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Fintech booms as naira crisis stretches banks’ digital platforms


The naira crisis and the failure of banks to rise to the occasion have prompted customers to embrace mobile money platforms. Funmi FABUNMI writes on how this has translated into a booming business for fintech

The redesign of the naira notes caused a crisis which has made daily operations difficult for many individuals and organisations. Due to a cash shortage in February, Nigeria’s economy almost collapsed, resulting in protests nationwide. As a result, the government reintroduced the old N200 notes into circulation, extending the deadline for their abolition by 60 days to April 10.

The scarcity of cash that has characterised the naira redesign has caused conventional banks to struggle with the attendant pressure that has come from Nigerians migrating to mobile and digital banking, causing their platforms to be stretched thin.

Banks were forced to close their doors to customers due to angry customers who were protesting their inability to withdraw money. With automated teller machines disabled and over-the-counter operations non-existent, banks’ digital platforms were overwhelmed. Many bank customers were stranded as they were unable to conclude their transactions.

Digital banking services became increasingly erratic, that transfers that were usually done in minutes were taking days to deliver. For instance, Founder and Chief Operating Officer at Convexity, Adedeji Owonibi, told The PUNCH about a payment he made through a digital banking platform which did not deliver after about a week.

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

“My bank app has not opened since last Friday. Thank God that I have customers who trust me enough to give me items on credit. If not I do not know what I would have done.”

In response to the increased failed transactions in their platforms, many banks have drafted more personnel to customer services to attend to customers’ complaints.

Banks were already having issues before the naira crisis. Many of them have been losing their best members of staff to ‘japa’ syndrome (local slang for migration). The naira crisis has brought to the forefront the lack of qualified IT manpower in the banking sector. Many of them have migrated to developed economies.

The bank is ready to bring in an expatriate at any cost because the situation is embarrassing, and the board is becoming impatient, a source close to a human resource consultant said. But not many people are so excited about Nigeria at the moment for obvious reasons. The most reasonable is to see how they can poach bright guys to stabilise the system and consider younger talents that could be trained overtime.”

According to the Vice President of the Nigerian Association of Small Scale Industrialists, Seun Kuti-George, “Although the migration to online payment is possible, limitations from service glitches are matters of huge concern. What is worsening the situation is the technical issues accompanying the new means of payment, which is transfer.

“For example, I made a payment to someone in the morning and up till now, the fellow has not received the alert. So, I had to leave the goods there until tomorrow morning hoping that the fellow would get alert by then. If it is an emergency or a matter of life and death or a matter of contract that will be cancelled, I would have lost that. But all these also will go away over time.”

Also, a source at the United Bank for Africa, who spoke on condition of anonymity as he is not authorised to speak on the issue, blamed the network glitches on enormous online payment traffic. He said, “Online traffic is causing service glitches.”

Similarly, an official at Access Bank, who spoke on condition of anonymity, told The PUNCH that although the glitches in the network occur, adding that “However, if it persists for more than one day, then you might need to visit the bank for help.” I mean when a banking app is not opening sometimes, it could be a problem from your network service provider. But when such situations persist, then it might be a major problem that only a visit to the bank can solve.”

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