told The PUNCH about a payment he made through a digital banking platform that was not delivered after about a week.

Guaranty Trust Bank customer, who gave her name only as Bolanle, lamented about the bad network and how it affected her.

"My banking app hasn't opened since last Friday. Thank goodness I have customers who trust me enough to give me items on credit. Otherwise, I don't know what I would have done."

In response to the increase in failed transactions on their platforms, many banks have dispatched more staff to customer services to address customer complaints.

Banks were already in trouble before the naira crisis. Many of them have lost their best staff members to the "japa" (local slang for migration) syndrome. The naira crisis has brought to the fore the lack of IT-skilled labor in the banking sector. Many of them have migrated to developed economies.

The bank is ready to bring in an expatriate at all costs because the situation is embarrassing and the board of directors is getting impatient, said a source close to a human resources consultant. But few people are so excited about Nigeria right now for obvious reasons. The most reasonable is to see how they can poach bright guys to stabilize the system and consider young talent that could be nurtured over time."

According to the Vice President of the Nigerian Association of Small Scale Processors, Seun Kuti-George, "While migration to online payment is possible, limitations due to service issues are an issue. of great concern. What aggravates the situation are the technical problems that accompany the new means of payment that is the transfer.

"For example, I made a payment to someone in the morning and so far the person has not received the alert. So I had to leave the goods there until tomorrow morning hoping the guy would be alerted by then If it's an emergency or a life and death matter or a contract matter that will be voided , I would have lost that. But all that will also go away with time."

Additionally, a United Bank for Africa source, who spoke on condition of anonymity as he is not authorized to speak on the matter, blamed the problems of network to the huge online payment traffic. He said, "Online traffic is causing service issues."

Similarly, an Access Bank official, who spoke on condition of anonymity, told The PUNCH that while problems are occurring on the network, he added that "however, if it persists for more than a day, then you may need to go to the bank for assistance. I mean, when a banking app does not open sometimes, it may be a problem from your network service provider. But when such situations persist, it can be a major problem that only a visit to the bank can solve."

The President of the Banking Customers Association of Nigeria, Dr Uju Ogunbunka, told The PUNCH: "You know that banks do not provide services network. From what we found out, there was a breakdown in the network system. And there was so much pressure. Everyone was coming to the bank to do one thing or the other, whether it whether necessary or not. Because people were trying to meet the redesigned deadline for naira banknotes, the pressure became too much. Unfortunately, some of these systems are still under construction. They are not as strong. And you are not. ..