The only way banks are ensuring that their customers continue to transact banking business in the current lock-down situation is the use of alternative banking channel. The Covid-19 situation has brought about increase use of electronics channels for banking transactions. With banks also increasing their drive for customer awareness and usage of these channels for banking transactions.
But focus on alternative banking channels did not just start with the Covid-19 lockdown situation. Nigerian Banks have been migrating their customers to electronics channels in Nigeria for over three decades. From when FirstBank pioneered the first Automatic Teller Machine (ATM) in Nigeria in 1991 to when GTBank popularize the Unstructured Supplementary Service Data (USSD) with its 737 codes and the very efficient Zenith Bank’s Internet Banking. Banking customers have come to embrace banking outside of the bricks and mortar.
ATM, Online Banking, Mobile Banking and Point of Sales (PoS) terminals are the four alternative banking channels for our review. While holding other channels like Cheques, NIBSS Instant Payment (NIP), Automatic Clearing House System (ACH), Mobile Cash and Central Pay out because their figures are either insignificant or they are payment modes that you need to visit the banks to effect.
Historical analysis of the use of 4 alternative banking channels reveal a trend that suggest some channels may be giving way to others as their use in terms of volume and value may be dwindling.
For instance, ATM maintains the highest volume of transactions of above 200 million use from Q4 2018 all through to Q4 2019 but has dropped in volume for both Year-on-Year (YonY) and Quarter-on-Quarter (QonQ) by 10 percent and 5 percent respectively. While on the other Hand, Mobile Banking grew from 33.8 million use in Q4 2018 to 159.4 million use in Q4 2019 with a growth of 371 percent YonY and 41 percent QonQ.
For PoS and Internet Banking, both channels grew by 45 percent and 66 percent YonY and 7 percent and 8 percent QonQ respectively. With volumes of 129.6 million and 28.8 million uses as at end of Q4 2019 from 89.1 million and 17.4 million use in Q4 2018 respectively.
In terms of Value of transaction, Both ATM and Internet Banking dropped YonY by 4 percent and 40 percent respectively, while PoS and Mobile grew by 35 percent and 129 percent YonY respectively. Mobile Banking Channel also maintained the highest QonQ growth with a growth of 18 percent over and above all other 3 channels. PoS, Internet Banking, and ATM volumes grew by 13 percent, 11 percent and 2 percent respectively.