As part of efforts to embrace digital banking, Standard Chartered Plc is closing about half its Nigerian branches.
A report by Bloomberg reveals that the London-listed lender’s local unit has already started to shut some offices in December and will eventually operate only 13 branches in the West African nation.
Sources familiar with the development noted that the bank is under pressure from mobile money providers and is strengthening mobile banking and recruiting agents to reach new customers and handle cash deposits and withdrawals across Africa’s biggest economy.
Since its establishment in Nigeria in 1999, Standard Chartered has focused on corporate banking. However, the bank is now gearing towards expanding its retail base. In 2019, it outlined a target to grow the number of its customers fivefold from 100,000 in about two years by using digital technology to onboard clients faster.
The lender also plans to start digital lending to process small loans quicker and increase the volume of retail credit, according to the people.
Notably, Standard Chartered is not the only finance industry leveraging on the digital banking platform. The bank’s shift mirrors the boom recorded in financial technology via the innovation of mobile money.
As a matter of fact, some major banks in Nigeria are also leveraging on fintech. Instead of opening more physical branches, some of these banks are minimizing costs by building networks of authorized agents, or people within communities to sell their products and services.
Recall that recently, some mobile communication networks were granted operating licenses by the Central Bank of Nigeria (CBN). MTN Nigeria and Airtel Africa received the Approval-in-Principle (AIP) as Payment Service Bank (PSB) in November, 2021.
This is the first step in the process towards a final approval, subject to the fulfilment of certain conditions as stipulated by the CBN.
The PSB license allows the companies to among other things, maintain savings accounts and accept deposits from individuals and small businesses, which is covered by the deposit insurance scheme; carry out payments and remittance (including cross-border personal remittance) services through various channels within Nigeria; issue debit and prepaid cards and operate an electronic purse or wallet.
With a population of over 200 million people, of which more than a third have no access to financial services, Nigeria has seen an explosion in demand for payment solutions and lending outside traditional banking as businesses build on the rapid spread of mobile phones. Financial-technology companies have also benefited as customers sought to reduce physical contact during the pandemic.