Digital Banking in Nigeria and its prospects

Over twenty years ago, no one imagined the inception of digital banking or the possibility of paying bills, sending money to someone living far away, and processing other transactions with ease within a few seconds without having to go to a physical bank. But here we are today, almost embracing digital banking completely, with recent sophisticated innovations erasing traditional banking systems.

The arrival of digital banking has, undoubtedly, changed the modus operandi of the banking system in the country. Although it is still unfolding and more improvements are underway, Nigeria has seen the potentials therein, with traditional banks now switching to digital banking methods.

What is Digital Banking?

Simply put, digital banking is an innovative development geared toward improving the conventional banking system, which involves the digitization of traditional banking services. In other words, it simplifies regular banking activities like withdrawals, transfers, deposits, loan applications, and management via the internet without the need for a physical bank. It also guarantees easy access – putting a bank into your hands, anywhere and at any time.

Online Banking and Digital Banking

Digital banking and online banking are very synonymous and can be used interchangeably. But there is a difference between these banking systems. Although online banking allows one to perform numerous transactions without having to visit a bank, it doesn’t eliminate the need for a physical bank. It only complements the services of traditional banks because transactions that involve large sums of money will still prompt customers to visit a physical branch of the bank.

On the other hand, digital banking involves both online services and other services that don’t need a physical banking structure. A digital bank is simply an invisible but active bank that doesn’t require physical walls to operate.

The need to adopt digital banking

As the world is rapidly evolving, the creation digital banks is only one of many significant changes in the financial sector. And while we clamor for DeFi, this is only a step to easing the inconveniences and discomfort associated with visiting a physical bank to process basic transactions.

With digital banking, you don’t have to experience harsh situations, as it offers convenience for both banks and their customers. Another reason to adopt digital banking is to curb the expenses that come with maintaining physical banking infrastructures.

Many people in rural areas do not have the luxury of a physical bank branch. Hence, they are excluded from the benefits of the financial system. Sometimes, these physical bank branches do not come in reasonable proximity to people within the community, as many have to travel several miles to perform basic transactions.

But digital banking offers a means to minimize the operating cost of banks, hasten transaction time, improve customer experience, and eliminate the need for a physical bank branch.

Advantages

• It is not affected by official closing hours or public holidays, which is evident in the case of traditional banking.
• It also eliminates the need for paper forms of transactions, as this is substituted with electronic transactions.
• Customers do not need to spend much on transport to access banking services.
• It is convenient and time-saving.

Popular digital banks in Nigeria

In no particular order, here are some of the most popular digital banks in Nigeria.

• Kuda bank
• Sparkle
• ALAT, by Wema Bank
• Standard Chartered Bank
• Rubies
• VBank
• Gomoney
• Mint

Conclusion

What we have seen so far with the rise of many digital banks is just the tip of the iceberg of what is to come a few years from now because technology will keep advancing. There will be further improvements such as user-friendly interfaces and additional banking services, which will be readily available for both young and old. All you have to do to enjoy these services is to download any of the digital banks mentioned above from your Playstore.

We will also love to know what you think about digital banks and your experience with any of the banking apps above via the comment section.