- Powering Banking With Technology
Technology is redefining and simplifying banking. It has also brought banking to the doorsteps of almost every household. For instance, the opening and operating of accounts can now be done without visiting a bank or physically interacting with human beings and from the comfort of one’s office, bedroom or even while in transit. Technology has practically revolutionised banking and every individual now has the capacity to have their banks with them everywhere and in their pockets.
The Head, Information Technology, Wema Bank Plc, Adewale Saka, disclosed that banks are now empowered to reach customers and potential customers even in areas where they do not have physical presence. He explained that the ease of creating banking products and services as well as making them available to customers is quite amazing, and this is made possible through technology.
“Bank customers now have access to almost all banking services 24/7, including access to cash at odd hours through the Automated Teller Machines (ATMs), airtime recharge, bills payments, funds transfer, service subscriptions, online and offline shopping, lifestyle management and a host of others. Banks in Nigeria have leveraged technology to reposition banking in the minds of their customers.
“All these have been achieved through technology-powered delivery channels such as mobile banking apps, online banking platforms, robust payment and collection platforms, among others. In my own view, most banks have become technology service providers,”he said.
He believes that banks have effectively harnessed technology to improve banking services even though there is still room for improvement. ”Everything in banking today is powered by technology to the extent that when there is a technology failure in any bank, it can cripple the entire operations of such bank with attendant financial losses and negative brand perception. Banks in Nigeria have over the last few years embarked on automation of backend processes to drive efficiency, improve productivity, innovate effortlessly and optimise risks,” he added.
Saka said that Wema Bank is the bank to beat when it comes to innovation using technology. “As it stands today, Wema has made a bold statement with ALAT being the first truly digital bank in the country. What is also unique about this is the fact that our digital bank and all other digital channels provided for customers’ comfort are fully owned by Wema,” he said.
He explained that WemaMobile platform can be switched to SMS banking if you run out of data right from within the app. This is an amazing experience that is unique to Wema. “Card Control integration to all our service points (ALAT, USSD Banking, WemaMobile, WemaOnline, among others) and giving customers of the bank absolute control over when, where and how their debit and credit cards are used without recourse to the bank is the first of its kind in the Nigerian banking industry. We have also consistently provided very stable and reliable banking services through our digital channels,” he said.
Speaking further, he said banks have also developed and deployed innovative products and services for customer acquisition, risk management, transaction processing and ultimately improve the bottom-line. Cash-lite policy of the Central Bank of Nigeria (CBN) has been hinged on technology and so also is the Bank Verification Number (BVN) project.
“Unlike before, customers can get instant value for both intra-bank and inter-bank transfers without having to fill forms, join a long queue or visit a bank branch. Customers are now able to have value on cheques deposited in their accounts within 24 hours and in some cases, customers do not need to visit a branch to present their cheques for clearing, since all banks started participating in the automated clearing house using Cheque Truncation Systems,” Saka disclosed.
Significant successes have also been recorded around taking banking to the unbanked through the use of technology in driving Agency Banking processes. More and more in-branch banking services are getting digitised and made available to customers across multiple alternative channels to make customers less dependent on bank workers but rather serve themselves.
“However, improvement is still required around data analytics for determining specific needs of customers and various segments of the markets to develop products and services to meet those needs. Another area requiring more attention is eliminating the need for customers to come to the bank at all. Wema Bank is leading the rest of the industry in this area through the creation of our Digital Bank, ALAT. This is the next level of effective use of technology in Banking,” he said.
He admitted that technology has undoubtedly brought positive transformation to the Nigerian banking industry but surely it hasn’t been without a couple of challenges. In the days of pure traditional manual or semi-manual banking, operational downtime was minimal and most times limited to the specific business unit or branch while a downtime on a centralised Core Banking Application or infrastructure can bring the entire operations of a bank to a halt.
“Banking industry has been experiencing new types of risks associated with the use of technology for banking services. These risks could be due to human error, systems failure, fraud and cybercrimes. Banks in Nigeria have lost a lot of money to various fraudulent practices perpetrated through electronic channels. Fraud attempts, successful frauds, hacks and scams have steadily increased as banking takes centre-stage in the digital world,” he stated.
He warned that outsourcing or cloud computing or sharing a public infrastructure is less secured than on-premise deployment of infrastructure. “All that is required for an organisation is to go through a stringent process in selecting a cloud service provider and ensure a water-tight agreement is put in place to protect their businesses. The type of service to be hosted on a public cloud should be determined by the cloud strategy of various institutions and all conditions required to effectively protect information asset on-premise should be considered when outsourcing or migrating to the cloud,” he said.
Saka described technology as a great enabler, making banking more accessible and reducing costs for consumers. I don’t think bank branches are going away because people still need human contact.
“However, it is expected that banks will shift competition to the digital space and de-emphasise competing based on number or size of branches. Rate of branch expansion will go down paving way for channels and digital penetration. A lot more of digitally-powered unmanned service centres where customers can drive in and perform banking services (including seeking financial advice or solutions) on a self-service basis will take centre-stage. This has started already but it’s going to continue and increase in the coming years,” he said.
Continuing, he said: “More and more banking processes will get digitised and a lot more services currently handled within banking halls or head offices of banks will become available via digital platforms. Banks like ours (Wema) have invested in the bank of the future, ALAT and I believe that banks that fail to invest and take advantage of new technologies to reengineer their products and services may be losing customers to the better-quality or lower-cost products of smarter ones,” he stated.