FirstBank’s Alternative Channels drives E-payment Growth

Since the Central Bank of Nigeria (CBN) introduced the cashless policy several years ago to, among others, encourage the Nigerian banking public to switch to alternative means or channels in place of cash transactions, banks in Nigeria have witnessed steady growth in the use of their automated platforms – online, mobile and ATM.

When hurricane coronavirus, so to speak, made landfall on Nigerian soil and forced government to impose lockdowns as part of measures to curtail its spread, banks experienced an unprecedented surge in customer activity on their automated channels.

People like Sunny (real name changed to protect his identity) ensured that the banks’ automated channels more than made up for whatever shortfall was occasioned by the lack, or restriction, of in-branch, in-person transactions due to the lockdowns.

He recalls often boasting before the COVID-19 era: “I don’t do mobile or online banking. I can’t trust those channels. I must visit the branch because I want to physically see the processes involved in fulfilling my banking requests.” Now ask Sunny the last time he entered a bank branch to do any transactions. Not just that he cannot remember, he actually has no plans to visit any bank branch anytime soon even without lockdowns or the tight restrictions in place anymore. He says he has moved on permanently. Yes, the diehard bricks-and-mortar bank customer has become an unrepentant convert to digital banking.

Sunny is not alone. Available data suggests that many more people have been making the switch to alternative banking channels since COVID-19 disrupted life as we knew it and became a more or less permanent feature of our everyday living. Take, for example, the number of people who turned to Firstmonie Agents, the agency banking platform FirstBank set up to champion its financial inclusion drive and accelerate the extension of financial services to the unbanked, especially in the hinterland.

Similarly, Firstmonie wallet, the electronic friendly wallet by Nigeria’s premier banking platform, witnessed a massive 63-fold increase in the number of new wallets created in 2020 when compared with its 2019 figure. Each of these new wallets represents a new user seeking to carryout basic banking transactions, such as sending or receiving money, paying for services like electricity, cable subscription and airtime and making deposits via the Firstmonie platform.

A similar trend, even if not as spectacular, was witnessed in FirstBank’s other alternative channels. Its WhatsApp channel (chat banking) which has been programmed to enable customers resolve a variety of issues by following specific prompts without the need for any of the bank’s customer service personnel to intervene, saw a 35 percent increase in new users in 2020.

These new users would probably have preferred an in-branch face-to-face meeting with a customer service personnel. But what chat banking (via +234 812 444 4000) offers to the customer is a more convenient, “queue-less” and inexpensive alternative resolution mechanism that could even be more effective depending on the issue the customer wants resolved.

All the new users of online banking (FirstOnline) in 2020 would have been pleasantly surprised that they could carry out so many more banking transactions from the comfort of their home or office using their laptop or other device and wondered why they had to wait for a pandemic to make such a good choice for them. Each new user was part of the 28 per cent increase in enrolment the service experienced in 2020.

USSD banking (via *894# direct short code requiring no Internet) saw a 22 per cent growth rate, while mobile banking (FirstMobile) was boosted by a 17 per cent increase in new users in 2020. The new customers on both service platforms are now getting a taste of the world of convenient banking via mobile phone that millions of existing users on the platforms are already taking for granted.

While COVID-19, undoubtedly, has played a role in accelerating the switch to alternative banking channels, the importance of growing trust in the channels by customers as determinant of which bank and which alternative channels they used, should not be discounted. Sunny (remember him, our new convert to digital banking channels) underlined this point when he remarked, “I am getting more comfortable with digital banking. I think our banks are making more and more investments in the technology that powers digital banking in order to build our trust in alternative banking channels.”