A recent report by KPMG, titled “In Pursuit Value,” has shed light on the changing banking trends in Nigeria, revealing a substantial drop in weekly ATM usage among customers, which declined from 70 per cent in previous years to 40 per cent in 2023....CONTINUE READING THE FULL ARTICLE>>>
The survey, conducted among Nigerian and Ghanaian bank customers, highlighted the reasons behind this decline, which was attributed to the frequent unavailability of cash at ATM stations nationwide.
The study noted that this decline coincided with a surge in agency banking usage, with six in ten customers preferring to visit bank agents regularly.
According to the report, the shift towards agency banking underscores the persistent demand for readily available cash options, emphasizing customers’ reliance on bank agents nationwide.
In contrast, the medium digital transactions witnessed a notable drop in rankings, falling from a prominent position to outside the top ten in the survey. However, the report revealed a significant 52 per cent rise in digital payments between January and October 2023, based on data from the Nigeria Inter-Bank Settlement System (NIBSS).
This surge in digital payments was primarily triggered by the cash shortage resulting from the Central Bank of Nigeria’s naira redesign policy in the first quarter of 2023.
The initiative aimed to regulate cash circulation and reduce dependence on physical currency, prompting a considerable increase in NIBSS Instant Payment (NIP) transactions.
However, the sudden surge in digital transactions posed challenges for Tier-1 banks, leading to multiple transaction failures. However, fintech companies such as Opay, PalmPay, and Moniepoint rose to the challenge and capitalized on this opportunity, resulting in a significant shift in customer preferences.
The survey indicated that 58 per cent of respondents either switched banks or considered moving to fintech platforms during this period.
This demonstrates a substantial shift from the 15 per cent who switched banks in 2022.
Additionally, there was a notable increase, from four per cent in 2022 to 13 per cent in 2023, of retail banking respondents relying on fintech platforms for their primary banking needs.
Overall, the KPMG report portrays a changing landscape in Nigeria’s banking sector, with a declining reliance on traditional ATM services and a rapid embrace of digital payments and fintech solutions among consumers…CONTINUE READING>>
