At a conference in Lagos, speakers from Access Bank Holdings and OPay contended that the ideal bank is the one whose customers hardly notice it
Speaking at the Moonshot by TechCabal conference, an executive from Access Holdings and another from OPay said in Lagos that Nigerian banks can stay relevant only by anticipating customer needs and building their products into the routine ways people buy things and make payments. For digital banking Nigeria, that means institutions delivering services just when people require them, which matters most to the banks that still wait for customers to come to them.
Fintech Foundry at Access Holdings is led by Daniel Awe, who said the next phase of banking will involve institutions delivering services just when people require them, rather than waiting for customers to walk into a branch or launch an app first.
Speaking on a panel called "The Next Bank: Competing in the Age of Programmable Money", he put it this way: "The future of banks is going to be in everyday people, where banks become invisible."
Meeting people where they already are in digital banking Nigeria
This thinking extends the earlier move away from branches to mobile services. Placing a transaction on a handset changes how customers get to a bank, while embedding finance into chores like settling school fees or restocking goods changes the moment at which the two meet.
“When the customer is engaging you, it’s not the future of banking. It’s the banks that now have to place themselves in the life of the customer,” Awe said.
Chukwudinma Okafor, OPay Nigeria's head of compliance and its chief compliance officer, said companies should take real customer needs as their starting point, rather than whatever new technology happens to make possible.
“For us at OPay, the major focus is just to address one thing, and that’s customers. You have to meet the customers where they require you,” he said.
Lessons OPay took from market traders
According to Okafor, OPay sent its developers, technical personnel and sales staff to markets across the country, where they watched traders going about their business and gathered their opinions.
He cited one case showing how small tweaks can improve the usefulness of a product. Traders wanted point-of-sale terminals to play distinct tones, so a transaction that went through could be told apart from one that did not.
That example highlighted a gap central to the conversation. Anticipating what customers want may depend on sophisticated systems behind the scenes, but the improvement users value most can be strikingly simple. In digital banking Nigeria, the finest details can count for the most.
Banks must upgrade the systems beneath their products
Awe added that legacy lenders must also overhaul the systems that sit beneath their offerings, since conventional core banking platforms alone cannot match what financial technology startups and tech firms offering financial services deliver.
According to him, the transition has to be gradual, with systems staying reliable and compliant with regulation, while the risks of ever more interconnected systems are kept under control.
"Security has to sit at the centre of anything you hope to accomplish," he said.
Okafor observed that companies built for digital from their first day had gained from beginning on modern infrastructure, cloud-based systems among them. He said that banks with longer histories were taking up comparable technologies at an increasing pace.
Why banks and fintechs still need one another
Although both camps are competing for the same customers, the two speakers argued that established lenders and financial technology firms remain reliant on each other. Neither can operate entirely alone, and this mutual reliance does as much to mould digital banking Nigeria as any newly launched product.
According to Awe, tie-ups bring together the financial strength of banks and the ability of fintechs to cater to particular customer segments. He noted that certain businesses needed solutions which a firm like OPay was in a stronger position to offer.
Okafor emphasised that fintechs lean on conventional lenders in two areas:
- the settlement of transactions;
- the protection of customers' money.
He went on to say that the two sides also have to cooperate in combating fraud whenever funds pass from one institution to another.
"Ultimately, we need each other for the ecosystem to work well," he said.
Regulators, crypto and stablecoins
Awe explained that Nigeria's regulators do not share the same priorities when it comes to crypto assets and stable coins, an issue that was also raised in the course of the discussion.
As he told it, the Securities and Exchange Commission is the keener of the two on crypto-related activity, whereas the Central Bank of Nigeria has adopted a more cautious position, motivated by worries over how money is managed nationally and the safeguarding of consumers.
Awe said the Central Bank is looking at possible uses of stable coins within a supervised testing environment, a framework in which approved participants trial products under monitoring.
He characterised stable coins as showing fewer price swings than other digital currencies. That is his reading of why the regulator is interested; stablecoins can still lose their value.
The panel's closing point was that banks weighing up new technologies have a broader job: to widen ease of access to their offerings while preserving the safety and reliability customers expect. Disappearing from sight during a transaction, it observed, would take enormous effort on the underlying infrastructure, and that effort will determine the winners in digital banking Nigeria.
