Digital Banking In Nigeria: What You Need To Know

The banking business is witnessing enormous digital disruption, with internet deposits, smartphone apps, and e-bill payments becoming the standard. Consumer demand for digital banking services has resulted in various technological improvements within financial institutions, with artificial intelligence (AI) at the heart of these digital revolutions.

What Is Digital Banking?

Digital banking is the digitisation of all levels of banking, from the front to the back end. This means that digital banks rely on artificial intelligence to automate back-end activities such as administrative tasks and data processing, relieving strain on people to execute day-to-day tasks.

Users can not only make account deposits and transfers remotely, but they can also apply for loans and get specialised money management services. Users’ need for faster ways to access banking information and conduct financial transactions outside neighbourhood branches gave rise to “digital banking.”

Before progressing to a digital-only market, the migration of banking into the digital age started with a few essential online banking services.

Online banking refers to the most fundamental banking functions, such as bill payment and account transfers, and can be provided by both traditional financial institutions and tech-savvy entrepreneurs. Customers log in with appropriate credentials on a bank’s website to access these services and their financial accounts.

Mobile banking, which provides roughly the same services but from the convenience of a mobile device such as a tablet or smartphone, was inspired by online banking. Mobile banking refers to giving customers the option to carry out standard banking operations via mobile channels, and digital banking refers to all banking features that are digitally accessible over the internet.

Digital-only banks are created wholly electronically, but most traditional banks now provide online services. Digital-only banks are supported by digital platforms that appeal to the millennial and Gen Z populations rather than relying on the financial and customer support of an established physical location.

Nigeria is the leader in real-time and digital payments in Africa, according to a report. The country came in sixth place after India, China, Thailand, Brazil, and South Korea in the list of the most developed real-time payments markets in the world in 2021, with 3.7 billion real-time transactions. Nigeria’s economy generated an additional US$3.2 billion in 2021, or 0.67 percent of the country’s GDP, thanks to the widespread adoption of innovative digital and real-time payment systems.

Advantages Of Digital Banking In Nigeria

1. Ease Of Transaction

Digital banking provides all of the financial services you need to carry out numerous transactions without having to go to a physical bank or ATM for your urgent business.

You can save money instantly for these transactions by using digital banking, of course. In other words, you can accomplish different goals during this period. Some of the most significant digital transactions you can make are listed below:

• Bill payments

• Money withdrawal

• Transfer

• Loan facilities

• Savings

• Investment

The ability to conduct financial transactions anytime without leaving your home is one of the most significant advantages of digital banking because it saves you a ton of time that you can use for other companies.

It, therefore, results in completion speed, which is one of the crucial needs for conducting business with organisations and people more effectively. Additionally, being able to work in multiple trades at once saves time and effort.

One of the most incredible experiences and options for managing a company’s financial resources and carrying out its transactions swiftly and efficiently is to use digital banking. However, you can only do that by utilising current digital banking in any industry.

2. Provides Different Solutions

You may share your transactions both domestically and abroad thanks to digital banking. This is a little more practical than using paper bank documents in banks, whether the involvement is to submit accounting documents or pay bills.

As a result, in enterprises and sectors, electronic data and digital banking are replacing paper-based transactions. As a result, it helps the company give its consumers the necessary banking information more promptly and securely.

In addition to those above, each platform depends on a customer-facing application that provides a range of services and enables constant communication with the platform. Not to add that the consumer can ask for assistance with problems at any time and receive answers.

3. Lower Fees

The fact that digital banking applications offer lower banking fees than traditional banks is one of their most notable characteristics. However, each online platform has a different pricing structure, and some compete to offer customers a lower price.

As a result, it lowers the price and encourages clients to utilise it because they always want to save money. Customers do not incur high additional costs due to using standard banking services offered by banks to execute banking transactions.

It should be noted that digital banks typically offer reduced fees to clients to improve the customer experience and reduce the reliance on digital work in their industry.

4. Prompt Problem Resolution

Customers have better experiences using a platform that depends on its electronic applications being enabled and conveniently downloaded on mobile devices for conducting financial transactions. It also lessens the potential complications he might encounter.

Additionally, several platforms rely on their websites to interact with users, manage data, and mitigate any hazards that users may encounter. To offer the finest client experience through digital banking, electronic media also creates new features.

Disadvantages Of Digital Banking In Nigeria

1. Technology Disruption

A reliable internet connection is necessary for digital banking. Your ability to access your accounts can be impacted if your internet service is interrupted due to a power outage, server problems at your bank, or if you’re in a remote area. You may need to look for an alternative if you can’t access your accounts due to scheduled site maintenance.

2. Lack Of A Personal Relationship

An advantage over digital banking could come from a human connection with your bank. Having that relationship can be beneficial if you require a business loan, a new line of credit, a fee waiver, or to alter your present banking requirements.

You can create a business account that is customised to your particular needs with the use of in-person banking connections. To prevent long waits for your money, they can also add notes in your files concerning checks, cash deposits, and overseas transfers.

An ideal relationship would combine human contact with your banker for assistance with more significant issues with online banking for your daily activities. In this manner, you can help your business in various ways.

