How mobile banking apps are changing consumer behaviour

It was 6:00pm, 27-year old Bisi thinking she was already overstaying at the office, which closes at 5:00pm left in a hurry intent on riding home in a colleague’s car and forgot to withdraw some cash to meet her needs from a nearby Automated Teller Machine (ATM).

On the ride home, Bisi reckoned she needed to procure some groceries for the night but did not have the requisite cash on her. Upon walking into the grocery shop she realised the shop owner did not have a Point of Sale (POS) device to enable her use her debit card.

Surprisingly, the owner of the shop requested that she transfer the due amount through a mobile banking app if she had one and if she could transfer funds to other banks. Bisi’s heart gladdened.

There appears to be growing adoption and use of mobile banking applications (apps), meant to help drive a cashless policy and society. But, however this is being hampered by poor Information Communication Technology (ICT) infrastructure.

“Infrastructure will be electricity, because without electricity you do not have internet access. Infrastructure will be internet access. We do not have enough broadband penetration, which is less than six percent. This means very few people have internet access. So, both the availability and quality of internet access remain big challenges” said Niyi Yusuf, country Managing Director, Accenture Nigeria.

Interestingly, the adoption, use of mobile banking apps is spreading into the informal open market setting and in use in the most unlikely places.

“I was pleasantly shocked when I ran out of cash purchasing a few household items from a functionally illiterate ‘malam’ and he said I could transfer the balance to him if I had a mobile banking app” said Tolla Adeleye, a pub owner in Apapa.

Adeleye added “I was born in Nigeria but I lived the greater part of my life in the USA. I must say that mobile banking apps saved me one day. It happened that I boarded a taxi, upon getting to my destination realised I did not have enough cash on me for the fare. We visited 80 percent of the ATM points in Apapa and none dispensed cash.”

“Disappointed, the cab driver asked that we try using the mobile banking app, surprisingly, this sealed our transaction and I was able to pay off the fare.”

The story of mobile banking apps adoption is not as smooth as it seems because these apps from various banks have equally failed their possessors at points of need.

“The Nigerian market is just not ready because we do not have requisite infrastructure to make these mobile banking apps both efficient and effective. These mobile banking apps have disappointed me countless times” said Emmanuel Uko, programme co-ordinator at UK-Aid, Ilorin, Kwara state.

“For instance, on this faithful day, as early as 5:00am I needed to top-up my phone and make a very urgent call. I was sorely disappointed to realise that the app could not help me because it was out of service” Uko added.

Beyond infrastructure, the other issue is inclusion; of 183 million Nigerians less than 60 million have bank account which means 120 million are financially excluded. In other climes, kids have bank accounts; their parents open such accounts for them and put their pocket money there. This inculcates that habit of banking.

A bigger question is that of the 60 million how many have cards? Most payments are electronic, it is either you use your card or internet banking to effect the transaction or make the transfer or you use mobile payment platforms.

Here again there are less than 20 million mobile payment customers. There are less than 45 million cards issued out of 60 million bank customers and there are 183 million Nigerians who trade every day. Trading is just buying and this transaction could be done online.

A much more vexing issue revolves around cyber security. It is estimated that between 2000 and 2014, the cumulative figure that banks have lost to electronic fraud and cybercrimes stands at approximately N165 billion. This revelation creates several concerns around security as policy makers reiterate the drive for cash-less policy and e-commerce growth gathers momentum.

“There is a real opportunity for Nigeria to become leaders in cyber security in West Africa by implementing best practice from across the globe and applying international standards to develop internal cyber security capabilities” said Tom Griffin, Managing Director, Control Risks.

In technology as in life, every problem is an opportunity. There are solutions that technology companies are working on. Take security, one of the things some companies are working on is basic education. For instance, if you are leaving your home, you lock your door, you lock your windows and you put your keys in your pocket. If you do this for your physical room, then you should also do it for your virtual space. So, education is important.

STEPHEN ONYEKWELU