Overcoming challenges of alternative banking channels

Banking in Nigeria is more than 100 years old. It has migrated from the era of ‘tally number’ to branchless banking. The latter has birthed ATM, PoS, mPoS, mobile, and Internet banking etc. However, when ATM arrived, one would have thought there was nothing more to add.

However, the branchless banking is positioned as distribution strategies to deliver banking services to customers so that they no longer visit the banking halls. So why do we still encounter congested banking halls? Before we answer the question, let us uncover reasons the banks roll out alternative channels.

The branchless banking strategy is designed to pull bank customers out of the banking halls. For the banks, it will reduce costs, create convenience for customers, increase adoption rate, ensure higher speed of transactions, increase streams of revenue, and enhance banks’ profitability. Research has shown that these channels have a direct effect on the banks’ profits.

That is why the banks embraced 24/7 services so that customers would enjoy the superior sense of independence this creates. However, the reality is that the banks are in a race to diminish costs. Besides, the latest technologies have revolutionised global banking industry, just as extensive change in the rules governing the application of these technologies.

Therefore, the banks have shifted from brick and mortar service to direct sales and marketing through these channels; Email, phone, mobile applications, internet, and other electronic transactions. To the banks’ broad understanding, this extension generates value; first for the banks, and then for the customers, in that order.

In addition, the banks are following customers’ digital lifestyle, and this technological insurrection channels have brought to residences and offices the momentous demographic shift. Top on the list is “account accessibility.” The customers want instant access to funds transfer, bill payment, and account status. Now, when the customers move, the banks follow, even as  the banks always follow the cash.

Therefore, to drive superior differentiation, some banks have deepened these channels, as shown by GTB, Wema, Access Bank, Diamond, First Bank etc. Yet, the customers are still waiting in the banking halls. As a decongestion strategy, Unstructured Supplementary Service Data [USSD], a global system for mobile [GSM] communication technology was deployed. GTBank’s 737 code rides on this technology. A bank executive said UBA would market similar code.

With five banking applications from five banks, I was forced to delete U-mobile app. It has failed several UBA customers and me. This bank should address this concern. Meanwhile, other banks need to woo customers, and ensure the customers understand how to navigate the mobile apps. Until this is done, banking halls, especially GTB, UBA, First Bank, Diamond, and Wema banks would remain congested.

However, to overcome these challenges, the banks should fund customer education on a large scale, using all touch points. Educating bank customers is paramount as the Central Bank of Nigeria [CBN] and management of banks look forward to the next 100 years.