3. Security Concerns

Many contend that the likelihood of this happening is higher with digital banking, even if it can also occur in a physical bank. Hacking crime is on the rise, and there are hackers everywhere. Digital banking is more vulnerable to security risks because it uses the internet, where users can access consumer databases and information that could be used to access personal accounts and steal money. Because of this, a password is always necessary, and you shouldn’t divulge any sensitive information to anyone.

List Of Best Digital Banks In Nigeria

• Mintyn Bank

• Kuda

• Eyowo

• Rubies

• Sparkles

• ALAT

1. Mintyn Bank

Mintyn Bank is reputed as one of the best digital banks in Nigeria, with distinguishing innovations put in place to make the banking experience of its customer relish. Founded in 2020 under the license of Finex Microfinance Bank, Mintyn Bank stands out as the most sought-after digital bank when it comes to having all your financial needs settled at a go.

Some features of Mintyn Bank are:

Accessible account opening process: it is well known that opening an account with a traditional bank requires paperwork, but when you choose to join Mintyn Bank, you are relieved of this hassle. You can start using the app immediately after downloading it to your phone.

• Flexible savings options: the bank recognises that customers need to save money because it is a digital bank. Savings is, after all, one of the reasons people use banks. So it makes sense to offer appealing and adaptable saving choices. Your savings goal can be managed because the service allows users to make one-time or recurring savings.

• Bill payments: to ensure that you don’t have any tension, Mintyn Bank gives you a deluxe bill payment approach. You will note that the app’s interface is simple to use after downloading it. You won’t complain about anything or run into any problems. No matter what time of day you need to pay your payments, you can do it.

• Investment option: the digital bank offers you a range of investment options that best suits your needs within a specific duration. The investment duration is always between 10 to 12 span with a return on investment (ROI).

• Mintyn Marketplace: as a one-stop banking solution provider, Mintyn has designed a marketplace that allows users to shop for their groceries, especially food items, at affordable prices.

2. Kuda

Due to the numerous fees that banks charge their customers, Kuda was founded and took pleasure in being the bank of the free. It indicates that they want to reduce costs, particularly fees you incur when transferring money to or from other banks. If you use Kuda, you’ll note that there are no bills or additional charges, such as maintenance fees. Instead, if you make more than 25 transfers in a month, you will be charged NGN 10 per transaction.

You can save with Kuda and earn interest of 10% to 5%, just like any other bank. The absence of loan provisions in Kuda is one drawback of using it. Therefore, if banking with them is your goal, you will be let down. Interestingly, consumers prefer applications with dark modes. Thus, Kuda added this function to its program. As a result, many clients find it convenient.

3. Eyowo

Eyowo lets you make deposits using your phone number. People can save money with interest that ranges from 5% to 13% per year thanks to it. When compared to the rate you would receive from a bank that is not digital, it is a significant rate. These folks tend to concentrate on phone numbers rather than the internet, which they may or may not need. So, even folks with phones but no internet access can do business.

This is usually helpful for people who live in rural areas because many of them cannot afford the internet or frequently have problems using it. With Eyowo, you may send and receive money to and from anyone using their phone numbers. You can send money to their bank accounts in the same manner. It is also possible for you to obtain a loan from this bank.

4. Rubies

The slogan “The 21st Century Banking Experience” is used by Rubies Bank. They are always prepared to deliver, and they think they have a limitless supply of ideas for improving the banking industry. As they provide services to individuals, fintech companies, companies, and financial institutions, they are not constrained. Although it offers several advantages, the digital personal bank would be the main focus. Rubies Bank not only lets you save, but it also provides a way for you to create a personalised savings plan that you can follow.

Customers are given a card to make transactions more comfortable, and you can fund the account with money from any other bank account or a debit card. It guarantees that even if registering an account is simple, they are trustworthy and safe. They pledge not to leave anyone with any cause for regret. The Rubies Rules is a tool that enables you to customize particular automated instructions for your bank account.

5. Sparkle

This is the newest of all the digital banks in Nigeria, and it is actively battling its rivals. Sparkle provides a platform they want to be engaged in since they always want to be transparent. They make sure to send immediate notifications in the event of any transaction so you may efficiently manage your money. Additionally, it enables you to pay whatever bill you choose anytime you choose.

Sparkle also enables you to work more affordably with retailers. You can communicate with them directly through Sparkle, and the offers you receive will astound you. Additionally, they guarantee that using their bank won’t incur additional fees, and they’ll cover clients’ interbank costs until 2021.

6. ALAT

ALAT is the country’s first full-service digital bank. Wema Bank owns and operates this bank, which opened in 2017. Wema was the first institution in Nigeria to provide mobile banking in 2011, and a few years later, it revolutionised the sector with the first digital bank.

It only takes a few minutes to create an account. The bank requires your phone number, BVN, full name and address, and no further documentation.

Their savings account and Savings Goal feature offer a high-interest rate, around three times that of a typical bank. You can enrol in an automated savings plan that will earn you 10% annual interest.

ALAT also provides users with a free virtual dollar card upon opening an account.

Conclusion

Digital banking is an innovation that is already disrupting the banking industry in Nigeria, which, in turn, is changing the banking behaviour of customers. However, it is important to understand the features of the respective digital banks in Nigeria before you create an account with them.